Q2FY24 Preview: Tech Mahindra: Revenues seen at Rs. 131,054 million, PAT at Rs. 5,674 million

23 Oct 2023 , 09:31 AM

Result date: October 25, 2023

Recommendation: Reduce

Target price: Rs. 970

Analysts at IIFL Capital Services forecast revenues to decline 0.5% cc sequentially, due to continued broad based demand slowdown across Communication and Enterprise verticals. Deal wins in Q2 will probably continue to be weak, which could hurt near-term growth. Margins should contract by 130 basis points sequentially, due to organization-restructuring exercise undertaken during the quarter. 

Profit after Tax or PAT could decline 18% on a sequential basis.

Important management insights to watch out for:

• Key benefits of the organizational restructuring exercise
• Commentary on revenue and margin outlook for H2
• Deal win quantum and nature combined with the pipeline
• Structural margin levers to take current margins closer to peers
• Capital allocation

	September 2023 estimates	QoQ change	YoY change
Revenue (US$ mn)	1,585	(1.0)%	(3.3)%
Revenue (Rs. mn)	131,054	(0.4)%	(0.2)%
EBIT (Rs. mn)	7,229	(18.9)%	(51.6)%
EBIT margin	5.5%	(130) bps	(590) bps
Profit After Tax (Rs. mn)	5,674	(18.1)%	(56.7)%
EPS (Rs.)	6.4	(18.1)%	(56.7)%

Source: IIFL Research