CLSA sees a 15 percent margin feasible for Tech Mahindra; retains ‘buy’ call – News 24-7 Live News 24-7 Live
CLSA sees a 15 percent margin feasible for Tech Mahindra; retains ‘buy’ call

CLSA sees a 15 percent margin feasible for Tech Mahindra; retains ‘buy’ call

  • Brokerage firm CLSA is bullish on Tech Mahindra as it sees a 15 percent margin feasible for the IT major.
  • CLSA adds that the potential for capital return and upside from 5G makes the risk-reward attractive.
  • The brokerage maintains a ‘buy’ call on the stock with a target at Rs 1,180 per share.

Brokerage firm CLSA is bullish on Tech Mahindra as it sees a 15 percent margin feasible for the IT major. The brokerage maintains a ‘buy’ call on the stock with a target at Rs 1,180 per share.“The company also shows confidence to hold the FY22 earnings before interest and taxes (EBIT) margin at 15 percent despite headwinds from an impending salary hike, resumed hiring, and likely transition costs for large deals,” stated the report.

CLSA noted that its analysis indicates that this is feasible if attrition costs remain in control.It also sees upside risk to FY22 earnings per share estimates that are built on a conservative margin outlook. The potential for capital return and upside from 5G makes risk-reward attractive for the company, added the brokerage.It further stated that the company sees a pick-up in deal momentum that could shift its quarterly order-book significantly.

News Source: CNBC TV 18

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