Tech Mahindra Q4 Results Review - Weak Numbers; FY25 Outlook Remains Muted: Motilal Oswal

NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Tech Mahindra Ltd. reported Q4 FY24 revenue of $1.48 billion, down 0.8% QoQ in constant currency and below our estimate of +0.7% QoQ CC. Communication, media and entertainment remained weak and declined 2.8% QoQ despite a low base. Enterprise growth was mixed, with retail declining 9.6% QoQ and banking, financial services and insurance growing well at 3.5% QoQ. .Tech Mahindra had another quarter of low profitability, with adjusted Ebit margin at 7.4%, 100 bp below our estimate of 8.4%. Q4 total contract value remained weak at $500 million (+31% QoQ/-15% YoY)..The management announced its vision for FY27, with goals to outgrow peers in revenue growth and achieve Ebit margin of 15% by FY27. It also aims for a 30%+ return on capital employed profile and expects to return >85% of FCF by FY27. The focus will be on scaling large accounts, winning multi-tower deals, driving synergies from past acquisitions, improving the cost structure, and achieving profitable and predictable growth. The management aspires to be among the Top-III IT services companies in terms of margins beyond FY27..We remain positive about the restructuring at Tech Mahindra under the new leadership and believe the recent steps are in the right direction (i.e., small business unit right-sizing, investment in top accounts, vertical delivery teams and employee investments). The improvement on account of re-structuring and revamped strategy would be keenly watched out for before any re-rating..Click on the attachment to read the full report:.Tech Mahindra Q4 Results Review - Turnaround In Progress: IDBI Capital.DISCLAIMERThis report is authored by an external party. NDTV Profit 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 author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Tech Mahindra Q4 Results Review - Weak Numbers; FY25 Outlook Remains Muted: Motilal Oswal

Results of new strategy would be keenly watched before any re-rating

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