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The shares of Tech Mahindra Ltd saw a sudden drop of close to 2.04% during the opening session of the market on Wednesday, the 18th of February, due to poor market sentiment in the IT sector. The shares of Tech Mahindra Limited opened cautiously and faced selling pressure in the initial hours of trading. Concerns about demand in major markets, market volatility, global uncertainties, and investor profit-booking led to a decline in Tech Mahindra Limited’s share price.

Why Did Tech Mahindra’s Share Price Fall Today?

Here are several reasons behind the Tech Mahindra share price decline:

• Weak sentiment across the IT sector:

The entire Nifty IT index was falling, with all IT stocks, such as Tech Mahindra, also falling. This has created selling pressure on Tech Mahindra shares, as the entire IT sector is in a rush.

• Negative Global Market Signals:

The weak performance of global tech stocks in the market affects investor sentiment. The consistent change in the interest rate, the slowdown, which affects corporate expenditure and risk appetite. The negative market trend is affecting Indian IT stocks, including Tech Mahindra, leading to overselling.

• Ongoing AI Concerns

Despite discussions about the impact of artificial intelligence on IT services, some AI partnerships have been proposed. Investors are also cautious about the pace at which businesses will adopt AI, which could disrupt how IT services generate revenue.

• Profit Booking

The recent gains in tech stocks have helped investors book profits in IT stocks that rose in the last trading session.

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Business Fundamentals Remain Intact

Tech Mahindra Ltd is famous for its strong presence in global IT services, digital transformation and consulting. The company is famous for its:

• Strong and wide global clientele in the IT sector
• Growing demand for digital, cloud and AI
• Strong order book records
• Consistent revenue growth from long-term contracts
• Effectively managing cost and operational excellence for long-term profitability

The overall analyst sentiment for Tech Mahindra Limited is mixed, with some analysts positive about the company’s ability to build strong client relationships, its emphasis on digital transformation and AI-based projects, and its growth prospects. However, some analysts are also cautious about the company’s performance being affected by the global economic downturn and the current IT spending slowdown.

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Tech Mahindra Share Price Target

Infosys is trading at an average price of ₹1,772.67. The consensus estimate represents an upside of 29.49% from the last price of ₹1,369. According to Wall Street, the 5-day price target for Infosys is ₹1,490.90 with a low forecast of ₹1,280 and a high forecast of ₹1,678.

Tech Mahindra Share Price Momentum: Analyst Ratings

• The average 12-month Tech Mahindra share price target is around ₹2,554with a consensus rating of Hold (a mix of Buy, Hold, and Reduce recommendations).
• The analysts’ share price target range for Tech Mahindra is between ₹3,080, indicating moderate upside potential.
• Some brokerage firms are concerned about margin pressures, seasonal demand risks, and rising distribution costs, which is why several analysts are taking a cautious approach.
  

On the whole, analysts believe that Tech Mahindra Limited has long-term growth potential due to its leading positions in the cement and chemical markets, a diversified product portfolio, and global presence through its subsidiary, Novelis.

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What Should Investors Watch?

• To monitor quarterly results, revenue growth and margin tends to evaluate business performance.
• Tracking raw material and logistics costs management increases profitability.
• Assess Tech Mahindra competition & market position to maintain leadership and cyclical demand in the global marketplace
• Watch growth in digital, AI and cloud which supports long term growth potential.

Investor Takeaway

Despite today’s 2.28% decline in the Tech Mahindra share price, the drop seems more a result of market factors than of any negative news about the company. Investors can continue to monitor for stabilisation around key support levels before taking new positions. 

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