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TechM Q3 results today: Analysts on what to expect

HDFC Securities is expecting the IT major to report 2.8 per cent QoQ rise in net profit at Rs 1,094 crore.

ETMarkets.com|
Updated: Feb 05, 2019, 04.04 PM IST
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The growth is expected to be led by recovery in core telecom (4 per cent QoQ).
NEW DELHI: Tech Mahindra (TechM) is scheduled to report its third quarter earnings on Tuesday. The IT major is expected to report 2.5-2.8 per cent sequential rise in revenues in constant currency (CC) terms.

Updates on LCC (network services) and growth recovery in the enterprise business (healthcare), TCV (total contract value) wins in telecom vertical and scope of work related to 5G roll-out will be keenly followed.

HDFC Securities is expecting the IT major to report 2.8 per cent QoQ rise in net profit at Rs 1,094 crore, led by margin expansion and currency offset by lower forex gains.

Dollar revenues are seen rising 2.1 per cent to $1.24 billion on sequential basis. Revenue growth in constant currency (CC) terms is seen at 2.8 per cent QoQ.

The growth is expected to be led by recovery in core telecom (4 per cent QoQ).

“Enterprise growth will be muted, led by furloughs. Ebitda margin may expand by 29 bps QoQ to 19 per cent on account of currency tailwind offset by furloughs,” HDFC Securities said.

Motilal Oswal Securities expects CC revenue growth of 2.5 per cent QoQ but expects a negative cross-currency impact of 50 bps on dollar revenue growth (seen at 2 per cent QoQ).

“Growth will be driven by the telecom segment (4.5 per cent QoQ) while enterprise business will grow at modest 1 per cent due to furloughs and weakness in healthcare segment. Margins are expected to expand 30 bps QoQ mainly due to rupee depreciation,” it said, adding that commentary on growth in enterprise business, and performance of subsidiaries, will be keenly watched.

The scrip closed 0.08 per cent higher at 750 on BSE.
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