Tech Mahindra is expected to report a deceleration in revenue growth in constant currency terms for the quarter ended March, mainly on a sequential basis due to fewer working days and extended furloughs in January.
The company will declare its results on March 27.
ICICI Direct Research has said this in its report Tech MahindraIts revenue is expected to decline by 1%, while EBITDA margin is expected to decline by 10 bps. It added that Q4 is a seasonally weak quarter due to fewer working days and extended furloughs in January.
“For Q4, we expect TechM to report 1.0% CC QoQ revenue decline due to i) extended furloughs in January ii) declining demand iii) portfolio re-alignment (exiting low margin markets), etc. US $15 million impact. 100 bps tailwinds, we expect dollar revenue to be flat QoQ while rupee revenue is likely to decline 0.1% QoQ. Demand environment remains challenging, which will likely reflect in their Q4 order book, which may fall short of the guided range of US$700 mn. to US$1 bn. The company does not have exposure in regional banks, while more than 50% of their BFSI vertical is towards insurance. We see declining revenue and higher sub -Expect a 20 bps sequential EBIT margin decline for Q4 due to contractor costs, etc. Investor interest: Client budget commentary, FY24 outlook on revenue and margins,” ICICI Direct said.
Whereas, Motilal Oswal said that extended furloughs in telecom clients, broad-based softening and persistent headwinds will result in a 0.7% CC revenue decline in 4QFY23.
The IT major sees a 13.9 per cent decline in profit, while revenue in dollar terms is likely to grow at 0.3 per cent, while revenue is expected to grow by 0.7 per cent in cc terms for the quarter.
It expects Tech Mahindra’s deal wins to remain soft in the $500-700m quarterly band, while hiring may remain muted.
“We expect 10 bp decline in EBIT margin due to lack of operating leverage. Margin and growth outlook in telecom vertical may be monitored.”
Tech Mahindra’s consolidated net profit came in 1,296.6 cr, down 5% YoY third quarter Expires on December 31, 2022. Posted by company 1,368.5 crore in profit in a year-ago period, while revenue from operations came in 13,734.6 crore for the third quarter under review, up 20% year-on-year and 4.6% quarter-on-quarter.
The company’s stock closed down 0.025 per cent on Wednesday. 996.50 on BSE.
Tech Mahindra shares have declined around 1.29% this year and they are down 21.01% in last one year period.
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