Nomura Financial Advisory and Securities has downgraded Tech Mahindra to 'Neutral' with target price of Rs 560 as against current market price (CMP) of Rs 549 in its report.

Commenting on the investment rationale, Nomura said, ''Tech Mahindra is likely to see near-zero organic revenue growth in FY16F on; consolidation of spends at its top telecom clients; pending M&As at a few top clients leading to some slowdown in spending and manufacturing which was down ~8% q-q in CC in 4Q will likely see growth only by 2QF on slow deal ramp-up and decision making delays. While non-manufacturing segments within Enterprise are growing well, we think the small revenue contribution of 25% is not enough to offset the drag in Telecom (55%) and Manufacturing (19%).

Our TP reduces to Rs 560 on; a 8%/4% cut in FY16/17F EPS on account of our lower EBIT margin expectations and a one-notch cut in the target multiple to 14x 1-year forward EPS (up to Jun-17) on risks from top 10 client concentration and high telecom exposure becoming more pronounced. We continue to prefer HCLT, CTSH and TCS on better revenue comfort. Downgrade to Neutral.''

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.