Tech Mahindra Ltd. share price target

Tech Mahindra posted muted set of numbers for 4QFY2017. For the quarter, sales came in at US$1,131mn v/s 1,129mn expected, registering a qoq growth of 1.3%. In Rupee terms, the sales came in at `7,495cr v/s `7,533cr expected, a qoq de-growth of 0.8%. In Constant Currency (CC) terms, the company posted a 0.9% qoq growth during the...

Revenue decreased by 0.83% to Rs. 7495.0 Cr in Q4FY17 when compared to the previous quarter

In Q4FY17, TECHM secured deals with TCV of ~US$320 mn taking the TCV to ~US$1.3bn for FY17. We introduce FY19 financials. We largely maintain our FY18 US$ revenue forecast but cut EBIT margin forecast by ~190bps to 10.6%. As a result we cut our FY18E EPS by 8% to Rs36.1. We now forecast FY17-19E revenue (US$)/EPS CAGR of 8.1%/8.9%. We roll-over to FY19E and now value TECHM at PER of 12x (13x FY18E earlier). We maintain...

Tech Mahindra delivered a weak performance on both revenue and margin fronts. Revenue stood at USD 1,131mn ( 1.4% QoQ, 0.9% CC), below our estimate of USD 1,136mn. Growth was led by continued traction in Enterprise ( 3.3% QoQ), offset by LCC (Network services) restructuring and weaker-than-expected Comviva (4Q is the strongest).

Q3FY17 revenue at USD 1,116mn was higher (ours: USD 1,101 mn) driven by higher growth in BFSI (up 19% QoQ, ~13% share)and Retail (up 16% QoQ, ~8% share) among verticals and Rest of World (up 13% QoQ, ~24% share) among geographies.

Revenue grew by 5.44% to Rs. 7557.5 Cr in Q3FY17 when compared to the previous quarter. Also, it increased by 12.78% when compared with Q3FY16.

For 3QFY2017, Tech Mahindra posted results much better than expected on all fronts. The company posted sales of US$1,116mn (US$1,091mn expected) v/s US$1,072mn, a qoq growth of 4.1%. In Constant Currency (CC) terms, company posted a 5.4% qoq growth. On EBIT front, the company posted EBIT of 12.4% (12.1% expected) v/s 11.5% in 2QFY2016. Th..

Tech Mahindra delivered robust 3Q, led by continued traction in Enterprise ( 6.3% QoQ) and Telecom ( 1.7% QoQ). Telecom registered growth for the second consecutive quarter despite LCC (Network services) restructuring. Core Telecom & Comviva has been growing within Telecom while LCC will continue to drag for 1-2 quarters. Enterprise will continue to grow led by traction in BFSI and Manufacturing.

Reported PAT of | 855 crore was above our | 770.8 crore estimate led by revenue beat, higher other income and lower tax rate Enterprise segment again drives momentum TechM revenues grew 4.1% in dollar terms and 5.4% in CC terms. The key highlight for Q3FY17 was enterprise segment (52.7% of revenue), up 6.3% QoQ (vs. 5.6% QoQ growth in Q2FY17) and communication segment (47.3% of revenue), up 1.7% QoQ (vs. 2.3% QoQ growth in Q2FY17). Top five client (27.8% of revenue) revenues also continued its...

In Q3FY17, TECHM secured new deals with TCV of ~US$350 mn. It has now secured new deals with TCV of ~UD$975 mn in 9MFY17. Restructuring of LCC to be completed in two quarters and might see some revenue decline. We factor Q3FY17 beat and fine tune FY17/18 US$ revenue by 0.9%/0.4% and EPS by 3.4%/1.7%. We now forecast revenue (in US$) / EPS CAGR of 8.4%/4.7% over FY16-18E. With an 8% upside we upgrade the stock ACCUMULATE with new TP of Rs510 based on PER of 13x FY18E....