February 02, 2017 / 16:08 IST
Tech Mahindra’s (TECHM) Q3FY17 revenue, at USD 1,116mn (up 4.1% QoQ, 5.4% CC), surpassed Street’s 1.9% growth estimate. EBITDA margin expanded 80bps QoQ to 15.7% versus 15.8% estimate in spite of adverse currency movement and furloughs. Key highlights were: 1) telecom grew 1.7%, non-telecom revenue (USD) grew 6.3%; and 2) won USD350mn plus TCV.
OutlookManagement highlighted that demand outlook is robust owing to comprehensive digital offerings and the company can improve margins by increasing utilisation. While we retain FY17 growth estimates, FY18E margins and growth outlook appears brighter. Maintain ‘BUY’ with a target price of INR 642 (14x FY19E EPS).
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