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Tech Mahindra's shares trading lower ahead of Q2 earnings; here's what to expect

Tech Mahindra's shares trading lower ahead of Q2 earnings; here's what to expect

Tech Mahindra stock touched an intraday low of Rs 1,483.45, falling 2.28% on BSE.

Tech Mahindra stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Tech Mahindra stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Shares of IT major Tech Mahindra were trading lower ahead of the firm's Q2 earnings set to be announced today. The large cap stock touched an intraday low of Rs 1483.45, falling 2.28% on BSE.

Tech Mahindra stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The IT stock has gained 78.2% in one year and risen 55.32% since the beginning of this year. Total 1.71 lakh shares of the firm changed hands amounting to turnover of Rs 25.71 crore on BSE.

Market cap of the firm stood at Rs 1.46 lakh crore on BSE.

The share hit 52-week high of Rs 1,575 on October 20, 2021 and 52-week low of Rs 782.5 on October 29, 2020.

The IT services firm  is likely to post a revenue growth of around 5 percent on a sequential basis on the back of strong growth in Enterprise Segment (ES) driven by digitisation and a pick-up in momentum of 5G deals in Communication Segment (CS).

Net profit is expected to rise 2 percent on a quarter on-quarter basis due to the impact of higher employee costs on margins. Attrition rate will also be a key figure to watch out for.

Kotak Institutional Securities said, "Multiple small acquisitions will contribute incremental $11.5 million or 0.8 percent to revenues. These acquisitions include DigitalOnUs and Eventus Solutions."

The brokerage expects Q2 revenue to come in at Rs 10,649 crore.

A report by brokerage Sharekhan expects revenue to rise by 4.8 percent QoQ on a constant currency basis and cross-currency headwinds of around 80 bps on its USD revenue. The dollar revenue is seen climbing 4 percent QoQ and INR revenue is pegged at Rs 10,665 crore.

Sharekhan said growth would be driven by strong growth in both CME and enterprise segments and incremental revenue contribution from multiple small acquisitions.

Another brokerage Motilal Oswal sees a constant currency growth of 3.5 percent on a QoQ basis. It pegs the dollar revenue at $1,432 million and INR revenues at Rs 10,600 crore.

In Q1 of the current fiscal, Tech Mahindra reported a 42.91 per cent growth in June quarter consolidated net profit at Rs 1,365.7 crore on higher revenue and an expansion in profit margins.

Profit in the year-ago period stood at Rs 955.6 crore. The total income grew 10 per cent when compared to the year-ago period.


The dollar revenue in Q1 came in at $1,384 million, up 14.6 per cent YoY and 4.1 per cent QoQ. In constant currency terms, the revenue rose by 3.9 per cent QoQ.

EBITDA (earnings before interest, tax, depreciation and amortisation) in Q1 stood at Rs 1,876.4 crore compared with Rs 1,300.5 crore in the June 2020 quarter. In March 2021 quarter, EBITDA stood at Rs 1,948.1 crore.

Published on: Oct 25, 2021, 2:57 PM IST
Posted by: Aseem Thapliyal, Oct 25, 2021, 2:03 PM IST