TECHM - Swing Trade Analysis with AI Signals

Last Updated Time : 20 Dec 25, 07:02 am

Swing Trade Rating: 3.7

📊 TECHM shows moderate potential for swing trading. The current price of ₹1,613 is above both the 50 DMA (₹1,509) and 200 DMA (₹1,516), confirming bullish momentum. However, RSI at 71.2 indicates overbought conditions, which could limit upside in the short term. The optimal entry price would be around ₹1,520–₹1,540, closer to support levels. If already holding, consider exiting near ₹1,720–₹1,740, where resistance is expected.

✅ Positive

• 📈 Strong ROCE (18.2%) and ROE (14%) reflecting efficient capital utilization
• 💰 Attractive dividend yield of 2.81%
• 📉 Very low debt-to-equity ratio (0.05), ensuring financial stability
• 📊 Trading above both 50 DMA and 200 DMA, showing bullish technical strength

⚠️ Limitation

• 📉 High P/E ratio (40.3) compared to industry average (26.4), suggesting overvaluation
• 📊 Negative PEG ratio (-2.85), indicating weak growth prospects relative to valuation
• 📉 RSI at 71.2, nearing overbought zone
• 📉 Quarterly profit variation at -8.18%, showing declining earnings momentum

🚨 Company Negative News

• 📉 Slight decline in quarterly PAT from ₹1,178 Cr. to ₹1,176 Cr.
• 📉 FII holding decreased by -2.68%, reflecting reduced foreign investor confidence

🌟 Company Positive News

• 📈 DII holding increased by 2.51%, showing strong domestic institutional support
• 📊 EPS maintained at ₹40.1, indicating earnings consistency

🏭 Industry

• 📊 Industry P/E at 26.4 is lower than TECHM’s, suggesting peers may be more attractively priced
• 🌐 IT sector remains resilient with long-term demand for digital transformation and outsourcing

📌 Conclusion

TECHM is a fair candidate for swing trading with strong fundamentals but short-term overvaluation risks. Entry is best near ₹1,520–₹1,540, while exit should be considered around ₹1,720–₹1,740. Traders should monitor RSI and volume trends closely to avoid entering at overbought levels.

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