Motilal Oswal: Tech Mahindra Q1 Review - Good Quarter Execution; Optimistic Outlook
Tech Mahindra’s Hyderabad campus. (Photographer: Dhiraj Singh/Bloomberg)

Motilal Oswal: Tech Mahindra Q1 Review - Good Quarter Execution; Optimistic Outlook

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Tech Mahindra Ltd.’s resilience in revenue (-5% QoQ, constant currency), especially in Enterprise, is encouraging given the current context. Decline in communications (8.2% QoQ) was on expected lines given the overhang in network services.

The margin surprise was led by better-than-expected control on selling general and administrative costs. Understandably, net new deal wins ($290 million) were weaker than the usual run-rate.

Despite the elongated decision-making cycles, the company hinted at improving deal pipeline. Revenue and margins are expected to improve from hereon. Relatively higher client concentration and the resultant impact on pricing and working capital were key concerns initially.

However, management commentary suggests these are not insurmountable. Ramp-up in recently won mega deals was largely on track, a key positive.

Click on the attachment to read the full report:

Motilal Oswal Tech Mahindra Q1FY21 Result Review.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint 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 brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.