Dolat Capital
Tech Mahindra (Accumulate)
CMP: ₹2,471.05
Target: ₹2,900
Key takeaways: a) Telecom vertical has been driving the momentum for Tech M for the last couple of quarters and is expected to gain further traction hereon. The company is witnessing incremental momentum from the top five account excluding BT; b) Telecos are investing across service areas such as networks, managed services digital and rollouts. Newer clients such as KPN has been doing exceedingly well and is already in top five now. It has pipeline of another 40 fringe clients that may start gaining grounds as IT allocations improves; c) It is working with most of the major global telecoms and is able to garner more market share in areas in Benelux market for managed services. It also has won a deal recently from a competitor carrier to KPN. Africa and West Asia continues to provide the regular deal through network expansion and new roll outs. It has also strengthened access to South America through its Brazilian acquisition of Complex IT. It has also opened offices in Saudi Arabia and Korea. d) The company believes that the OPM should improve hereon given improved volumes across the verticals.