Tech Mahindra - On a stronger footing, valuations attractive - Emkay

Reco: ACCUMULATE
CMP: Rs 884
Target Price: Rs 1050

- TechM/MSat on a stronger footing driven by improving rev growth profile for both TechM (albeit aided by acquisitions) and MSat(top client mining as well as new client wins)

- While recent deal wins and acquisitions should drive growth for TechM, MSat's prowess in the Manufacturing/EAS space should help aid client mining and revenue growth

- While bulk of margin improvement for MahSatyam done with, we see margin tailwinds from scale benefits and greater cross selling and mining of top clients

- Valuations attractive at ~9.5/9x proforma FY13/14E P/E (~25% discount to nearest peer HCLT) given upside risks to earnings (note we are 8/6% higher than consensus).

Source : Equity Bulls

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