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Centrum Broking: Tech Mahindra’s Strong Margin Execution Aids Growth Post Q2

Tech Mahindra’s July-September results delivered a solid beat on ebit margins, which aided higher-than-expected profit after tax.

 A person uses a laptop computer while working (Photographer: Daniel Acker/Bloomberg)
A person uses a laptop computer while working (Photographer: Daniel Acker/Bloomberg)

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Centrum Broking Report

Tech Mahindra Ltd.’s Q2 FY21 results delivered a solid beat on Ebit margin which aided in profit after tax beat.

Post strong margin beat in Q2 FY21, we raise Ebit margin assumption to 12.5/13.3/14.3% for FY21/FY22/FY23E (versus 11.1/12.1/13.1% earlier).

We note Q2 FY21 Ebit margin is 14.2% and our forward assumptions build some moderation over next quarters as hiring has to pick up in IT services (the company is now operating at peak utilization of 85%).

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Centrum Broking Tech Mahindra -Q2FY21 Results Update .pdf

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