Shares of Tech Mahindra Ltd jumped 4.34 per cent in Monday’s trade to hit a year-on-year high of Rs 1,761.30 on the back of strong earnings in the second quarter (Q2 FY25). The stock was last seen up 0.62 per cent at Rs 1,698.45. At this price, it has climbed 30.84 percent year to date (YTD).

The IT services company reported a 153.1% year-on-year rise in its consolidated net profit at Rs 1,250 crore. Its revenue grew 3.5 per cent year-on-year to Rs 13,313 crore. During the quarter, the company’s PAT margin stood at 9.4 percent, up 560 basis points year-on-year. The new contracts won by TCV amounted to $603 million.

TechM’s communications revenue fell 1.7 percent year-on-year, while BFSI recorded 4.5 percent year-on-year growth. Revenues in the technology, media and entertainment vertical grew 2.4 percent. Communications remained slow with a decline of 1.7 percent year-on-year.

The Mahindra Group company also declared an interim dividend of Rs 15 per equity share and set November 1 as the record date for determining shareholder eligibility.

Axis Securities has given a ‘buy’ call on TechM with a revised target price of Rs 1,850 per share from Rs 1,685 earlier. “Total Contract Value (TCV) remained strong in Q1FY25 at $603 million, driven primarily by large contract wins in the Communication and Enterprise segments. Management is confident in medium-term demand dynamics, supported by deals reached in previous quarters. , margin improvements are expected in the future,” he said.

“Margins have likely bottomed out and are expected to improve over the next two quarters. In terms of demand, some early signs of recovery are visible, indicating near-term recovery potential,” the brokerage said .

“We assign a P/E multiple of 26x to the company’s FY26E earnings of Rs 71/share, to arrive at a target price of Rs 1,850. Hence, we recommend a ‘buy’ on the stock,” also said Axis Securities.

From a long-term perspective, the brokerage said TechM appears to effectively address client-specific engagement issues across multiple verticals while maintaining a strong deal pipeline. “The company believes its new strategy will support a faster recovery, thereby strengthening confidence in near-term growth,” he added.