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Prabhudas Lilladher Report
Tech Mahindra Ltd. reported strong growth of 4.1% QoQ U.S. dollar much above our and street estimates (our estimate: 2.2%, consensus: 2.4%).
Growth was led by enterprise segment and communications in seasonally weak quarter grew up 3.2% QoQ U.S. dollar, registering highest ever Q1 growth in last five years.
Ebit margins came at 15.2% above our and consensus estimates (our: 14%, consensus:14.4%).
Management is confident on maintaining Ebit margins above 15% despite headwinds from supply side crunch – higher attrition (17%, up 400 bps QoQ) coupled with all-time high utilisation (88% in Q1 FY22) due to margin levers such as-
general and administrative costs centralisation for portfolio companies
operational efficiency and automation,
pyramid optimisation and
revenue growth leverage.
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