Reliance Sec downgrades Tech Mahindra to Hold; cuts target to Rs 650
Source: IRIS | 27 May, 2015, 11.20AM
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Rating: NAN / 5 stars. |
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Reliance Securities has downgraded Tech Mahindra (TECHM) to 'Hold' from 'Buy' and cut target price to Rs 650 from Rs 825 in its report.
Commenting on the investment rationale, the stock broker said, 'Tech Mahindra's Q4 surprised negatively on constant currency revenue de-growth and depression in margins with decision cycle deferment in manufacturing vertical and lower LCC performance. We believe that margin recouping from Q4 will be protracted as headwinds intensify such as visa cost and business integration. We expect TECHM to post USD revenue/EPS CAGR of 17.8%/18.2% over FY15-17E and we've factored EBITDA% at 16.3%/17.7% for FY16E/17E as compared to 18.4% in FY15. We lower our revenue estimates by ~3% and EPS estimate by ~20% on margin re-set; downgrade our recommendation to Hold (Buy earlier) with revised target price of Rs 650 (Rs 825 earlier).' Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.
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