Tech Mahindra (NSE: TECHM) is an Indian multinational technology company, providing information technology (IT) and business process outsourcing (BPO) services. A subsidiary of the Mahindra Group, the company is headquartered in Pune and has its registered office in Mumbai. As of April 2020, Tech Mahindra is a $5.2 billion company with 125,236 employees across 90 countries. The company was ranked #5 among India's IT firms and overall #47 in Fortune India-500 list for 2019. Tech Mahindra has 973 active clients as of April 2020. In 2014, Tech Mahindra acquired Lightbridge Communications Corporation (LCC), the largest independent telecom services company in the world with a local presence in over 50 countries. In 2015, Tech Mahindra acquired SOFGEN Holdings, a 450-employee Swiss IT firm serving the financial services industry. Tech Mahindra purchased a controlling stake in Pininfarina SpA, an Italian brand in automotive and industrial design. Tech Mahindra announced the launch of its Automation Framework AQT (Automation, Quality, Time). By March 2016, Tech Mahindra's post-tax earnings had surged past that of M&M.
On the technical front, TECHM has higher highs and higher lows on the daily charts and is currently placed above the long-term EMAs in the daily frame. In the recent past, after clocking a low of Rs921 level, the stock has witnessed a bounce and rallied to the current levels. At the current juncture, the stock has formed a base at Rs921 level on the lower side and is all set to move higher. The overall chart structure of the counter looks bullish from current levels and is witnessing a bounce from the support zone around Rs942 level. This may trigger a fresh round of buying which may take the stock towards Rs1,075 plus level. The stock is currently performing in line with the broader markets indicating the inherent strength in the counter and is trading well above the major long-term support levels. On the Bollinger band (20,2), the stock price is trading above the mean with the upper band facing in the northward direction indicating the price likely to move higher. Analyzing the recent volume price action, the volumes have been encouraging in the recent up move indicating strong hands have started accumulating the stock at current levels. On the oscillator’s side, RSI (14) is trading in a comfortable zone of above 50 levels indicating the intact bullishness in the stock. We expect the counter to continue its outperformance in the coming trading days as well and may move towards Rs1,150 level in the medium-term. Any correction towards the recent support levels of Rs942 level may be utilized to average the positions.
Srinivas Krishnan Bobba, Deputy Manager (technical research analysis) Karvy Stockbroking Ltd