Tech Mahindra Ltd. share price target

Tech Mahindra is expected to post sales of US$107mn (vs. US$106mn expected), registering a qoq growth of 4.0%. In Constant Currency (CC) terms, the company posted a qoq growth of 5.0%. The EBIDTA margin came in at 14.9% (vs. 14.6% expected vs. 14.6% in 1QFY2017). Margins adjusting for onetime restricting expenses came in at 16.1%, an exp..

We factor Q2FY17 revenue beat and increase FY17/18 US$ revenue by 1.2%/0.8% and EPS by Bloomberg/Reuters TECHM IN/TEML.BO 0.7%/1%. We now forecast revenue (in US$) / EPS CAGR of 7.6%/2.1% over FY16-18E....

Tech Mahindra delivered robust 2Q, telecom ( 2.3%) outperformed enterprise organic growth after eight quarters and EBITDA margin performance was heartening (16.4% ex-restructuring one-off). Management believes core telecom business revival is evident, LCC will bottom out in 3Q and 2H will be strong for Comviva.

On yoy metrics, BFSI (+27.1% growth), Manufacturing (+22%) and Retail, Transport & Logistics (+20.2%) verticals all recorded double digit growth, apart from Others (+10.9%). Geo-wise, Europe saw strong growth of 9.1% qoq (aided by Pininfarina), while the US grew 2.5% qoq. On the margin front, adjusted for one-time restructuring expenses related to LCC mainly, EBITDA margin rose by 120bps qoq, aided by higher...

ICICI Securities Ltd | Retail Equity Research Tech Mahindra (TechM) reported Q2FY17 earnings, which exceeded our expectations on the revenue front US$ revenues grew 3.9% QoQ to $1,072.4 million ahead of our $1,047 million estimate. Constant currency revenues grew 5% QoQ Rupee revenues grew 3.6% QoQ to | 7,167 crore and were above our 1.3% QoQ growth and | 7,010.5 crore estimate At 14.9%, EBITDA margins remained unchanged QoQ and were...

Tech Mahindra delivered 0.9% QoQ ( 0.4% CC) growth in 1QFY17, led by Pininfarina (~USD$ 9mn one-month contribution) while organic revenue was flat (1Q revenue at US$ 1,032mn was in-line with est). EBITDA performance was lacklustre, due to integration of low-margin acquisition, Comviva seasonality and higher visa cost.

ICICI Securities Ltd | Retail Equity Research Tech Mahindra (TechM) reported Q1FY17 earnings, which were largely in line with our estimates US$ revenues grew 0.9% QoQ to $1,031.5 million, largely in line with...

USD revenue at $1,032mn (+0.9% qoq) inline with street but higher than our expectation (+0.1% qoq). Positive cross currency impact of 50bps. EBITDA Margins at 14.9% - decline of 185bps qoq significantly below our and street expectations of 15.8%. Margins were impacted by visa cost (-100bps) and seasonally weak Comviva business (-180bps) partly negated by operational efficiencies. Margins have now fallen by 530bps over the last six quarters. Geographies: US grew 5.6% qoq while Europe remained flat. RoW declined by -7% qoq. Verticals: Telecom continued to be weak declining by -2.5% qoq. BFSI grew 7.5% qoq,...

In our view, there is nothing enthusing about Tech Mahindra's 1QFY17 financial report. From a revenue perspective, its revenue from its key vertical i.e. Telecom declined 2.5% qoq in USD terms owing to weak seasonality. Manufacturing clocked a healthy 6.8% qoq growth, though aided by Pininfarina consolidation (one month contribution of US$9mn), while BFSI (+7.5% qoq) and Retail, Transport & Logistics (+5.8% qoq) also clocked encouraging performances. On yoy basis, BFSI, Manufacturing & Others three verticals which account for ~37% of Tech Mahindra's total revenue recorded double digit growth of 17.8%, 10.4% & 20.6%, respectively in 1QFY17. Thus, more...

aided by sharp increase in treasury income. Revenue growth of 0.9% QoQ, including +50bps benefit of cross currency, was also higher than our forecast. However, EBIT margin of 12%, 160bps QoQ, missed our forecast impacted by higher than expected QoQ decline in Comviva's business (on account of seasonality). In Q1FY17, TECHM secured new deals with TCV of ~US$300mn following ~US$1.3bn worth deals secured in FY16. The no. of US$20m+ clients increased by 2 QoQ to 42 vs. 36 in Q1FY16....