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Last Updated on: 23 June, 2024|Author: Getaka | Social: X Twitter Profile

Fundamental Analysis of Tech Mahindra Ltd

Basic Stock Data

Last Updated: June 24, 2024, 2:44 am

Market Cap 1,25,162 Cr.
Current Price 1,278
High / Low1,416/1,060
Stock P/E53.1
Book Value 273
Dividend Yield3.13 %
ROCE11.9 %
ROE8.64 %
Face Value 5.00
PEG Ratio-5.11

Competitors of Tech Mahindra Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Datasoft Applications Software (India) Ltd 6.22 Cr. 54.954.9/5.3736.6 2.210.00 %42.1 %103 % 10.0
Contil India Ltd 46.4 Cr. 150178/73.432.9 30.90.00 %23.8 %16.7 % 10.0
Kellton Tech Solutions Ltd 1,095 Cr. 112128/60.417.1 45.50.00 %16.2 %15.7 % 5.00
Mphasis Ltd 45,536 Cr. 2,4092,838/1,80729.3 4652.28 %23.1 %18.6 % 10.0
Avance Technologies Ltd 194 Cr. 0.981.71/0.2439.8 1.900.00 %%1.31 % 1.00
Industry Average36,328.25 Cr710.4864.85123.220.69%20.39%19.93%6.81

Quarterly Result

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024
Sales9,73010,19810,88111,45112,11612,70813,13013,73513,71813,15912,86413,10112,871
Expenses7,8328,3218,8879,39210,02810,82811,18511,60011,91511,82111,95011,95511,772
Operating Profit1,8971,8761,9942,0592,0881,8801,9442,1351,8031,3389141,1461,099
OPM %20%18%18%18%17%15%15%16%13%10%7%9%9%
Other Income3328728222332412229024730620026492380
Interest42383534554079113931209811658
Depreciation344331343362484477492498490447466443461
Profit before tax1,5441,7941,8981,8861,8731,4861,6641,7711,525971615679959
Tax %32%24%29%27%18%23%22%27%26%28%18%23%31%
Net Profit1,0441,3661,3411,3781,5451,1481,2991,2851,125704505524664
EPS in Rs11.1713.9713.8114.1015.4911.6413.2113.3211.477.105.065.236.77

Last Updated: June 9, 2024, 10:35 am

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: May 27, 2024, 6:11 am

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Sales6,87318,80222,62126,49429,14130,77334,74236,86837,85544,64653,29051,996
Expenses5,45114,63018,42822,23424,95626,06328,47131,36531,05936,62645,52747,489
Operating Profit1,4224,1724,1934,2604,1844,7106,2715,5036,7968,0207,7634,506
OPM %21%22%19%16%14%15%18%15%18%18%15%9%
Other Income-1412441064537751,4175341,1927881,115965927
Interest103806997129162133192174163326392
Depreciation2005226117599781,0851,1291,4461,4581,5201,9571,817
Profit before tax9783,8153,6183,8573,8534,8795,5435,0585,9537,4526,4463,224
Tax %24%20%27%22%26%22%23%23%27%24%25%26%
Net Profit1,3073,0622,6593,0272,8513,7864,2893,8974,3535,6304,8572,397
EPS in Rs25.1332.4427.3530.9228.8838.7843.7041.7645.7357.2749.6024.14
Dividend Payout %5%15%22%35%28%33%29%32%89%47%91%150%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)134.28%-13.16%13.84%-5.81%32.80%13.29%-9.14%11.70%29.34%-13.73%-50.65%
Change in YoY Net Profit Growth (%)0.00%-147.44%27.00%-19.65%38.61%-19.51%-22.43%20.84%17.63%-43.07%-36.92%

Growth

Compounded Sales Growth
10 Years:23%
5 Years:12%
3 Years:13%
TTM:2%
Compounded Profit Growth
10 Years:14%
5 Years:6%
3 Years:7%
TTM:-46%
Stock Price CAGR
10 Years:10%
5 Years:8%
3 Years:6%
1 Year:17%
Return on Equity
10 Years:21%
5 Years:20%
3 Years:19%
Last Year:18%

