BSE:532755

Stock Analysis Report

Executive Summary

Tech Mahindra Limited provides information technology (IT) services and solutions in the Americas, Europe, India, and internationally.


Snowflake Analysis

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Tech Mahindra's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 532755's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-1.5%

532755

-7.9%

IN IT

-3.6%

IN Market


1 Year Return

-33.9%

532755

-23.3%

IN IT

-32.1%

IN Market

Return vs Industry: 532755 underperformed the Indian IT industry which returned -23.3% over the past year.

Return vs Market: 532755 underperformed the Indian Market which returned -32.1% over the past year.


Shareholder returns

532755IndustryMarket
7 Day-1.5%-7.9%-3.6%
30 Day-29.7%-23.0%-25.1%
90 Day-33.0%-25.5%-30.2%
1 Year-31.5%-33.9%-20.9%-23.3%-30.7%-32.1%
3 Year27.3%17.5%26.9%19.1%-19.8%-24.1%
5 Year-12.0%-21.7%16.9%5.6%-10.4%-15.2%

Price Volatility Vs. Market

How volatile is Tech Mahindra's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Tech Mahindra undervalued compared to its fair value and its price relative to the market?

21.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 532755 (₹520.65) is trading below our estimate of fair value (₹659.94)

Significantly Below Fair Value: 532755 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 532755 is poor value based on its PE Ratio (10.5x) compared to the IT industry average (7.3x).

PE vs Market: 532755 is poor value based on its PE Ratio (10.5x) compared to the Indian market (9.4x).


Price to Earnings Growth Ratio

PEG Ratio: 532755 is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: 532755 is overvalued based on its PB Ratio (2.1x) compared to the IN IT industry average (0.6x).


Next Steps

Future Growth

How is Tech Mahindra forecast to perform in the next 1 to 3 years based on estimates from 35 analysts?

9.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 532755's forecast earnings growth (9.8% per year) is above the savings rate (6.5%).

Earnings vs Market: 532755's earnings (9.8% per year) are forecast to grow slower than the Indian market (19.2% per year).

High Growth Earnings: 532755's earnings are forecast to grow, but not significantly.

Revenue vs Market: 532755's revenue (8.6% per year) is forecast to grow slower than the Indian market (8.8% per year).

High Growth Revenue: 532755's revenue (8.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 532755's Return on Equity is forecast to be high in 3 years time (20.1%)


Next Steps

Past Performance

How has Tech Mahindra performed over the past 5 years?

11.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 532755 has high quality earnings.

Growing Profit Margin: 532755's current net profit margins (12%) are lower than last year (12.9%).


Past Earnings Growth Analysis

Earnings Trend: 532755's earnings have grown by 11.7% per year over the past 5 years.

Accelerating Growth: 532755's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 532755 had negative earnings growth (-0.6%) over the past year, making it difficult to compare to the IT industry average (7.2%).


Return on Equity

High ROE: 532755's Return on Equity (19.1%) is considered low.


Next Steps

Financial Health

How is Tech Mahindra's financial position?


Financial Position Analysis

Short Term Liabilities: 532755's short term assets (₹223.3B) exceed its short term liabilities (₹98.7B).

Long Term Liabilities: 532755's short term assets (₹223.3B) exceed its long term liabilities (₹32.6B).


Debt to Equity History and Analysis

Debt Level: 532755's debt to equity ratio (9.2%) is considered satisfactory.

Reducing Debt: 532755's debt to equity ratio has increased from 0.3% to 9.2% over the past 5 years.

Debt Coverage: 532755's debt is well covered by operating cash flow (206.9%).

Interest Coverage: 532755 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 532755 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 532755's debt is covered by short term assets (assets are 10.8x debt).


Next Steps

Dividend

What is Tech Mahindra's current dividend yield, its reliability and sustainability?

3.84%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 532755's dividend (3.84%) is higher than the bottom 25% of dividend payers in the Indian market (0.96%).

High Dividend: 532755's dividend (3.84%) is low compared to the top 25% of dividend payers in the Indian market (4.06%).


Stability and Growth of Payments

Stable Dividend: 532755's dividends per share have been stable in the past 10 years.

Growing Dividend: 532755's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.1%), 532755's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 532755's dividends in 3 years are forecast to be well covered by earnings (37.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

CP Gurnani (60yo)

no data

Tenure

₹224,990,000

Compensation

Mr. Chander Prakash Gurnani, also known as CP, serves as Non-Executive Non-Independent Director of Mahindra & Mahindra Limited since April 1, 2020. Mr. Gurnani has been the Chief Executive Officer at Tech  ...


