Hold Tech Mahindra; target of Rs 526: Axis Direct

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26 Aug, 2025 12:21

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Axis Direct Research report on Tech Mahindra
Telecom vertical (~51% share) to drag growth in H1CY16: Management shared that Telecom and Oil& Gas vertical remain challenging. Telecom has been impacted by consolidation in sector (delay in decision making), pressure in voice/data prices for telecom operators and change in spend patterns (towards video/entertainment/ modernization of networks). This would impact H1CY16.  Deal pipeline: 9mFY16 saw ~USD 1 bn deal wins (Q1: USD 400 mn, Q2: USD 300 mn, USD 275mn) Enterprise vertical ( 49% share) recorded strong growth of 4% QoQ led by Retail, Healthcare and Manufacturing Multiple margin levers exist which would aid margin improvement. This include higher offshore revenue share, improvement in profitability of acquisitions, change in business mix and productivity enhancement through automation/platforms. Margin for LCC acquisition was flat at 6% (targeting 10-12% over next 2 years) Acquisitionsbeing targeted in areas of BFSI and Healthcare among verticals and Engineering /Platforms/BPO among service offerings.For all recommendations, click here 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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