Tech Mahindra Q1 Results Review - Big Miss On All Count; Recovery May Take Longer Than Expected: Dolat Capital

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Dolat Capital Report.Tech Mahindra Ltd.'s revenue declined by 4.2% in constant currency terms versus (our estimate: -1.9% CC). Decline was led by de-growth in communication, media and entertainment at 9.5% QoQ, while enterprise segment revenue declined by 0.3% QoQ. IT services was down 5%, while business process outsourcing business grew 1.3% QoQ (Indian rupee). Operating profit margin stood at 6.8%, (our estimate: 10.2%), down 440 basis points QoQ led by unexpected headwinds from revenue decline (200 bps), one-time provision impact from client’s bankruptcy (200 bps) and adverse seasonality in Comviva (50 bps).Tech Mahindra attributed decline was led by completion of multiple transformation programs and weak refill rate (total contract value down 25% on trailing twelve months basis at $2.5 billion), exit of a Telco client due to bankruptcy and deals pushed out in digital. It pointed worst is behind, and tight focus on execution would lead to revival.Overall performance remain sluggish. Macro risks, including spending cuts by telecoms is more susceptible to Tech Mahindra. Expect leadership strategy as only medium term catalyst. Maintain 'Sell' with target price of Rs 1,080 at 18 times of FY25E..Click on the attachment to read the full report:.Tech Mahindra Q1 Results: Revenue, Profit Slump As IT Slowdown Bites.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Tech Mahindra Q1 Results Review - Big Miss On All Count; Recovery May Take Longer Than Expected: Dolat Capital

Focus on new leadership strategy and ‘execution’ is the key.

NDTV Profit

NDTV Profit

Follow Us

DISCOVER US FASTER

DOWNLOAD THE APP