Nomura maintains a Buy rating on Tech Mahindra, forecasting a 13% upside with a target price of Rs 1900. The brokerage sees the company’s turnaround underway, and Q2 results surpassed expectations on most fronts.
Revenue for Q2 came in at $1,589 million, up 0.7% quarter-on-quarter and 1.2% year-on-year in constant currency terms, beating consensus estimates. Communications vertical growth was strong at +2.7% quarter-on-quarter, while the hi-tech, retail, and banking verticals also performed well. Additionally, the EBIT margin was reported at 9.6%, ahead of the consensus estimate of 9.2%, showing a 110 basis points improvement quarter-on-quarter.
Nomura sees Tech Mahindra progressing steadily toward its medium-term goals and believes the company is well-positioned for growth in the coming quarters.
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