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Accumulate Tech Mahindra; target of Rs 730: PLilladher
Prabhudas Lilladher is bullish on Tech Mahindra has recommended accumulate rating on the stock with a target of Rs 730 in its November 15, 2011 research report.
Prabhudas Lilladher is bullish on Tech Mahindra has recommended accumulate rating on the stock with a target of Rs 730 in its November 15, 2011 research report.
"Tech Mahindra (TECHM) reported Q2FY12 results below our expectation; however, Satyam's contribution pushed the bottom-line performance. We expect margins to improve in Q3FY12 due to currency support and wage hike absorption. Moreover, we expect Satyam to continue to give upside risk to EPS."
"TECHM reported Q2FY12 results below our expectation. The company reported revenues of Rs13.33bn (PLe: Rs13.52bn, Cons: Rs13.53bn), a growth of 3.2% QoQ (2.2% QoQ in USD terms). Operating margins eroded by 339bps to 15.3% (PLe: 17.5%, Cons: 16.6%), due to wage hike (-300bp). PAT (incl. Satyam) declined by 13% QoQ to Rs2.4bn (PLe: Rs2.0bn, Cons: Rs1.9bn), due to Satyam's contribution of Rs1bn (Q1FY12: Rs0.96bn)."
"We believe demand environment in telecom is witnessing recovery, but uncertainty around BT would be a drag on performance. Moreover, we expect Satyam to provide much needed impetus at the bottom-line. We revise our other income estimates down for FY12 and FY13. We retain our 'Accumulate' rating, with a revise target price of Rs 730, 10x FY13e earnings estimate," says Prabhudas Lilladher research report.
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