Accumulate Tech Mahindra; target Rs 1470: Angel Broking

Angel Broking's report on Tech Mahindra

Tech Mahindra, the Management indicated that the company remains confident of growth from the non-BT business with it continuing to see a robust deal pipeline across geographies. The revamped sales team post consolidation of Satyam and increased focus on sales efforts have started yielding results for the company. It signed three large deals in 1QFY2014, each having TCV of ~US$50- 75mn and is pursing another four. Tech Mahindra’s top five clients (excluding BT) also grew faster than the company (~8 percent sequential growth), indicating benefits from client mining. Tech Mahindra remains confident of improving revenue growth, citing healthy deal pipeline along with pick up in discretionary spending primarily in the US. Further given the significant currency tailwinds akin to peers, Tech Mahindra remains confident of maintaining margins at current levels. We expect a CAGR of 10.8 percent and 14.9 percent in USD and INR revenue respectively over FY2013-15E. We value Tech Mahindra at 13.5x FY2015E EPS of Rs 109 and maintain our Accumulate rating on the stock with a target price of Rs 1,470," says Angel Broking research report. 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.

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