Tech Mahindra Q1 2023 Earnings: Stay tuned for the live earnings call and real-time transcript

IT giant Tech Mahindra is likely to report its June quarter results today. The result is mostly bound to be subdued because of weakness in its CME (communications, media and entertainment) vertical. The IT firm’s revenue may see soft growth but profit after tax (PAT) may dip on a year-on-year (YoY) basis. Some brokerage firms expect Tech Mahindra’s constant currency (CC) revenue to decline in quarter-on-quarter (QoQ) terms.

Tune in to listen to Tech Mahindra’s Q1 earnings call live and check real-time transcript

While the numbers will show how the company performed in the last quarter, investors would focus on the near-term growth outlook, deal pipelines and outlook on its business segments.

Brokerage firm Phillip Capital expects Tech Mahindra’s revenue to rise 6.3 per cent YoY, but PAT may see a 2.6 per cent YoY fall. “Tech Mahindra’s CC revenue to decline by 1.8 per cent QoQ led mainly by its CME vertical due to Comviva seasonality and overall weakness in CME. Enterprise also is expected to decline marginally due to weakness in BFSI and Hitech,” said Phillip Capital. Apart from the numbers, Phillip Capital believes CEO transition, new strategic initiatives comments, deal TCV (total contract value) and pipeline, margins levers, outlook on growth and margins for FY24 and commentary on 5G will be key things to focus on.

Kotak institutional securities stated that – “We expect investors to focus on—(1) near-term growth outlook given client-specific headwinds and deceleration in TCV growth, (2) turnaround strategy that may be articulated by the CEO-designate, (3) timing of divestments of low-margin businesses that will aid margins but adversely impact revenue growth, (4) outlook for margins in FY2024 noting the current level of margins is lower than normalized levels and can be a low-hanging fruit, (5) outlook for vulnerable segments such as XDS, ERD and network services, which have higher exposure to discretionary spending, (6) health of deal pipeline and positioning in cost take-out deals, (7) any revenue leakage in existing accounts and positioning in vendor consolidation events and (8) outlook for revenue growth in top telecom clients,” said Kotak.