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Tech Mahindra Ltd. Stock Analysis

Large Cap
Evaluated by 6910 users | BSE: 532755 | NSE: TECHM |
IT - Software
Tech Mahindra incorporated in 1986 offers Information Technology (IT) services and solution to telecommunications sector across the world.Tech Mahindra is part of the $12.5 billion Mahindra Group, in partnership with British Telecommunications plc (BT), one of the world’s leading...
1. Right Stock
Very Good
2. Right Price
3. Right Time

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Tech Mahindra Ltd. has performed well in majority of the past ten years indicating its past ten year financial track record is very good
Value Creation
Value Creation Index Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 13.67%23.05%23.85%38.89%24.85%19.74%14.35%14.96%17.91%15.45%
Value Creation Index -0.140.810.872.050.950.550.120.170.400.21
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 5,1405,4906,87318,83122,62126,49429,14130,77334,74236,868
Y-o-Y Gr. Rt.-6.8%25.2%174%20.1%17.1%10%5.6%12.9%6.1%
Adjusted EPS (Rs.) 11.5120.6626.7333.9728.9833.4628.934.6946.3642.68
Y-o-Y Gr. Rt.-79.5%29.4%27.1%-14.7%15.5%-13.6%20%33.6%-7.9%
Book Value per Share (Rs.) 66.3678.49104.0995.95123.2161.16181.06208.6223.98245.32
Adjusted Net Profit 5801,0541,3703,1722,7852,9152,5363,0644,1133,720
Net Op. Cash Flow (Rs. Cr.) 4647128551,5962,4483,1374,0713,5544,4324,358
Debt to Cash Flow from Ops 2.641.581.610.230.290.350.340.670.450.57
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Tech Mahindra Ltd. should be analysed on a Consolidated basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 24.5%10.3%8.2%6.1%
Adjusted EPS 15.7%8.1%13.9%-7.9%
Book Value per Share 15.614.810.79.5
Share Price 21% 8.6% 19.1% 10.1%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 18.5928.4728.9143.4325.9920.7715.1516.2419.7816.7
Operating Profit Margin (%) 19.516.4920.6921.3117.8215.613.8415.2818.2415.53
Net Profit Margin (%) 13.269.1112.9917.0212.4511.128.849.91129.74
Debt to Equity 0.370.280.260.040.060.080.090.130.10.12
Working Capital Days 144143135105147152157163157170
Cash Conversion Cycle 27443223302729343025
Corporate Governance What do we look at?
Corporate Governance
Board Credentials
Promoter's holding
Transparency
Integrity
Entity Percentage Holding
Promoters 35.82%
Institutions 52.36%
Non-Institutions 11.82%
Others 0.01%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Tech Mahindra Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that Tech Mahindra Ltd. is a good quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Tech Mahindra Ltd.'s performance infers:

Tech Mahindra Ltd. earnings have grown by 8.1%, whereas share price has appreciated 8.6% CAGR over the past five years, indicating the company's share price is likely overvalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Tech Mahindra Ltd. share prices over the last 10 years. Here is what we found out:

Tech Mahindra Ltd. share price has appreciated 16.2% annually over the past ten years.

Tech Mahindra incorporated in 1986 offers Information Technology (IT) services and solution to telecommunications sector across the world.

Tech Mahindra is part of the $12.5 billion Mahindra Group, in partnership with British Telecommunications plc (BT), one of the world’s leading communications service providers. Focused primarily on the telecommunications industry, Tech Mahindra is a leading global systems integrator and business transformation consulting organization. Tech

Tech Mahindra incorporated in 1986 offers Information Technology (IT) services and solution to telecommunications sector across the world.

Tech Mahindra is part of the $12.5 billion Mahindra Group, in partnership with British Telecommunications plc (BT), one of the world’s leading communications service providers. Focused primarily on the telecommunications industry, Tech Mahindra is a leading global systems integrator and business transformation consulting organization. Tech Mahindra has recently expanded its IT portfolio by acquiring the leading global business and information technology services company, Mahindra Satyam (earlier known as Satyam Computer Services).

