Tech Mahindra added 12 new logos in Q3, with two dozen+ accounts crossing $1 million plus annual revenue run rate (in the must-have category).
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Dolat Capital Report
Tech Mahindra Ltd.’s Q3 FY25 revenue stood at $1,567 million, reflecting 1.2% QoQ growth in cc terms (our estimate: 0.3%). The growth was led by banking, financial services and insurance (+2.7% QoQ) and Healthcare (+4.5% QoQ), while tech and telecom saw modest performance (-0.9%/+0.4% QoQ in CC terms).
Operating profit margin stood at 10.2%, an increase of 54 bps QoQ (our estimate: 9.7%).
Management remains cautious on discretionary tech spending but is optimistic about sustained large deal wins (+24% QoQ to $745 million). However, the ongoing macro uncertainties in telecom and auto remain a drag, raising concerns about the company meeting the FY27 target of 15% Ebit margins.
We revise our FY25/FY26/FY27E EPS estimate by -1.6%/-2.7%/-2% due to the uncertain macro environment and ambitious growth targets set by the company.
As the risks associated to the estimates are high, we maintain ‘Sell’ rating with target price of Rs 1,570 at 23 times (FY27E earnings of 68.3).
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