Hold Tech Mahindra; target Rs 1495: Sushil Finance

Sushil Finance's research report on Tech Mahindra

"Tech Mahindra, with ~25 percent CAGR in last six year in Non-BT accounts, compensating for decline in BT account, Tech Mahindra expects its Non-BT accounts to deliver decent growth, while BT's revenue is expected to be muted in short-term due to its internal rationalization program and stabilize going forward. The synergy form merger of Mahindra Satyam has further strengthen its market positioning as its expertise in enterprise solution space along with Tech Mahindra expertise in managed services will help it in exploring new businesses with unified Go-To-Market strategy." "In view of merged entity's consolidated Q1FY14 Results, we have changed our FY14E & FY15E estimates. We expect Tech Mahindra to deliver 19.5 percent CAGR in Revenue and 18.4 percent CAGR in APAT during FY13-15E. At CMP of Rs.1321, the stock is trading at 11.4x & 10.6x its FY14E & FY15E Earnings of Rs.115.6 & Rs.124.6 respectively. We have valued the stock at 12x its FY15E EPS and change our Rating to 'HOLD' with an increased target price of Rs 1495," says Sushil Finance research report. Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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