1527.6000 33.90 (2.27%)
NSE May 12, 2025 09:49 AM
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Tech Mahindra Ltd.
06 Sep 2019
1527.60
2.27%
Motilal Oswal
6 September 2019 We are modeling in incremental annual revenue of USD150m from FY21, while total revenue recognition will be ~USD57m in FY20. We have increased our CC revenue growth estimate for FY20/21 from 5.5%/8.2% to 5.8%/9.9% on account of the large deal ramp-up from the mid of 3QFY20. The deal is expected to weigh marginally on profitability in the initial transition phase, which may include some personnel transfer from AT&T; to TECHM. We thus lower our EBIT margin estimate for FY20/21 by 20bp to 13.1/13.8%. Overall, we expect the deal to have a limited impact on EPS in FY20 and be accretive FY21 onward. Consequently, we maintain our EPS estimate for FY20 but increase it by 1% for FY21. After a sluggish start to the year, the earnings growth outlook has turned muted for FY20. In our view, revenue growth remains crucial for a recovery in margins. The announcement of AT&T; deal comes as a booster to that effect.
Tech Mahindra Ltd. has an average target of 1779.70 from 10 brokers.
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