Tech Mahindra Ltd. share price target

Tech Mahindra (TECHM) posted results largely in-line with our expectation of moderate revenue acceleration coupled with productivity-led margin improvement. While the growth trajectory is unchanged due to persistent challenges in communications vertical and sporadic growth pattern in enterprise, we expect 2H to accelerate on LCC, Comviva seasonality as well as on account of margin drivers...

inspire the confidence that could translate into rerating for the stock. The management's reluctance to provide any guidance regarding the timeframe for the margin recovery also reducesearningsvisibility.Goingforward,weexpecttherevenuegrowthtobeimpactedby...

USD revenues at $984mn grew by 6.5% QoQ lower than consensus expectations of $992mn. Inthisquarter, LCC andSOFGEN, which thecompany acquired overlasttwo quarters, contributed $100mn to the topline adjusting for which, the revenues...

We like TM's industry-leading revenue and EPS growth profile among the top-tier IT firms. We forecast 22% USD revenue CAGR/25% EPS CAGR over FY15E-FY17E, led by the telecom and manufacturing verticals, aided by large deals and strategic acquisitions.

Tech Mahindras 3QFY15 results were inline with our estimates on USD revenues and EBIDTA margin. APAT was 3% below our estimates owing to lower other income.

Communications Corporation, a leading US-based telecom network engineering services company for an Enterprise valuation of US$240mn, implying deal valuation at 7x EV/EBITDA and 0.6x EV/Revenue in an all-cash 100% buyout. The deal is expected to be closed by 4QFY15E (Jan-end). The deal rationale is around increasing footprint in the network services space by adding diverse...

For the quarter, EBITDA was $152 million with an increase of 6.5% Q-o-Q and an EBITDA margin was 21% which is an increase of about 55 bps. For this quarter, the...