Tech Mahindra Ltd. share price target

Steep margin improvement despite wage hikes: This was the second quarter that TECHM saw a 4% reduction in Software Professionals headcount (3,409 employees), cost benefits from which aided the 80bp EBITDA margin beat to 14.5%, also supported by the absence of visa expenses and an increase in utilization (+400bp QoQ). PAT at INR8.4b grew 4.7% QoQ, against our expectation of -2.7%, primarily led by the beat on profitability and higher other income aided by favorable hedge positions. Multiple levers yet in hand: The margin trajectory has been looking upward...

Telecom (45% of revenue) - Focusing on client mining and market share gain. Decision around discretionary spends showing some signs of revival. TECHM has not lost market share in the segment

Recently, the stock price of Tech Mahindra Ltd. (Tech Mahindra) corrected by ~15% from 52-week high of Rs.515 as it has reported lower revenue growth in the recent quarters due to slower-than-expected...

Tech Mahindra (TechM) reported stronger revenue/EBIT/PAT in Q1FY18. Lower employee costs (software employees declined ~3.4K) and steady utilization (77%) led to EBIT margin at 9.4% (our/consensus: ~8.5%) despite headwinds from visas/INR appreciation.

For 1QFY2018 Tech Mahindra posted good set of numbers. The sales came in at US$1,138mn (US$1,127mn expected) v/s. US$1,131mn in 4QFY2017, a qoq growth of 0.6%. In Rupee terms, sales came in at `7,336cr (`7,262cr expected) v/s. `7,495cr in 4QFY2017, a qoq dip of 2.1%. On operating front, the EBIT margins came in at 9.4% (8.6% expected...

ICICI Securities Ltd | Retail Equity Research Tech Mahindra (TechM) reported its Q1FY18 earnings wherein revenue growth was in line with our estimates while EBITDA margins were better than our estimate on the back of lower cost of services US$ revenues grew 0.6% QoQ to $1138.1 million and were in line with our expectation of 0.6% growth and $1,138.5 million Rupee revenues declined 2.1 % QoQ to | 7,336 crore and were in line with our | 7,339 crore estimate...

Q1FY18 revenue in CC declined only by 0.6% QoQ vs. our forecast of a 2.1% QoQ decline. Further, EBIT margin of 9.4%, +120bps QoQ and EPS of Rs9.1, +36%/+5.9% QoQ/YoY also beat to our forecast. TECHM has confirmed that the restructuring of the LCC is complete. In Q1FY18, it secured large deals worth US$325mn, maintaining the quarterly run-rate of FY17. We factor Q1FY18 beat and lower FX assumption (Rs66/67 vs. Rs67.5/Rs67.5 for FY18/19E). We largely maintain our forecast for FY18/19 revenue (US$)/EPS CAGR...

Tech Mahindra (TechM) has posted a subdued performance in 1QFY18 with its USD revenue rising by just 0.6% QoQ (-0.6% QoQ in CC terms) to US$1,138mn, below our estimates by 3.2%. The key Communications vertical continued to remain under pressure with revenue declining by 1.8% QoQ in USD terms. The vertical contributed 45.2% to total revenue in 1QFY18, the lowest in 19 quarters since 2QFY13. However, the Enterprise business grew at a much better pace of 2.7% QoQ, led by BFSI and Retail verticals. Notably, in line with our estimate, TechM's EBIT margin rose by 75bps QoQ owing to lower SG&A; and other cost. The management believes that TechM has achieved stability in business portfolio and expects positive outcomes to be...

TechM reported in-line revenue in Q4FY17 (up ~1% QoQ in cc terms). EBITDA margin at 12% (370 bps QoQ decline) was much below our estimates due to exit of loss-making contracts (~180 bps impact, oneoff), re-alignment of legacy business (~140 bps impact; will recover in 2-3 quarters)