Tech Mahindra Share Price

Tech Mahindra Limited fundamental analysis

This article will examine Tech Mahindra Limited from the ground up in order to understand its business model and industry and decide whether it would be a suitable investment for you.

Tech Mahindra Limited

Tech Mahindra is an Indian multinational information technology (IT) services and consulting company founded by Anand Mahindra. It is a part of the Mahindra Group and has its headquarters in Pune, Maharashtra, with a registered office in Mumbai.

The company was founded in 1986 as a joint venture with British Telecom, initially named Mahindra British Telecom (MBT), and later renamed as Tech Mahindra.

Tech Mahindra provides digital solutions and platforms for delivering meaningful results, improving customer experience, and transforming industries among others. They operate across different sectors namely banking, insurance, telecommunications, media, entertainment, retail, etc.

Tech Mahindra employs over 146000 employees across 90 countries by the year 2024. It has been regarded as one of India’s biggest tech firms renowned for its innovative and customer-centric IT solutions and services.

Is the IT and consulting sector a goldmine investment?

The IT and Consulting sector in India has shown significant growth and resilience, making it a potentially good investment.

The sector has been flourishing thanks to strong governmental support, a good English-based educational system, a large talent pool, and an open market. Accounting for 7.5% of the GDP in the financial year 2023, the IT-BPM has played a remarkable role in India’s socio-economic growth.

Moreover, India made up more than 19% of the global IT spending. The industry has created millions of jobs in the country and is recognised worldwide for its high-quality IT outsourcing services.

In terms of specific companies, Tech Mahindra stands out as a promising investment opportunity. With its strong market capitalisation and impressive revenue growth, Tech Mahindra offers a stable and promising outlook for investors, supported by its solid return on equity, favorable operating cash flow, and levered free cash flow.

Who are Tech Mahindra’s competitors in the IT and consulting sector?

Tech Mahindra has several competitors in the IT and Consulting sector. Some of the main ones include:

• Wipro
• HCLTech
• Infosys
• Tata Consultancy Services (TCS)
• Accenture
• HCLTech

History of Tech Mahindra Ltd.

Tech Mahindra Limited is an Indian multinational information technology services and consulting company that is part of the Mahindra Group. Here’s a brief history of the company:

• Incorporation: Tech Mahindra Limited was incorporated on 24th October 1986 as a joint venture between Mahindra & Mahindra and British Telecom. Initially named Mahindra British Telecom (MBT), it was later renamed as Tech Mahindra.
• Product range: Tech Mahindra offers a wide range of services including telecom services, consulting, application outsourcing, infrastructure outsourcing, engineering services, BPO, platform solutions, and mobile value-added services. They also offer products and solutions like netOps.ai, MobiLytix, Epselon, Entellio, Blue-marble, InfoWise, Yantra, Kornea, Populii, AceFin, and AftEAZE.
• Infrastructure: Tech Mahindra helps businesses with all their IT infrastructure needs. They provide support for various technologies that help companies transition into digital operations. They use advanced tools like AI and analytics to make sure businesses get the most out of their IT investments and infrastructure.
• Certifications: Tech Mahindra has several certifications, including Certified Implementation Specialist in Customer Service Management and Field Service Management, and Suite Certification in CSM Professional.
• Awards and recognition: Tech Mahindra has been recognsed with numerous awards and accolades. They were recognised amongst the ‘Best Organisations for Women 2024’ by ET NOW, and among the 'Top 100 Corporate Startup Stars (CSS) in 2023 by ICC (International Chamber of Commerce) and Mind the Bridge.

Company profile of Tech Mahindra Ltd.

Pros:

• Financial performance: Tech Mahindra’s Q4 FY24 revenue was at Rs 12871 crores, up 6.2% QoQ. The company’s EBIT margin improved by 5.4%.
• Low volatility: Tech Mahindra has a 6-month beta of 0.1656, indicating a relatively low volatility compared to the market.
• Positive returns: Tech Mahindra closed at Rs 1340.35 with a 6.01% one-month return and a weekly return of 7.63%.

Cons:

• EBITDA decrease: The EBITDA for Q4 FY24 was USD 169 million, down 31.1% YoY. A decrease in EBITDA might indicate reduced profitability.
• Profit After Tax (PAT) decrease: The PAT for Q4 FY24 was USD 79 million, up 29.5% QoQ but down 41.5% YoY. A decrease in PAT could be a sign of decreased net earnings.

The finances

Here’s a summary of Tech Mahindra Limited’s financial information as of June 2024:

Source: https://www.screener.in/company/TECHM/consolidated/

Shareholding pattern of Tech Mahindra Ltd.

As of the latest quarter of 2024, the shareholding pattern of Tech Mahindra Ltd. is as follows:

• Promoters: Hold 35.1%.
• Foreign Institutional Investors (FII): 24.2%
• Domestic Institutional Investors (DII): 29.7%
• Public: 11.1%

Peer multiple comparison

Let’s compare Tech Mahindra Limited with its peers that have complete data available. Here’s a concise table: