Looking at the chart, TECHM (CMP: 549) has immediate positional support of around 539 & sustain below that it may fall to 528-515 zone. Consecutive closing below 515, it may further fall to 497-485-467-452-423-410-390 zone in the extreme bear case scenerio.
On the upside, TECHM need to sustain above 565-578 zone for an immediate to short term target of 600-623. Consecutive closing above 623, it may target 648-670-681 in the medium term. In the long term, only sustain above 681, it may scale 704-748 zone in the bullish market scenerio.
Bottom Line: Technical Trading Levels
| SL</>5 | FROM SLR | |||||||||
| TECHM | CMP | 549 | ||||||||
| T1 | T2 | T3 | T4 | T5 | T6 | T7 | SLR | |||
| Strong > | 528 | 540* | 565 | 578* | 600 | 623 | 648 | 670-681 | <515 | |
| Weak < | 515 | 497* | 485 | 467* | 452 | 423 | 410 | 390 | >528 | |
Q4 result of TECHM (published on last Tuesday, after market hours) is way below market expectations & subsequently the stock hammered yesterday by around 15%, its biggest one day fall since Feb'2009. The poor earnings is caused mainly by cross currency headwinds, higher employee cost (salary hikes, Visa costs) & one of the key telecom client's tepid revenue along with under performance of some of its acquisitions such as LCC.
Q4 is indeed a difficult quarter for may IT services companies and TECHM is also proved to be a no exception. Market is expecting this type of difficult situation (Margin pressure) till next some quarters.
Looking ahead, performance of TECHM will largely depend on execution & margin recovery along with integration of various acquisitions. They are also looking for innovative "Start ups" in different locations (overseas) in order to identify early & nature for future profitable venture. Also worst of telecom sector may be behind , we may see some sequential growth in the revenue front in the coming days (nearly 50% of its revenue come from this telecom/communication sector). Slow down in advance economies including US/EU may also be at the last stage/already over. This, along with concept of "Digital India" may help all IT companies including TECHM in the days ahead. But, they have also to manage/hedge their cross currency positions (volatility) more efficiently.
Present median valuation of TECHM by BG metrics may be around 600 and projected valuation may be 655-720 (FY:16-17) under the current market conditions.
| SCRIP | EPS(TTM) | BV(Act) | P/E(AVG) | LONG TERM | SHORT TERM | MEDIAN VALUE | 200-DEMA | 10-DEMA |
| TECHM | 27.33 | 95.56 | 20.95 | 597.41 | 596.98 | 597.19 | 623.33 | 622.44 |
| TECHM | 32.8 | 124.25 | 20.95 | 654.47 | 654.00 | 654.23 | 623.33 | 622.44 |
| TECHM | 39.75 | 161.5 | 20.95 | 720.48 | 719.96 | 720.22 | 623.33 | 622.44 |
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