Re: {LONGTERMINVESTORS} Tech Mahindra - Thread
RAJESH DESAI
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Dear All,
Forwarding you the Company Update on Tech Mahindra with an Accumulaterecommendation and a Target Price of `900 (12 months).
Tech Mahindra acquires Hutchison Global Services
Tech Mahindra has announced acquisition of 100% stake in Hutchison Global Services (HGS) for US$87.1mn, payable upfront. The company will fund this through debt and internal cash. The acquired company, HGS, had US$20mn of cash in its books, so on a net basis the cost of acquisitions for Tech Mahindra comes out to be US$67.1mn. As part of the deal, clients of HGS have committed to procure services worth US$845mn over a five-year period, and have agreed to HGS being their exclusive provider of certain agreed services in India. This deal will start adding to Tech Mahindra’s sales and earnings from the coming quarter which implies additional revenues of ~US$12mn in 2QFY2013 and ~US$40m per quarter from 3QFY2013 for Tech Mahindra. Tech Mahindra’s management indicated that this deal will be EPS accretive for the company. This deal will give a boost to Tech Mahindra’s revenue when the company is facing problems due to drop of sales from BT. But this deal will be operating margin dilutive for Tech Mahindra as BPO business has lower margins than other IT services. We have revised our USD revenue upwards for FY2013 and FY2014 by 6.5% and 14% respectively while the EBITDA margin forecast is reduced by 40bp and 56bp respectively. This deal will be EPS accretive for Tech Mahindra. The stock is currently trading at 8.1x FY2014E EPS. Taking into account the new share count of 23.08cr (post merger of Tech Mahindra and Mahindra Satyam), the consolidated EPS comes in at `85.8. We value Tech Mahindra at 10.5x FY2014E EPS and recommend an Accumulate rating on the stock with a target price of `900.
Kindly click on the following link to view the Report.
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CA. Rajesh Desai
RAJESH DESAI
MELBOURNE: Mahindra Satyam will provide IT services to Australian carrier Jetstar, the budget airliner of Qantas, under a new contractual arrangement.
Jetstar will receive services such as desktop support services from the Indian provider, according to Australian Financial Review report.
It said Jetstar would be receiving subcontracted work from Mahindra Satyam through an existing deal with Melbourne- based Lincom Solutions as it was looking to expand into new markets in Hong Kong and Japan.
Jetstar chief information officer Stephen Tame was quoted as saying that Lincom had selected the Indian provider on his behalf.
He said that after working on all sourcing arrangements for the Jetstar Group over the past few years and delivering business returns in agility, scalability and cost, "we have started looking at some of our key suppliers".
Tame said Jetstar was keen to understand the "sourcing strategies, sourcing mix and returns" of suppliers and help them "adopt sourcing strategies of their own to deliver additional agility, scalability and cost returns into their business", with the benefits of this ultimately flowing "into our business".
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CA Mihir Desai
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CA. Rajesh Desai
RAJESH DESAI
Infy & TCS are not the peers pf this co. Giving extract from Enams report posted by me.
Raise target multiple, maintain HOLD (6% upside): Our consolidated EPS for FY13E/ FY14E undergo marginal revision. At CMP of Rs 966, the stock trades at 11x FY13E EPS of Rs 86 and 10x FY14E EPS of Rs 98, which is at 20-25% discount to current valuation of HCL Tech (its most comparable peer) – 14x FY13E and 12x FY14E. Given consistent improvement in client mining and margin surprise by TechM-Satyam combine, we believe valuation discount to HCLT should narrow. Raise FY14 multiple to 10.5x from 9.5x, leading to revised TP of Rs 1,026 (Rs 927 earlier).--On Wed, Nov 7, 2012 at 11:09 AM, Kaustubh Agashe <kaustub...@gmail.com> wrote:
Why Tech M P/E multiple is so low? Comparable with average of mid-size IT companies...and not with large/ leading IT companies.
It's trading at 8-9 or 10...whereas for Infy, TCS it is usually 15+...or even 20+.On Tue, Nov 6, 2012 at 3:02 PM, RAJESH DESAI <stock...@gmail.com> wrote:The company has reported 46.57% rise in its net profit at Rs 160.13 crore for the quarter as compared to Rs 109.25 crore for the same quarter in the previous year. Total income of the company has increased by 7.68% at Rs 1452.41 crore for quarter under review as compared to Rs 1348.86 crore for the quarter ended September 30, 2011.
On consolidated basis, the company has reported 23.22% rise in its net profit at Rs 296.26 crore for the quarter ended September 30, 2012 as compared to Rs 240.43 crore for the same quarter in the previous year. Total income of the company has increased by 9.58% at Rs 1567.42 crore for quarter under review as compared to Rs 1430.40 crore for the quarter ended September 30, 2011.
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CA. Rajesh Desai
CA. Rajesh Desai
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CA. Rajesh Desai