CEO Compensation Analysis

Compensation vs Market: CP's total compensation ($USD2.95M) is above average for companies of similar size in the Indian market ($USD1.07M).

Compensation vs Earnings: CP's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Chander Gurnani
MD, CEO & Directorno data₹224.99m0.79% 3.6b
Manoj Bhat
Chief Financial Officer1.83yrs₹11.63m0.0023% 10.5m
Anil Khatri
Company Secretary & Compliance Officer3yrs₹7.18m0.00079% 3.6m
L. Ravichandran
Chief Operating Officer4.5yrsno data0.011% 48.1m
Atul Kunwar
President & CTO4.33yrsno datano data
Kaustubh Vaidya
Head of Investor Relationsno datano datano data
Vineet Vij
General Counsel0.92yrno datano data
Tuhina Pandey
Head of Corporate Communications & Public Affairsno datano datano data
Harshvendra Soin
Chief People Officer1.75yrsno data0.00017% 770.2k
Sujit Baksi
President of Corporate Affairs & Business Head APAC1.25yrsno data0.034% 155.7m

1.8yrs

Average Tenure

60yo

Average Age

Experienced Management: 532755's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Chander Gurnani
MD, CEO & Directorno data₹224.99m0.79% 3.6b
Anand Mahindra
Non-Executive Chairmanno datano data0.022% 98.2m
Haigreve Khaitan
Independent Director0.67yrno datano data
Thothala Manoharan
Independent Director6.75yrs₹7.82m0.0034% 15.6m
Shikha Sharma
Independent Director0.67yrno datano data
Vankipuram Parthasarathy
Non-Executive Director4.67yrs₹6.57mno data
Mukti Khaire
Independent Director1yrno datano data
M. Rao
Independent Director6.75yrs₹50.66m0.00023% 1.0m
Meleveetil Damodaran
Independent Directorno data₹7.26m0.0085% 38.4m
Anish Shah
Non-Executive Director0.58yrno datano data

2.8yrs

Average Tenure

60.5yo

Average Age

Experienced Board: 532755's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 532755 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Tech Mahindra Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Tech Mahindra Limited
  • Ticker: 532755
  • Exchange: BSE
  • Founded: 1986
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: ₹453.034b
  • Shares outstanding: 869.71m
  • Website: https://www.techmahindra.com

Number of Employees


Location

  • Tech Mahindra Limited
  • Plot No. 1, Phase III
  • Rajiv Gandhi Infotech Park
  • Pune
  • Maharashtra
  • 411057
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
532755BSE (Mumbai Stock Exchange)YesEquity SharesININRAug 2006
TECHMNSEI (National Stock Exchange of India)YesEquity SharesININRAug 2006

Biography

Tech Mahindra Limited provides information technology (IT) services and solutions in the Americas, Europe, India, and internationally. The company operates through IT Business and Business Processing Outsourcing (BPO) segments. It offers IT outsourcing, consulting, next generation, application outsourcing, network, infrastructure management, integrated engineering, BPO, platform, and mobile value added services. The company also provides consulting-led integrated portfolio services to telecom equipment manufacturers, telecom service providers, IT infrastructure service providers, and business process outsourcing service providers; and enterprise solutions services of IT and IT-enabled services. In addition, it offers IT services, such as IT enabled services, application development and maintenance, consulting and enterprise business solutions, extended engineering solutions, and infrastructure management services. Further, the company provides big data, cloud computing, content delivery network, device testing and certification, digital enterprise, green and sustainability, long term evolution, Internet of Things, supply chain, smart grid and city, and spend management solutions. Additionally, it offers IT infrastructure cloud services; customer experience solutions; enterprise architecture services; enterprise resource planning, data and analytics, and other enterprise platforms; and DevOps solutions. The company also provides integrated engineering solutions; infrastructure management, mobility, networking, performance engineering, product life cycle management, and testing services; and enterprise security and risk management services. It serves insurance, banking and financial, manufacturing, telecommunication, transportation and logistics, engineering, entertainment, and public and government sectors; and retail and consumer goods industries. It has strategic partnership with Rackspace US, Inc. The company was founded in 1986 and is based in Pune, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/06 13:03
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.