InCred Equities - Tech Mahindra

	Mar-24A	Mar-25F	Mar-26F	Mar-27F
Revenue (Rsm)	519,955	535,604	579,733	623,774
Operating EBITDA (Rsm)	49,646	73,750	91,018	107,289
Net Profit (Rsm)	23,579	45,947	57,462	69,348
Core EPS (Rs)	31.8	52.0	65.0	78.5
Core EPS Growth	(44.4%)	63.3%	25.1%	20.7%
FD Core P/E (x)	63.77	32.69	26.14	21.66
DPS (Rs)	40.0	41.6	52.0	62.8
Dividend Yield	2.36%	2.45%	3.06%	3.69%
EV/EBITDA (x)	29.31	19.48	15.62	13.08
P/FCFE (x)	38.65	34.49	27.42	22.58
Net Gearing	(19.6%)	(25.0%)	(29.2%)	(33.8%)
P/BV (x)	5.63	5.44	5.23	4.99
ROE	10.3%	16.9%	20.4%	23.6%
% Change In Core EPS Estimates
InCred Research/Consensus EPS (x)

(Rs mn)	Mar-24A	Mar-25F	Mar-26F	Mar-27F
Total Net Revenues	519,955	535,604	579,733	623,774
Gross Profit	128,809	150,026	166,963	187,132
Operating EBITDA	49,646	73,750	91,018	107,289
Depreciation And Amortisation	(18,171)	(18,446)	(18,841)	(19,961)
Operating EBIT	31,475	55,304	72,177	87,328
Financial Income/(Expense)	5,668	8,238	4,239	5,203
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)	(421)	(533)	580	936
Profit Before Tax (pre-EI)	36,722	63,009	76,996	93,467
Exceptional Items
Pre-tax Profit	36,722	63,009	76,996	93,467
Taxation	(8,276)	(16,777)	(19,249)	(23,834)
Exceptional Income - post-tax	(4,582)
Profit After Tax	23,864	46,232	57,747	69,633
Minority Interests	(285)	(285)	(285)	(285)
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit	23,579	45,947	57,462	69,348
Recurring Net Profit	28,161	45,947	57,462	69,348
Fully Diluted Recurring Net Profit	28,161	45,947	57,462	69,348

(Rs mn)	Mar-24A	Mar-25F	Mar-26F	Mar-27F
EBITDA	49,646	73,750	91,018	107,289
Cash Flow from Invt. & Assoc.
Change In Working Capital	12,987	(2,576)	(6,487)	(6,474)
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense	570	570	570	570
Other Operating Cashflow
Net Interest (Paid)/Received	(3,922)	(3,385)	(2,370)	(1,659)
Tax Paid	(12,469)	(16,777)	(19,249)	(23,834)
Cashflow From Operations	46,812	51,582	63,483	75,892
Capex	(7,911)	(8,034)	(8,696)	(9,357)
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow	(5,226)	11,090	7,189	7,797
Cash Flow From Investing	(13,137)	3,056	(1,507)	(1,559)
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid	(39,170)	(36,757)	(45,970)	(55,478)
Preferred Dividends
Other Financing Cashflow	(8,502)	(3,385)	(2,370)	(1,659)
Cash Flow From Financing	(47,672)	(40,142)	(48,339)	(57,137)
Total Cash Generated	(13,997)	14,496	13,636	17,196
Free Cashflow To Equity	38,901	43,548	54,787	66,536
Free Cashflow To Firm	37,597	58,023	64,345	75,992

(Rs mn)	Mar-24A	Mar-25F	Mar-26F	Mar-27F
Total Cash And Equivalents	75,149	92,175	107,325	125,325
Total Debtors	114,011	117,833	127,541	137,230
Inventories	375	375	375	375
Total Other Current Assets	44,718	44,718	44,718	44,718
Total Current Assets	234,253	255,100	279,959	307,648
Fixed Assets	36,193	25,781	15,636	5,032
Total Investments	8,266	8,266	8,266	8,266
Intangible Assets	103,456	103,456	103,456	103,456
Total Other Non-Current Assets	52,068	52,068	52,068	52,068
Total Non-current Assets	199,983	189,571	179,426	168,822
Short-term Debt	14,285	14,285	14,285	14,285
Current Portion of Long-Term Debt
Total Creditors	37,853	39,099	42,320	45,535
Other Current Liabilities	86,332	86,332	86,332	86,332
Total Current Liabilities	138,470	139,716	142,937	146,152
Total Long-term Debt	1,025	1,025	1,025	1,025
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities	23,273	23,273	23,273	23,273
Total Non-current Liabilities	24,298	24,298	24,298	24,298
Total Provisions
Total Liabilities	162,768	164,014	167,235	170,450
Shareholders Equity	266,694	275,883	287,376	301,245
Minority Interests	4,774	4,774	4,774	4,774
Total Equity	271,468	280,657	292,150	306,019

	Mar-24A	Mar-25F	Mar-26F	Mar-27F
Revenue Growth	(2.4%)	3.0%	8.2%	7.6%
Operating EBITDA Growth	(38.2%)	48.6%	23.4%	17.9%
Operating EBITDA Margin	9.5%	13.8%	15.7%	17.2%
Net Cash Per Share (Rs)	60.11	79.38	96.52	116.89
BVPS (Rs)	301.75	312.15	325.15	340.85
Gross Interest Cover	8.03	16.34	30.46	52.65
Effective Tax Rate	22.5%	26.6%	25.0%	25.5%
Net Dividend Payout Ratio	126.0%	80.0%	80.0%	80.0%
Accounts Receivables Days	85.23	79.00	77.24	77.47
Inventory Days	0.29	0.35	0.33	0.31
Accounts Payables Days	38.12	36.42	36.00	36.72
ROIC (%)	9.8%	17.9%	24.7%	30.2%
ROCE (%)	8.1%	13.6%	17.6%	20.3%
Return On Average Assets	5.4%	9.1%	12.1%	14.1%

(91) 22 4161 1543 abhishek.shindadkr@incredresearch.com

(91) 02241611554 smit.gosrani@incredresearch.com

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Market Data

Source: Bloomberg