Tech Mahindra Ltd. share price target

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)

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.