Accumulate Tech Mahindra; target of Rs 1100: PLilladher

Prabhudas Lilladher is bullish on Tech Mahindra and has recommended accumulate rating on the stock with a target of Rs 1100 in its November 5, 2012 research report.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead Travelcafe
moneycontrol.com

Home » News » Recommendations

Nov 06, 2012, 12.26 PM | Source: Moneycontrol.com

Accumulate Tech Mahindra; target of Rs 1100: PLilladher

Prabhudas Lilladher is bullish on Tech Mahindra and has recommended accumulate rating on the stock with a target of Rs 1100 in its November 5, 2012 research report.

Like this story, share it with millions of investors on M3

Accumulate Tech Mahindra; target of Rs 1100: PLilladher

Prabhudas Lilladher is bullish on Tech Mahindra and has recommended accumulate rating on the stock with a target of Rs 1100 in its November 5, 2012 research report.

Post Your Comments

Share Cancel

(more)

, Prabhudas Lilladher |

Prabhudas Lilladher is bullish on Tech Mahindra and has recommended accumulate rating on the stock with a target of Rs 1100 in its November 5, 2012 research report.

“Tech Mahindra (TECHM) reported revenue/margin ahead of PLe/Consensus expectation. Moreover, lower tax rate and stronger Satyam’s contribution pushed the bottom-line performance. We continue to see problems with top client (BT). However, growth of non-BT revenue and Satyam’s performance is expected to give a boost to the bottom-line.”

“TECHM’s Q2FY13 results were ahead our expectation. The company reported revenue of Rs16.31bn (PLe: Rs15.73bn, Cons: Rs16.08bn), a growth of 5.7% QoQ (6.4% QoQ in USD terms. 5.9% @cc). Operating margins eroded by 69bps to 20.7% (PLe: 20.4%, Cons: 18.9%), despite headwinds due to wage hike and currency appreciation. Excluding Satyam, PAT declined by 5.6% to Rs.1.78bn (PLe: 1.87bn). EPS’ contribution, including Satyam’s, declined by 12.5% QoQ to Rs22.71 (PLe: Rs23.18, Cons: Rs19.70). The decline is large due to forex loss of Rs640m (Q1FY13 loss: Rs 174m).”

“Despite wage hike (-150bps) and Hutch’s contribution (-30bps), TECHM managed EBITDA margin of 20.7% (-69bps) driven by 1) improving projects profitability and 2) automation & component reuse. The management expects utilization to go up marginally, leaving room for margin tailwind, with headwinds of project ramp-ups & inorganic contribution. Revising our estimates for FY13 and FY14 upwards (Exhibit 2). We expect demand environment to be stable with recovery in deal pipeline from service provider and static show at BT. Moreover, Satyam would provide respite at the bottom-line. We retain our ‘accumulate’ rating, with a revised TP of Rs1,100, 10x FY14e earnings estimate,” says Prabhudas Lilladher research report. 

Non-Institutions holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click here

Ads by Google

Buy, Hold, Sell ? Hear it first on M3
Accumulate Tech Mahindra; target of Rs 1100: PLilladher

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login