Tech Mahindra Q4 Review – Communications To Remain A Drag On FY22E Performance: Motilal Oswal

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Tech Mahindra Ltd.’s Q4 FY21 U.S. dollar revenue growth of 0.7% QoQ constant currency was below our already modest expectations.

Communications was flat during Q4 FY21, while the enterprise business posted modest growth (1.1% QoQ CC).

New deal wins of $1.04 billion were the highest in five quarters and split equally between communications (driven by the Telefonica deal win) and enterprise.

Ebit margin increased by 60 basis point to a multi-year high of 16.5%, unlike our expectation of a 20bp QoQ dip.

An increase in margin was led by further rationalizing of headcount (847 employee reduction) while maintaining peak utilization levels (87%).

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Motilal Oswal Tech Mahindra Q4FY21 Result Review.pdf


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