Tech Mahindra: Quarterly Result Q4FY22
16-05-2022

Tech Mahindra | Market Cap Rs. 1,46,330 Cr

CMP Rs.1,184 | P/E 19x FY23

 

Results: Tech Mahindra (TechM) reported revenue growth of 4.9% QoQ and 21% YoY. EBIT decreased by 7.3% QoQ and -3.4% YoY due to lower utilisation and higher retention costs.

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Key Highlights:

  • Revenue growth was aided by growth in Communications (4.1% QoQ, 21.7% YoY), BFSI (18.5% QoQ, 28.2% YoY) and Technology (15.1% QoQ, 32.4% YoY). Manufacturing and Retail verticals de-grew sequentially 1.3% and 6.5% respectively.
  • Total headcount by the end of quarter was 1,51,173 (vs 1,45,067 in previous quarter).
  • Attrition rate remained unchanged at 23.5%.
  • Company won net new deals worth $1 bn during the quarter out of which $645 mn is from Communication, Media & Entertainment and the rest from Enterprise business.

Outlook: Per management, the communications vertical (~40% revenue share) will continue to propel growth for TechM in the future.

 Company has guided EBIT margins for FY23 to be in the similar range of FY22. Effective Tax Rate to be 26%-27% in FY23.

The company has also received some price hikes in H2FY22, the full effect of which will come in FY23. Utilisation of employees reduced in FY22 due to higher fresher hiring during the year (~10,000 freshers)

 

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