Tech Mahindra: Key Takeaways
- You can buy near ₹1,640 with a target of ₹1,810‑₹1,890 if the uptrend holds.
- Higher‑high/higher‑low pattern and EMA dominance suggest a strong weekly bias.
- AI‑related sector pressure creates a discount, offering a value‑oriented entry.
- Watch ₹1,525 as a break‑down warning; breach could flip the setup.
- Competitors Tata Consultancy, Infosys and Wipro are lagging on momentum, widening Tech Mahindra’s relative edge.
You missed the early wave; Tech Mahindra’s chart now screams a fresh upside.
Choice Broking’s Sumeet Bagadia just labeled Tech Mahindra the “Valentine Day Pick,” a signal that the stock’s technical backbone is still intact despite a broader IT sell‑off fueled by AI‑related fears. While the market watches a flat close at ₹1,535.25, the underlying weekly structure tells a different story: a clean series of higher highs and higher lows, EMAs stacked in bullish order, and an RSI comfortably above the 50‑level. In plain English, the stock is not merely holding its ground—it’s gearing up for a potential breakout that could reward disciplined investors.
Tech Mahindra’s Chart Signals: Higher Highs, Higher Lows
The weekly price action forms a textbook higher‑high, higher‑low pattern, a hallmark of sustained buying pressure. Each rally peaks above the previous, and each pullback settles above the prior low, confirming that the market’s perception of value is improving. Moreover, the stock sits above its 20‑, 50‑, 100‑ and 200‑week exponential moving averages (EMAs). When a security trades above all these EMAs, it signals that long‑term investors and algorithmic traders alike view the price as part of an overarching uptrend.
Technical jargon aside, think of the EMAs as a series of speed‑limit signs for the market: the further back the EMA, the slower the speed. Tech Mahindra is cruising well above the highest speed limit, a clear green light for momentum traders.
Tech Mahindra Within the IT Sector Pulse: AI Concerns vs Fundamentals
The Indian IT sector has been jittery as AI hype drives valuation spikes in global peers, prompting investors to rotate into pure‑play AI names and away from traditional service models. This rotation has penalized many Indian IT stocks, dragging the sector average down 3‑4% over the past month.
Tech Mahindra, however, has insulated itself by diversifying into digital services, cloud migration, and enterprise‑grade AI implementation for Fortune‑500 clients. Its revenue mix now reflects roughly 30% digital and cloud work, a figure that outpaces the sector average of 22%. The company’s earnings guidance for FY26 projects a 12‑13% YoY growth, comfortably above the consensus 9%.
In short, while the sector mood is bearish on paper, the fundamentals of Tech Mahindra are quietly strengthening, creating a classic “value in a bear market” scenario.
Tech Mahindra vs Competitors: Tata, Infosys, Wipro Outlook
When comparing relative momentum, Tech Mahindra’s 3‑month return of +5.5% eclipses Tata Consultancy Services (+2.8%), Infosys (+1.9%) and Wipro (+0.7%). The peer group’s higher‑frequency pullbacks have been deeper, with Tata’s 20‑week EMA recently breached, a sign of weakening trend.
Furthermore, Tech Mahindra’s order book contains a growing share of long‑term digital contracts, while Tata and Infosys are still heavily weighted toward legacy maintenance revenue. This structural advantage gives Tech Mahindra a higher “earnings sustainability” score, an important metric for long‑term investors.
Consequently, the relative valuation gap widens: Tech Mahindra trades at a forward P/E of 19× versus Tata’s 22×, suggesting a modest discount for a stock with stronger growth momentum.
Tech Mahindra Historical Cycle: Lessons from Past Rallies
Indian IT stocks have historically cycled every 18‑24 months between AI‑driven hype and fundamentals‑driven recovery. In early 2022, a similar AI‑concern wave knocked the sector 7% lower before a rebound led by digital services players. Those who entered during the dip captured an average 15% upside over the next six months.
Tech Mahindra experienced a comparable pattern after the 2020 pandemic surge: a sharp rally to its 52‑week high, a brief consolidation, then a breakout that delivered a 22% rally in the subsequent quarter. The current price action mirrors that historic consolidation phase, implying that the next leg could be equally rewarding if the technicals remain intact.
Tech Mahindra Technical Toolbox: EMAs, RSI, and Pullback Dynamics
Exponential Moving Averages (EMAs): The 20‑week EMA (≈₹1,590) acts as a short‑term support; the 50‑week EMA (≈₹1,560) is a mid‑term guard. Staying above both signals that short‑term sellers lack the power to reverse the trend.
Relative Strength Index (RSI): At 56.45 on the weekly chart, the RSI sits in the neutral‑to‑bullish corridor. Values above 70 would indicate overbought conditions; values below 30 signal oversold. The current level suggests room for upward movement without immediate exhaustion.
Pullback Mechanics: The recent dip of ~3% after a sharp rally is a classic “healthy retracement.” In technical lingo, a pullback that respects the 20‑week EMA and finds support near the 50‑week EMA is considered a “buy‑the‑dip” opportunity rather than a trend reversal.
Tech Mahindra Investor Playbook: Bull and Bear Cases
Bull Case: Enter around ₹1,640; add on dips to ₹1,610. Target range ₹1,810‑₹1,890 aligns with the next resistance cluster near the 52‑week high. The upside potential is roughly 10‑15% from today’s price, with the sector’s digital revenue tailwinds providing a solid earnings runway.
Bear Case: A breach below ₹1,525 would invalidate the higher‑low structure and trigger a stop‑loss cascade. In that scenario, the next support sits near the 200‑week EMA at ₹1,470, and downside risk extends to the 52‑week low of ₹1,210, implying a potential 20% loss.
Risk‑adjusted investors may consider a staggered entry: a core position at ₹1,640 and a smaller add‑on at ₹1,610, while setting a hard stop at ₹1,525. This approach balances upside upside with a clearly defined downside.