Tech Mahindra Q1 result preview: PAT likely to decline 1.6%; revenue to slip 2%

Ahead of the results, shares of Tech Mahindra were trading nearly half a per cent lower at Rs 1,156.6 apiece on BSE as of 1:45 PM.

The dollar revenue of Tech Mahindra is likely at Rs 164.1 crore against Rs 166.8 crore, down 1.6 per cent QoQ, image- Reuters

Tech Mahindra is expected to post its June quarter numbers (Q1FY24) on Wednesday, July 26. Ahead of the results, shares of Tech Mahindra were trading nearly half a per cent lower at Rs 1,156.6 apiece on BSE as of 1:45 PM. The stock was trading in the red for the third consecutive session.

How is Tech Mahindra expected to perform in the first quarter?

Zee Business Research expects the company to post marginally weak results for the June quarter because of weakness in the Communication Media and Entertainment (CME) vertical, which is attributed to Comviva seasonality and overall weakness in CME.

The profit after tax (PAT) is expected to decline 1.6 per cent to Rs 1,100 crore against Rs 1,118 crore logged in the March 2023 quarter. The IT company is likely to report revenue of Rs 13,450 crore against 13,718 crore quarter-on-quarter (QoQ), down 2 per cent.

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Further, the earnings before interest and taxes, or EBIT, are expected to come in at Rs 1,390 crore against Rs 1,317 crore, up 5.5 per cent QoQ. The adjusted EBIT may come in at Rs 1,390 crore against Rs 1,529 crore, down 9.1 per cent a quarter ago. The company's margin is expected to be 10.3 per cent against 9.6 per cent in the fourth quarter.

The dollar revenue of the company is likely at Rs 164.1 crore against Rs 166.8 crore, down 1.6 per cent QoQ.

According to the research, Constant Currency (CC) revenue is expected to decline by 2 per cent. The slowdown in banking, financial services, and insurance (BFSI) and the HI-TECH vertical may also impact earnings.

Investors should keep an eye on CEO transition and new strategic initiatives comments, deal TCVs and pipeline, margin levers and outlook on growth and margins for FY24, and 5G commentary.