Shares of Tech Mahindra Ltd gained over 8% in Monday's trade after the company announced that Mohit Joshi, President of Infosys, would take over as the next chief executive officer and managing director from December 20.
The company in an exchange filing said that the appointment is consequent to CP Gurnani’s retirement on December 19.
Joshi has over two decades of experience in the enterprise technology software and consulting space. He has worked with the largest corporations in the world in driving digital transformation and building thriving businesses.
“Mohit’s appointment is the successful culmination of a rigorous selection process during which the NRC evaluated a number of internal and external candidates. Mohit’s experience with digital transformation, new technologies and large deals will complement Tech Mahindra’s strategies and continue to build on the strong growth momentum demonstrated by the company,” said TN Manoharan, chairperson of the Tech Mahindra NRC.
However, given his non-telecom background, Mohit Joshi's appointment obviously signals a change in strategy for the organisation, claimed brokerage Nuvama Research. The brokerage thinks the new chief executive officer will have a lot of work ahead of him to turn around the business.
"We expect the stock to underperform (relatively) over near to medium term. The company’s inexpensive valuation and high dividend yield limit the downside potential though. No changes to our estimates for the time being; maintain ‘hold’ with target price of ₹1,090," said the brokerage in its report.
On the technical front, analysts said that backed by news, the stock has seen strong gap-up opening. The overall view for the stock is positive with ₹1,200 as resistance and ₹1,080 - 1,100 as support.
The stock's weekly average delivery volume is 48.94%. The stock price has fallen 22.7% and underperformed its sector by 8.7% in the past year.
According to a MintGenie poll, 39 analysts on an average recommend 'buy' rating for the stock.
