Tech Mahindra Q1FY22RU - First cut - YES SECURITIES

Tech Mahindra Q1FY22 Result: In-line performance- Spike in attrition a concern)

Revenue was broadly in line at $1,384 mn( up 4.1% QoQ)

Growth was led by strong performance in enterprise segment that grew 4.7% in USD terms; whereas CME( Communication, Media and Entertainment) reported modest growth of 3.2% QoQ in USD terms.

In term of geographical break up, growth was supported by strong performance in the Americas (up 6.8% QoQ)and Europe( up 6.6% QoQ), while Rest of World showed degrowth of 2.7% QoQ in USD terms.

EBITDA margin declined 160 bps QoQ to 18.4% as per expectation led by wage hike in the quarter

Offshore revenue mix grew 100 bps QoQ to 38% as per industry trend.

New deal wins remained strong- at $815 mn vs $1,043mn in Q4FY21 and $290 mn in Q1FY21.

Number of active clients grew by 51 QoQ.

LTM Attrition has jumped 400 bps QoQ to 17% in the quarter (area of concern). Utilisation increased by 100 bps QoQ to 88%.

Inline performance, We currently have ADD rating on the stock.

Shares of TECH MAHINDRA LTD. was last trading in BSE at Rs. 1209.45 as compared to the previous close of Rs. 1127.75. The total number of shares traded during the day was 937708 in over 34150 trades.

The stock hit an intraday high of Rs. 1237 and intraday low of 1175.05. The net turnover during the day was Rs. 1140509288.

Source : Equity Bulls

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