Tech Mahindra an outperformer: Prabhudas Lilladher

Prabhudas Lilladher has maintained its outperformer rating on Tech Mahindra with a target price of Rs 850 in its July 21, 2008 research report. "TechM reported strong numbers (9.3% rev growth QoQ) and healthy operating metrics. It also announced a new USD 700 million deal from BT. Growth was led by US (Europe contributed over 72 % revenue) even as share of the dominant Telecom Service Provider vertical dipped below the 90% revenue contribution mark for the first time at 87.7%."

"We expect TechM to report earnings growth of 36.3% and 19.4% in FY09 and FY10 respectively. Sitting on a robust order book from BT and minimal exposure to US, TechM appears well positioned to deliver steady growth at a time when peer group is facing headwinds. At the CMP of Rs 679, it quotes at 9.6x FY09E adjusted earnings. Maintain Outperformer rating with a target price of Rs 850 (12x FY09E adjusted earnings)," says Lilladher's research report.

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