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Tech Mahindra Q1 Review - Initiated Rally Phase: Prabhudas Lilladher

Tech Mahindra Q1 Review - Initiated Rally Phase: Prabhudas Lilladher

A Tech Mahindra Ltd. office building in the Electronic City area of Bengaluru, India. (Photographer Dhiraj Singh/Bloomberg)
A Tech Mahindra Ltd. office building in the Electronic City area of Bengaluru, India. (Photographer Dhiraj Singh/Bloomberg)

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

Prabhudas Lilladher Report

Tech Mahindra Ltd. reported strong growth of 4.1% QoQ U.S. dollar much above our and street estimates (our estimate: 2.2%, consensus: 2.4%).

Growth was led by enterprise segment and communications in seasonally weak quarter grew up 3.2% QoQ U.S. dollar, registering highest ever Q1 growth in last five years.

Ebit margins came at 15.2% above our and consensus estimates (our: 14%, consensus:14.4%).

Management is confident on maintaining Ebit margins above 15% despite headwinds from supply side crunch - higher attrition (17%, up 400 bps QoQ) coupled with all-time high utilisation (88% in Q1 FY22) due to margin levers such as-

  1. expand offshoring,

  2. general and administrative costs centralisation for portfolio companies

  3. operational efficiency and automation,

  4. pyramid optimisation and

  5. revenue growth leverage.

Click on the attachment to read the full report:

Prabhudas Lilladher Tech Mahindra Q1FY22 Result Update.pdf

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