Tech Mahindra Q3 Results Review — Inline With Growth Strategy, IDBI Capital Maintains 'Hold' On The Stock

Tech Mahindra aims to achieve 15% margins by FY27E versus 6% in FY24 by pyramid correction (consistent fresher hiring), synergy benefits, higher fixed price projects (as pyramid will help in driving efficiency) and pricing..NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .IDBI Capital Report.Forex movements proved negative for Tech Mahindra Ltd. leading to muted $ revenue. In reported terms, revenue dipped by 1.3% (led by furloughs) and improved by 1.2% (led by banking, financial services and insurance and healthcare) in constant currency terms QoQ. Inline with their strategy, company is investing (1.5% of margin) in leadership in other verticals (maintaining leadership in communication and manufacturing) to improve the revenue mix which would lead to reduction in concentration risk (telcos). With expanding the verticals, Tech Mahindra is also investing in leadership for lesser penetrated geos (Europe, Asia pacific, etc). We believe, these investments would impact the margins in the short run, however, operational efficiency and rigor would be able to offset. In Q4 FY25, margins will dip by ~1.5% on account of wage hike implementation. With improving demand environment, company is sanguine on CY25 to be better than CY24 coupled with signs of demand recovery (in telecos and other verticals) and steady pace of large deal wins ($745 million, +23%QoQ). Based on the company’s growth trajectory in past a year and upcoming strategy, we expect company to perform well. Contingent to, we roll into FY27 by maintaining the target price at Rs 1,778 (24x FY27E EPS) and Hold rating..Click on the attachment to read the full report:.Tech Mahindra Q3 Results Review — Dolat Capital Maintains 'Sell' On The Stock; Here's Why.DISCLAIMERThis report is authored by an external party. NDTV Profit 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 NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Tech Mahindra Q3 Results Review — Inline With Growth Strategy, IDBI Capital Maintains 'Hold' On The Stock

Based on Tech Mahindra's growth trajectory in past a year and upcoming strategy, the brokerage expects company to perform well.

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