Tech Mahindra’s capabilities spread across a broad spectrum, including Business Tech Mahindra has successfully implemented more than 16 Greenfield Operations globally and has over 128 active customer engagements mostly in the Telecom sector. The company has been involved in about 8 transformation programs of incumbent telecom operators.

Its client list includes big companies like British Telecom (BT), AT&T, Motorola and Alcatel-Lucent are among others. BT is largest client that contributes 60% to its revenues.

The company has received various certifications such as ISO 9001:2000, ISO/IEC 20000-1:2005, ISO/IEC 27001:2005, SEI-CMMI Level 5 P-CMM Level 5 and SSE-CMM Level 3.

Services

IT Services- It offers various services such as solution integration, application development and management, consulting, application management, infrastructure management, and revenue management services.

Research and Development services- It provides technological solutions such as software development, testing, hardware development, network offering etc to leading telecom equipment manufacturers across the globe.

BPO- It also provides outsourcing services in the areas finance and accounting, HR Outsourcing, order management, contract management, inventory management, are among others.

Awards

It was Asia’s Best Performing Companies 2008 at Business Week award.

Tech Mahindra received Growth Excellence Award 2008 by Frost & Sullivan.

It was recognized as winner of the 'IT People Employer of the Year Award' at IT People Awards.

It was acknowledged as 6th largest Software Services Company in India by NASSCOM in 2008.

The company is recognized as winner of the 2011 Microsoft Communications Sector Partner of the Year Award.

The company is declared as winner of 2010 and 2011 AT&T Supplier Award for outstanding performance & service to AT&T and its affiliates.

Milestones

2002
•MBT assessed at Level 5 of SEI CMM by KPMG

•MBT assessed at Level 5 of SEI CMM by KPMG
•MBT incorporates MBT Software Technologies Pte. Limited, Singapore
•Satyam BPO launched in Hyderabad

2005

•Certified BS 7799-2:2002 (Information Security Management Framework) by RWTUV now known as TUV Nord
•Acquired Axes Technologies (India) Private Limited, including its US and Singapore subsidiaries
•Assessed at Level 5 of SEI CMMI by KPMG
•Largest global development center outside India (in Melbourne) begins operation
•Citisoft and Knowledge Dynamics acquired

2006

•Name changed to Tech Mahindra Limited
•Assessed at Level 5 of SEI People-CMM (P-CMM) by QAI India
•Raised Rs 4.65 billion ($100 million) from a hugely successful IPO to build a new facility in Pune, to house about 9,000 staff
•Formed a JV with Motorola Inc. under the name CanvasM
•Set up the first "Global Innovation Hub" in Singapore
•Set up operations in Guangzhou, China

2007

•Launched the Tech Mahindra Foundation to address the needs of the underprivileged in our society, especially children
•Acquired iPolicy Networks Private Limited
•Announced the Official IT Services Provider for the FIFA World Cup 2010TM
•Opens Global Development Center (GDC) in Malaysia
•First Asian company to feature in the "Training" Magazine's list of Top 125 companies for learning

2009

•Tech Mahindra acquires a controlling stake in Satyam
•Satyam gets rebranded as 'Mahindra Satyam'

2010

•Delivered FIFA World Cup 2010TM
•AT&T 2010 Supplier Award for outstanding performance & service to AT&T and its affiliates
•Expands footprint in Latin America

2011

•Inaugurated Saab India Technology Center
•AT&T 2011 Supplier Award for the 2nd year consecutively

2012

•Merger of Tech Mahindra and Mahindra Satyam announced
•Acquisition of Hutchison Global Services
•Acquisition of Comviva Technologies Limited

2013

•Tech Mahindra Positioned in Gartner's 'Leaders' Quadrant for IT Services for Communications Service Providers
•Mahindra Group forays into Engineering Education with Ecole Centrale Paris
•Tech Mahindra-Mahindra Satyam merger finally consummated
•Mahindra Satyam acquires majority stake in Complex IT

Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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