Last Updated: April 16, 2024, 6:18 pm

Tech Mahindra Ltd Balance Sheet

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Sep 2023
Equity Capital128128234480436439442444436437439440441
Reserves3,9235,2988,94811,76814,15515,99818,40119,84121,37724,42826,44727,48425,971
Borrowings1,1271,3803637001,0911,3662,3971,9963,6702,9012,6182,7402,614
Other Liabilities1,7582,1786,3946,8996,8438,2549,19211,16611,83411,83614,91115,16214,465
Total Liabilities6,9358,98415,94019,84822,52526,05730,43133,44637,31839,60244,41645,82743,491
Fixed Assets6821,2452,5944,0334,3096,4607,6227,0618,8729,01814,78414,93214,384
CWIP1673426656862937324027650118165120124
Investments3,5884,0991,4722,1031,2972,3964,8417,3425,84810,2384,8843,3882,749
Other Assets2,4983,60711,60713,14516,28916,82817,72818,76622,54820,22824,58327,38826,234
Total Assets6,9358,98415,94019,84822,52526,05730,43133,44637,31839,60244,41645,82743,491

Reserves and Borrowings Chart

Tech Mahindra Ltd Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Cash from Operating Activity 7128551,5962,4483,1374,0713,5544,4324,3588,0945,2855,572
Cash from Investing Activity -420-622291-1,865-1,453-2,893-3,319-2,1041,081-5,433480-226
Cash from Financing Activity -31765-972-829-496-1,571-269-2,251-4,466-2,987-4,667-5,078
Net Cash Flow-26298915-2461,188-392-3577974-3261,098267

Free Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow0.00-359.00-696.003.003.002.005.002.004.006.005.002.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Debtor Days889084848067777375879888
Inventory Days
Days Payable
Cash Conversion Cycle889084848067777375879888
Working Capital Days452447646967533760424340
ROCE %18%19%45%32%27%23%24%25%22%23%26%22%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthJun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024
Promoters35.73%35.70%35.67%35.26%35.24%35.21%35.19%35.17%35.15%35.13%35.10%35.08%
FIIs36.15%35.55%35.36%34.27%30.43%28.20%27.95%26.87%25.69%26.22%24.58%24.15%
DIIs16.50%16.90%17.22%18.05%20.73%23.61%23.73%25.68%26.86%27.03%28.91%29.42%
Government0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%
Public11.44%11.67%11.58%12.25%13.43%12.81%12.93%12.07%12.11%11.44%11.22%11.16%
Others0.01%0.01%0.01%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
No. of Shareholders5,45,6135,90,4506,09,6407,31,4538,89,6069,73,2079,92,2389,36,5349,29,8278,85,5908,67,3738,48,484

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
SBI Nifty 50 ETF11,494,6350.841462.866,170,9332024-06-2086.27%
SBI S&P BSE Sensex ETF8,141,2140.961036.056,170,9332024-06-2031.93%
ICICI Prudential Bluechip Fund6,467,0881.72823.036,170,9332024-06-204.8%
Tata Digital India Fund6,170,9338.47785.346,170,9332024-06-200%
ICICI Prudential Technology Fund5,966,6036.4759.346,170,9332024-06-20-3.31%
HDFC Flexi Cap Fund - Regular Plan4,700,0001.3598.156,170,9332024-06-20-23.84%
SBI Balanced Advantage Fund4,496,0872.16572.196,170,9332024-06-20-27.14%
SBI Long Term Equity Fund3,180,7412.16404.86,170,9332024-06-20-48.46%
UTI Nifty 50 ETF3,170,4090.84403.486,170,9332024-06-20-48.62%
UTI S&P BSE Sensex ETF2,775,4130.96353.26,170,9332024-06-20-55.02%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue5.005.005.005.005.00
Basic EPS (Rs.)26.6654.7663.3250.6446.21
Diluted EPS (Rs.)26.5854.7662.8150.1945.85
Cash EPS (Rs.)47.6280.4581.4566.4761.37
Book Value[Excl.RevalReserv]/Share (Rs.)307.58322.65311.99288.78254.77
Book Value[Incl.RevalReserv]/Share (Rs.)307.58322.65311.99288.78254.77
Revenue From Operations / Share (Rs.)589.11605.57508.73433.12422.99
PBDIT / Share (Rs.)61.45102.20104.0686.7776.88
PBIT / Share (Rs.)40.8677.2786.7370.0960.29
PBT / Share (Rs.)36.4173.5784.8868.1058.09
Net Profit / Share (Rs.)27.0455.5264.1249.7944.78
NP After MI And SOA / Share (Rs.)26.7154.9063.4250.6646.27
PBDIT Margin (%)10.4316.8720.4520.0318.17
PBIT Margin (%)6.9312.7617.0416.1814.25
PBT Margin (%)6.1812.1416.6815.7213.73
Net Profit Margin (%)4.589.1612.6011.4910.58
NP After MI And SOA Margin (%)4.539.0612.4611.6910.93
Return on Networth / Equity (%)8.8417.3020.7017.8118.48
Return on Capital Employeed (%)12.1921.5123.5120.8319.88
Return On Assets (%)5.4210.4612.4011.1510.79
Long Term Debt / Equity (X)0.000.000.010.010.01
Total Debt / Equity (X)0.050.050.050.060.11
Asset Turnover Ratio (%)1.161.050.920.830.91
Current Ratio (X)1.691.681.962.462.12
Quick Ratio (X)1.691.681.952.452.12
Dividend Payout Ratio (NP) (%)0.0088.2471.5239.7261.78
Dividend Payout Ratio (CP) (%)0.0060.6856.1829.8845.47
Earning Retention Ratio (%)0.0011.7628.4860.2838.22
Cash Earning Retention Ratio (%)0.0039.3243.8270.1254.53
Interest Coverage Ratio (X)13.8327.6256.1643.5834.92
Interest Coverage Ratio (Post Tax) (X)7.0816.0135.6126.0121.34
Enterprise Value (Cr.)107633.7894756.50129681.1785841.3548914.24
EV / Net Operating Revenue (X)2.071.782.902.271.33
EV / EBITDA (X)19.8510.5414.2011.327.30
MarketCap / Net Operating Revenue (X)2.121.822.952.291.34
Retention Ratios (%)0.0011.7528.4760.2738.21
Price / BV (X)4.143.474.893.482.26
Price / Net Operating Revenue (X)2.121.822.952.291.34
EarningsYield0.020.040.040.050.08

