February 01, 2017 / 10:55 IST
TechM revenues grew 4.1% in dollar terms and 5.4% in CC terms. The key highlight for Q3FY17 was enterprise segment (52.7% of revenue), up 6.3% QoQ (vs. 5.6% QoQ growth in Q2FY17) and communication segment (47.3% of revenue), up 1.7% QoQ (vs. 2.3% QoQ growth in Q2FY17). Top five client (27.8% of revenue) revenues also continued its momentum by growing 1.5% QoQ.
OutlookWe believe TechM could witness a gradual uptick in communication vertical post its completion of restructuring activity and continued momentum for enterprise vertical (16% growth in 9MFY17 over 9MFY16). We anticipate TechM will report rupee revenue, PAT CAGR of 11.1%, 7.3%, respectively, in FY16-18E (average 15.5% EBITDA margins in FY17-18E), driven by strong order bookings and large deal ramp-ups. We maintain our BUY recommendation on TechM with a target price of Rs 525 based on FY18E EPS of Rs 40.4.
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