Tech Mahindra Q3 Results Review - Muted Show Led By Subdued Performance Across Verticals: Yes Securities

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..Yes Securities Report.Tech Mahindra Ltd. reported muted financial performance for the quarter. The sequential revenue growth and Ebit margin were inline with expectation. Revenue increased by 1.1% QoQ in constant currency terms. (up 1.8% QoQ in Indian rupee terms, up 1.1% QoQ in USD terms), led by manufacturing segment (up 3.4% QoQ). There was sequential improvement in Ebit margin (up 65 basis points QoQ) on lower cost of services. Employee attrition continues to moderate as last twelve months attrition was down ~1 percentage points QoQ to 10%. .The near term demand environment remains challenging as the clients remain cautious regarding the evolving macroeconomic situation and that is reflected in slowdown in discretionary spending and it continues to impact near term revenue performance. The continued weakness in telecom vertical is expected to result in muted revenue growth for FY24. Falling employee attrition, improving employee pyramid and focus on better revenue mix is expected to support operating margin going ahead. We estimate revenue compound annual growth rate of 10.7% over FY23‐26E with average Ebit margin of 11.0% over the period. We maintain our 'Neutral' rating on the stock with revised target price of Rs 1,435/share at 22.6 times on FY26E EPS. The stock trades at PER of 20.8 times/22.2 times on FY25E/FY26E EPS..Click on the attachment to read the full report:.Tech Mahindra Q3 Results Review - Tepid; Margin Pickup Remains Key For A Rerating: Motilal Oswal.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 - Muted Show Led By Subdued Performance Across Verticals: Yes Securities

The continued weakness in telecom vertical is expected to result in muted revenue growth for FY24.

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