Software firm Tech Mahindra's third quarter profit is expected to increase sharply by 21.2 percent sequentially to Rs 780 crore on strong operational performance.
Rupee revenue during the quarter may increase 3 percent quarter-on-quarter to Rs 7,379.5 crore and dollar revenue is seen rising 2 percent to USD 1,094 million, according to average of estimates of analysts polled by CNBC-TV18. Constant currency dollar revenue growth may be 3 percent.
Topline growth may be supported by incremental 1.5-month contribution from Target group. Telecom business should do well aided by slight improvement in Comviva and stable LCC, say analysts.
Enterprise vertical may maintain steady growth, led by BFSI and manufacturing.
EBIT (earnings before interest and tax) is expected to jump 13 percent to Rs 933.5 crore and margin may expand 115 basis points to 12.65 percent compared with previous quarter, led by absence of 120 bps of restructuring costs seen last quarter and operating efficiencies.
The stock outperformed in last 3 months due to recovery in telecom sector (that contributed 50 percent to revenue).
Key factors to watch out for would be margin trajectory, attrition rate, outlook on telecom & deal pipeline and performance of recent acquisitions (Target group, Pininfarina and BIO Agency).
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