Tech Mahindra Q2 Results Review - Big Miss On All Counts; Recovery To Be Gradual: 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 decline by 2.4% in constant currency versus (our estimate: -1% CC). Decline was led by de growth in communications, media and entertainment at 4.9% QoQ while enterprise revenue declined by 1.6% QoQ. IT Services was down 2.5% in rupee terms, while business process outsourcing business de-grew 0.7% QoQ.Reported operating profit margin stood at 4.7%, (our estimate: 5.3%), down 210 basis points QoQ. Adjusting for one-time Goodwill impairment impact (120bps), it stood at 5.9%. Tech Mahindra's management attributed decline was led by continued portfolio rationalisation of low yield areas and weak refill rate (total contract value down 26% on trailing twelve months basis at $2.4 bllion). It pointed that it will continue to rationalise in coming quarter and have proposed new organisation structure effective January 01, 2024. Overall performance remain sluggish. Macro risks, incl. spending cuts by key clients remains susceptible. Expect renewed strategy to pave way but that would be gradual. Assign 'Reduce' with target price of Rs. 1,180 at 18 times of FY26E..Click on the attachment to read the full report:.Tech Mahindra Q2 Results: Profit Drops By Nearly A Third, Revenue Down Again.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 Q2 Results Review - Big Miss On All Counts; Recovery To Be Gradual: Dolat Capital

Muted deal wins to drag overall growth; key verticals not active now.

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