Q4FY23 Preview: Tech Mahindra: Revenue seen at Rs 139,501 million, PAT at Rs 13,314 million

25 Apr 2023 , 10:44 AM

Result date: 27^th April, 2023

Recommendation: Add

Target price: Rs 1,200

Analysts at IIFL Capital Services believe Tech Mahindra’s revenues could decline 0.4% cc sequentially, due to broad-based demand slowdown across verticals and continued top client weakness. Deal wins in Q4 are also likely to highlight the impact of weakening macro. Analysts at IIFL Capital Services expect margins to expand by 40 basis points sequentially, as the company continues to rationalize lower-margin business and reaps in benefits of improved productivity.

The company’s Profit After Tax or PAT could grow 2.7% on a sequential basis.

Important management insights to watch out for:

• Deal wins, including color on 5G deal
• Revenue and margin outlook for FY24
• Comments on capital allocation and integration of acquisitions
• Supply-side and attrition trends, sub-contracting costs and employee additions

	March 2023 estimates	QoQ change	YoY change
Revenue (US$ mn)	1,695	1.6%	5.4%
Revenue (Rs. mn)	139,501	1.6%	15.1%
EBIT (Rs. mn)	17,300	5.1%	7.8%
EBIT margin	12.4%	40 bps	(80) bps
Profit After Tax (Rs. mn)	13,314	2.7%	(11.6)%
EPS (Rs.)	15.0	2.7%	(11.2)%

Source: IIFL Research