Strong Q2 nos push Tech Mahindra 3% higher; Jefferies raises target to Rs 770

The consolidated EBIT margin rose to 15.3 percent a rise of over 2 percentage points from 13 percent quarter on quarter.

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Shares of Tech Mahindra rose 3 percent intraday Wednesday after its Q2 consolidated net profit jumped 19 percent to Rs 1,064 crore from Rs 898 crore.

The revenues rose 4 percent at Rs 8,630 crore against Rs 8,276 crore during the previous quarter.

The consolidated EBIT margin rose to 15.3 percent a rise of over 2 percentage points from 13 percent quarter on quarter.

Brokerage: Axis Capital | Rating: Buy | Target: Cut target to Rs 870 from Rs 1,000

Company remains upbeat on growth prospects in FY19/20 led by strong deal wins, said Axis Capital.

It feels that revenue trajectory in enterprise segment is likely to improve after Q2 blip.

The research firm expect company to deliver dollar revenue CAGR of 9% with margin improvement of over 250 bps

It cut target multiple to 15x from 16x on growing uncertainty due to global trade woes

Brokerage: Jefferies | Rating: Hold | Target: Raised target to Rs 770 from Rs 755

The Q2 constant currency growth of 0.4% was below our estimate of 1.2%. The miss appears to have been mainly due to decline in HCI revenue of USD 40 million, said Jefferies.

It cut revenue growth estimates to 5.2% CC and cut revenue across FY19-21e and raised EBITDA margin estimates to over 18% across the next three years.

At 10:08 hrs Tech Mahindra was quoting at Rs 701.75, up Rs 18.10, or 2.65 percent on the BSE.

The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

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