Hold Tech Mahindra; target of Rs 850: Sharekhan

Sharekhan's research report on Tech Mahindra

Our positive stance underpins company’s comprehensive capabilities in telecom space, improving capabilities in enterprise business and a better-go-to market strategy. Tech M has successfully transformed itself from a telecom-centric player to one with a wide portfolio of differentiated offerings in the enterprise segment. Key levers for margin improvements are (1) reduction in subcontracting expenses, (2) higher offshore mix, (3) better profitability of acquired entities and (4) exit from non-profitable operations.

Outlook

Initiate coverage on Tech Mahindra (Tech M) with Buy rating and price target of Rs. 850, given potential 5G opportunity and anticipated rise in margins.

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