Tech Mahindra Q3 Results Review - Tepid; Margin Pickup Remains Key For A Rerating: Motilal Oswal

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..Motilal Oswal Report.Tech Mahindra Ltd. reported Q3 FY24 revenue of $1.57 billion, up 1.1% QoQ in constant currency terms. Adjusting for a one-time product-related revenue gain of 140 bp, Q3 growth came 80 basis points ahead of our expectation. Communication, media and entertainment remains a weak area, declining marginally despite a low base. Enterprise growth was mixed, with manufacturing and retail doing well, while banking, financial services and insurance and technology declined. Tech Mahindra had another quarter of low profitability, with 7.0% adjusted Ebit margin (excluding restructuring and other one-time costs), down 30 bp QoQ/500 bp YoY and slightly below our estimates. Reported Ebit margin stood at 5.4%, up 70bp QoQ. Q3 total contract value came in at $381 million (-40% QoQ/-52% YoY), pulling down its trailing 12 months total contract value/book to bill to its lowest in the last three/five years. .We remain positive about the restructuring initiatives at Tech Mahindra under the new leadership. The recent steps, including right-sizing strategic business units, investing in key accounts, establishing vertical delivery teams, and prioritising employee investments, as moves in the right direction. However, we expect to see the positive impact of these actions only gradually, which can result in near-term misalignment with investor expectations, particularly in terms of profitability. With the management committing to incremental clarity post Q4 earnings, April remains the key to any view change..Click on the attachment to read the full report:.Tech Mahindra Q3 Results: Revenue Grows After Two Quarters, Profit Misses Estimates.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 - Tepid; Margin Pickup Remains Key For A Rerating: Motilal Oswal

Clarity on business investment impact in April

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