Prabhudas Lilladher's research report on Tech Mahindra
Tech M delivered a steady result for 1QFY19 with a beat on both revenues and margins. Revenues for 1QFY19 came at USD1224mn down 1.6% QoQ and above our estimates (USD1219mn). Constant Currency growth for the quarter stood at 0.3% QoQ and above our estimates (We estimated 1% decline in cc revenues). Communication vertical revenues were down 6.5% QoQ and accounted to 39.6% of total revenues.
Outlook
We have already trimmed our earnings estimates modestly during 1Q preview. Our EPS estimates are retained at Rs46/50.5/sh for FY19/FY20E. Stock trades at 13x FY20E EPS which is cheap (HCL Tech /Wipro also trading at 12.4/12.9x FY20E EPS). Our TP is retained at Rs760/sh (15x FY20E EPS). Retain BUY.
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