Tech Mahindra Q4 results review, IDBI Capital

Tech Mahindra Ltd. reported subdued revenue growth in Q4 FY23 mainly due to slowdown in demand. Going forward, we expect H1 FY24E to remain subdued due to delay in decision making, delay in deal conversion and slowdown in demand due to macro uncertainty.

Tech Mahindra’s deal wins are also down 26% QoQ and 41% YoY to $592 million. Hence, we have revised our revenue estimates downwards by 1.8% in FY24E.

In addition, we believe Tech Mahindra’s aspiration of 14-15% margins seems difficult in near term due to demand pangs. Hence, we have lowered our earnings per share estimates for FY23E and FY24E by 10.7% and 6%. Bloomberg