Add Tech Mahindra, target price Rs 1720: HDFC Securities

HDFC Securities has add call on Tech Mahindra with a target price of Rs 1720. The current market price of Tech Mahindra Ltd. is Rs 1468.95. Time period given by analyst is one year when Tech Mahindra Ltd. price can reach defined target.

Tech Mahindra Ltd., incorporated in the year 1986, is a Large Cap company (having a market cap of Rs 142535.99 Crore) operating in IT Software sector.

Tech Mahindra Ltd. key Products/Revenue Segments include Software Services for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 11673.90 Crore, up 4.57 % from last quarter Total Income of Rs 11163.40 Crore and up 18.30 % from last year same quarter Total Income of Rs 9868.00 Crore. Company reported net profit after tax of Rs 1378.90 Crore in latest quarter.

Investment Rationale
Factored USD revenue/EPS growth at 15/18% CAGR based on enterprise growth at 17% CAGR and communications growth at 12% CAGR over FY22-24E. Operational improvement, improved capabilities in cloud, engineering & design supported by recent acquisition intensity (also a risk) and uptick in Communication vertical

Promoter/FII Holdings
Promoters held 35.67 per cent stake in the company as of 31-Dec-2021, while FIIs owned 35.36 per cent, DIIs 17.23 per cent.