Tech Mahindra Q3 result preview: PAT, revenue to fall YoY; margin outlook, CME growth key monitorable
Q3 results today: Bajaj Auto, Tech Mahindra, Tata Steel, others to announce Q3 earnings Motilal Oswal said Tech Mahindra's revenue might decline 7 per cent year-on-year (YoY) in the Indian rupee terms, following the dip in Q2 as CME and enterprise remain under pressure due to seasonality. The brokerage firm expects a 1.1 per cent QoQ decline in constant currency (CC) revenue for Q3FY24. Adjusted PAT, as per the brokerage firm, may drop 39.3 per cent YoY and 19.5 per cent quarter-on-quarter (QoQ).
Deal wins are likely to be muted due to fewer working days. The brokerage firm expects deal TCV (total contract value) at $300-500 million in Q36FY24. Besides, margins are likely to be stable and we do not see any meaningful improvement from the Q2FY24 level.
The absence of growth and continued investments are likely to keep the margin under pressure, the brokerage firm said. Also Read: Bajaj Auto Q3 Results Preview: Net profit, revenue may rise over 30% YoY led by volume growth, rich product mix Phillip Capital expects Tech Mahindra to report a 6.8 per cent YoY fall in revenue for Q3FY24 while PAT may see a sharp decline of 49.1 per cent YoY. The brokerage firm expects Tech Mahindra's CC revenue to decline by 0.9 per cent QoQ due to continued weakness in its communications vertical and weak discretionary spending impacting growth in the enterprise vertical.
The estimates of Phillip Capital show Tech Mahindra's EBIT may plunge 53.7 per cent YoY and its EBIT margin may fall by 600 bps YoY in Q3. New strategic initiatives by CEO and MD Mohit Joshi, Deal TCVs and pipeline, margins levers, outlook on growth and margins for FY24, 5G commentary are the key monitorables, according to Phillip Capital. (Exciting news! Mint is now on
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