Buy Tech Mahindra; target of Rs 765: ICICI Direct

ICICI Direct's research report on Tech Mahindra

Tech Mahindra (TechM)’s revenues declined 6.7% QoQ to US$1,207.5 million mainly led by 8.6% QoQ decline in communication revenues and 5.4% QoQ decline in Enterprise revenues. However, the EBITDA margin increased 16 bps QoQ to 14.3% mainly led by SG&A rationalisation and lower discretionary spend. The order book declined 43% QoQ due to delay in deal closure on the enterprise side.

Outlook

Hence, we remain positive on the stock and maintain BUY with revised TP of Rs 765 (15x PE on FY22E EPS).

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