InCred Equities - Tech Mahindra

	Mar-25A	Mar-26F	Mar-27F	Mar-28F
Revenue (Rsm)	529,883	542,928	575,810	615,180
Operating EBITDA (Rsm)	69,911	83,916	99,039	110,732
Net Profit (Rsm)	42,514	52,551	64,044	73,333
Core EPS (Rs)	48.4	59.5	72.5	83.0
Core EPS Growth	52.1%	22.8%	21.9%	14.5%
FD Core P/E (x)	31.71	25.66	21.05	18.39
DPS (Rs)	45.0	60.0	58.0	66.4
Dividend Yield	2.95%	3.95%	3.80%	4.35%
EV/EBITDA (x)	18.51	15.41	12.88	11.36
P/FCFE (x)	25.97	27.74	21.54	19.45
Net Gearing	(20.9%)	(21.4%)	(26.5%)	(31.2%)
P/BV (x)	4.93	4.94	4.72	4.49
ROE	15.8%	19.2%	22.9%	25.0%
% Change In Core EPS Estimates
InCred Research/Consensus EPS (x)

(Rs mn)	Mar-25A	Mar-26F	Mar-27F	Mar-28F
Total Net Revenues	529,883	542,928	575,810	615,180
Gross Profit	149,035	158,650	173,319	185,169
Operating EBITDA	69,911	83,916	99,039	110,732
Depreciation And Amortisation	(18,529)	(18,296)	(18,426)	(18,455)
Operating EBIT	51,382	65,619	80,613	92,277
Financial Income/(Expense)	7,713	4,543	5,365	6,534
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)	(2,376)	1,116	1,036	923
Profit Before Tax (pre-EI)	56,719	71,278	87,015	99,734
Exceptional Items
Pre-tax Profit	56,719	71,278	87,015	99,734
Taxation	(14,002)	(19,220)	(23,463)	(26,892)
Exceptional Income - post-tax	(273)
Profit After Tax	42,444	52,059	63,552	72,841
Minority Interests	70	492	492	492
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit	42,514	52,551	64,044	73,333
Recurring Net Profit	42,787	52,551	64,044	73,333
Fully Diluted Recurring Net Profit	42,787	52,551	64,044	73,333

(Rs mn)	Mar-25A	Mar-26F	Mar-27F	Mar-28F
EBITDA	69,911	83,916	99,039	110,732
Cash Flow from Invt. & Assoc.
Change In Working Capital	(2,662)	(8,448)	(4,834)	(5,787)
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense	(140)	(984)	(984)	(984)
Other Operating Cashflow	8,709	4,588	3,654	3,001
Net Interest (Paid)/Received	(3,217)	(3,112)	(2,178)	(1,525)
Tax Paid	(14,744)	(19,220)	(23,463)	(26,892)
Cashflow From Operations	57,857	56,740	71,234	78,545
Capex	(5,935)	(8,144)	(8,637)	(9,228)
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow	5,703	8,771	8,580	8,982
Cash Flow From Investing	(232)	627	(58)	(246)
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased	(927)
Dividends Paid	(38,418)	(53,216)	(51,235)	(58,667)
Preferred Dividends
Other Financing Cashflow	(18,647)	(3,112)	(2,178)	(1,525)
Cash Flow From Financing	(57,992)	(56,328)	(53,413)	(60,192)
Total Cash Generated	(367)	1,039	17,763	18,107
Free Cashflow To Equity	51,922	48,596	62,597	69,317
Free Cashflow To Firm	60,842	60,479	73,355	79,824

(Rs mn)	Mar-25A	Mar-26F	Mar-27F	Mar-28F
Total Cash And Equivalents	74,350	75,389	93,153	111,259
Total Debtors	115,470	119,444	126,678	135,340
Inventories	394	394	394	394
Total Other Current Assets	46,578	46,578	46,578	46,578
Total Current Assets	236,792	241,805	266,803	293,571
Fixed Assets	39,197	29,044	19,256	10,028
Total Investments	8,715	8,715	8,715	8,715
Intangible Assets	100,484	100,484	100,484	100,484
Total Other Non-Current Assets	59,757	59,757	59,757	59,757
Total Non-current Assets	208,153	198,000	188,212	178,984
Short-term Debt	4,714	4,714	4,714	4,714
Current Portion of Long-Term Debt
Total Creditors	44,108	39,634	42,034	44,908
Other Current Liabilities	90,222	90,222	90,222	90,222
Total Current Liabilities	139,044	134,570	136,970	139,844
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities	27,984	27,984	27,984	27,984
Total Non-current Liabilities	27,984	27,984	27,984	27,984
Total Provisions
Total Liabilities	167,028	162,554	164,954	167,828
Shareholders Equity	273,615	272,950	285,758	300,425
Minority Interests	4,302	4,302	4,302	4,302
Total Equity	277,917	277,252	290,060	304,727

	Mar-25A	Mar-26F	Mar-27F	Mar-28F
Revenue Growth	1.9%	2.5%	6.1%	6.8%
Operating EBITDA Growth	40.8%	20.0%	18.0%	11.8%
Operating EBITDA Margin	13.2%	15.5%	17.2%	18.0%
Net Cash Per Share (Rs)	65.81	66.99	87.08	107.57
BVPS (Rs)	309.58	308.83	323.32	339.92
Gross Interest Cover	15.97	21.09	37.01	60.51
Effective Tax Rate	24.7%	27.0%	27.0%	27.0%
Net Dividend Payout Ratio	93.1%	101.3%	80.0%	80.0%
Accounts Receivables Days	79.04	78.96	78.01	77.73
Inventory Days	0.37	0.37	0.36	0.33
Accounts Payables Days	39.28	39.77	37.03	36.90
ROIC (%)	17.1%	21.1%	26.1%	30.5%
ROCE (%)	13.2%	16.3%	19.6%	21.5%
Return On Average Assets	8.4%	11.0%	13.3%	14.7%

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

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Source: Bloomberg