A roster of blue-chip clients and focus on Europe where growth prospects for telecom services are strong, make the company's stock a good investment option.
Investors can buy the Tech Mahindra stock with a two-year horizon considering the healthy growth prospects for its service offerings in Europe, its blue-chip clientele and status as an integrated telecom software player. The stock was marked down significantly during the recent meltdown in mid-tier IT stocks; investors can use this opportunity to buy.
The stock trades at 23 times its current year's earnings and is at a discount to other telecom software companies such as Sasken, as well as larger IT companies such as HCL Technologies and Wipro, making it a reasonable investment option.
Tech Mahindra broadly caters to three sets of clientele — telecom service providers (TSP), telecom equipment manufacturers (TEM) and independent software vendors (ISV). Its IT services offerings include application development and maintenance, system integration, product engineering, managed platforms and services, consulting, testing and BPO services, among others.
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