Buy Tech Mahindra; target of Rs 1000: Sharekhan

Sharekhan's research repor on Tech Mahindra

Performance was better than expected on all parameters. TechM impressed with strong margin expansion, healthy FCF generation and pickup in deal TCVs. Management expects double digit growth over next couple of years on the back of anticipated growth in enterprise segment, potential 5G opportunities and strong deal wins. TechM is well placed to benefit from the expansion of 5G value chain across networks and IT services; expect TechM’s USD revenue/earnings to clock a CAGR of 10.5%/15.5% over FY2021-FY23E.

Outlook

We maintain our Buy rating on Tech Mahindra (TechM) with a revised PT of Rs. 1000.