Q4FY22 Preview: Tech Mahindra: Revenues seen at Rs121,073 million, PAT at Rs14,250 million

11 May 2022 , 03:23 PM

Result date: 13^th May, 2022
Recommendation: Buy
Target price: 1,800
 
Tech Mahindra is likely to post constant currency revenue growth of 5.6% on a sequential basis, driven by inorganic contribution and seasonality in the communication vertical.

Its EBIT margin could shrink 60 basis points sequentially, as operational improvements are offset by the lack of one off benefits on SG&A expenses (which were present in the December 2021 quarter).

Profit After Tax (PAT) could grow 4.1% on a sequential basis.

Important management insights to watch out for:

• Deal wins, particularly on 5G deals
• Revenue and margin outlook for FY23
• Capital allocation
• Integration of acquisitions
• Supply-side trends

 

	March 2022 estimates	QoQ change	YoY change
Revenue (US$ mn)	1,609	4.9%	21.0%
Revenue (Rs. mn)	121,073	5.7%	24.4%
EBIT (Rs. mn)	17,245	1.6%	7.5%
EBIT margin	14.2%	(60) bps	(220) bps
Profit After Tax (Rs. mn)	14,250	4.1%	25.9%
EPS (Rs.)	16.1	4.1%	25.5%

Source: IIFL Research