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value: 1,291.68

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

Undervalued: 1.07% compared to the current price 1278

Intrinsic Value: 1,157.58

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators along with EPS growth.

Overvalued: 9.42% compared to the current price ₹1278

Last 5 Year EPS CAGR: -10.38%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 25.50%, which is a positive sign.
  2. The company has higher reserves (18,364.42 cr) compared to borrowings (1,979.92 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (32.17 cr) and profit (85.42 cr) over the years.
  1. The stock has a high average Working Capital Days of 49.25, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 82.58, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Tech Mahindra Ltd:
    1. Net Profit Margin: 4.58%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 12.19% (Industry Average ROCE: %)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 8.84% (Industry Average ROE: %)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 7.08
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 1.69
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. ✗ Stock P/E: 53.1 (Industry average Stock P/E: )
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.05
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company

Tech Mahindra Ltd. is a Public Limited Listed company incorporated on 24/10/1986 and has its registered office in the State of Maharashtra, India. Company’s Corporate Identification Number(CIN) is L64200MH1986PLC041370 and registration number is 041370. Currently Company is involved in the business activities of Other information technology and computer service activities n.e.c. Company’s Total Operating Revenue is Rs. 34726.10 Cr. and Equity Capital is Rs. 485.90 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
IT Consulting & SoftwareGateway Building, Apollo Bunder, Mumbai Maharashtra 400001investor.relations@techmahindra.com
http://www.techmahindra.com
Management
NamePosition Held
Mr. Anand G MahindraNon Executive Chairman
Mr. C P GurnaniManaging Director & CEO
Dr. Anish ShahNon Executive Director
Mr. Manoj BhatNon Executive Director
Ms. Penelope FowlerIndependent Director
Mrs. M Rajyalakshmi RaoIndependent Director
Dr. Mukti KhaireIndependent Director
Mr. Haigreve KhaitanIndependent Director
Ms. Shikha SharmaIndependent Director
Mr. T N ManoharanLead Independent Director

FAQ

What is the latest fair value of Tech Mahindra Ltd?

The latest fair value of Tech Mahindra Ltd is ₹1291.68.

What is the Market Cap of Tech Mahindra Ltd?

The Market Cap of Tech Mahindra Ltd is 1,25,162 Cr..

What is the current Stock Price of Tech Mahindra Ltd as on 07 June 2024?

The current stock price of Tech Mahindra Ltd as on 07 June 2024 is 1,278.

What is the High / Low of Tech Mahindra Ltd stocks in FY 2024?

In FY 2024, the High / Low of Tech Mahindra Ltd stocks is 1,416/1,060.

What is the Stock P/E of Tech Mahindra Ltd?

The Stock P/E of Tech Mahindra Ltd is 53.1.

What is the Book Value of Tech Mahindra Ltd?

The Book Value of Tech Mahindra Ltd is 273.

What is the Dividend Yield of Tech Mahindra Ltd?

The Dividend Yield of Tech Mahindra Ltd is 3.13 %.

What is the ROCE of Tech Mahindra Ltd?

The ROCE of Tech Mahindra Ltd is 11.9 %.

What is the ROE of Tech Mahindra Ltd?

The ROE of Tech Mahindra Ltd is 8.64 %.

What is the Face Value of Tech Mahindra Ltd?

The Face Value of Tech Mahindra Ltd is 5.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Tech Mahindra Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE