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Last Updated on: 04 March, 2024|Author: Getaka | Social: X Twitter Profile

Fundamental Analysis of Tech Mahindra Ltd

About the Company - Tech Mahindra Ltd

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

Tech Mahindra Ltd. Share Price Update

Share PriceValue
Today₹1,311.75
Previous Day₹1,309.75

Basic Stock Data of Tech Mahindra Ltd

Market Cap 1,26,441 Cr.
Current Price 1,295
High / Low1,416/981
Stock P/E44.9
Book Value 271
Dividend Yield2.46 %
ROCE22.1 %
ROE17.6 %
Face Value 5.00

Data Source: screener.in

Competitors of Tech Mahindra Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Alphalogic Techsys Ltd 404 Cr. 86.292.5/18.890.4 7.640.00 %20.3 %14.7 % 5.00
Trejhara Solutions Ltd 241 Cr. 166223/47.0 1270.00 %20.3 %22.6 % 10.0
Brightcom Group Ltd 3,642 Cr. 18.036.8/9.272.57 34.70.00 %30.9 %22.3 % 2.00
Oracle Financial Services Software Ltd 67,247 Cr. 7,7608,198/3,15031.4 7502.90 %35.1 %24.8 % 5.00
Mphasis Ltd 49,917 Cr. 2,6422,838/1,66031.9 4191.85 %28.9 %21.9 % 10.0
Industry Average24,290.20 Cr2,134.4431.25267.670.95%27.10%21.26%6.40

Tech Mahindra Ltd Quarterly Results

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales9,6479,73010,19810,88111,45112,11612,70813,13013,73513,71813,15912,86413,101
Expenses7,7527,8328,3218,8879,39210,02810,82811,18511,60011,91511,82111,95011,955
Operating Profit1,8961,8971,8761,9942,0592,0881,8801,9442,1351,8031,3389141,146
OPM %20%20%18%18%18%17%15%15%16%13%10%7%9%
Other Income2213328728222332412229024730620026492
Interest42423835345540791139312098116
Depreciation358344331343362484477492498490447466443
Profit before tax1,7161,5441,7941,8981,8861,8731,4861,6641,7711,525971615679
Tax %25%32%24%29%27%18%23%22%27%26%28%18%23%
Net Profit1,2901,0441,3661,3411,3781,5451,1481,2991,2851,125704505524
EPS in Rs13.5411.1713.9713.8114.1015.4911.6413.2113.3211.477.105.065.23

Tech Mahindra Ltd Quarterly Chart

Tech Mahindra Ltd Profit & Loss

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales5,4906,87318,80222,62126,49429,14130,77334,74236,86837,85544,64653,29052,842
Expenses4,5725,45114,63018,42822,23424,95626,06328,47131,36531,05936,62645,52747,641
Operating Profit9181,4224,1724,1934,2604,1844,7106,2715,5036,7968,0207,7635,202
OPM %17%21%22%19%16%14%15%18%15%18%18%15%10%
Other Income30-1412441064537751,4175341,1927881,115965862
Interest103103806997129162133192174163326427
Depreciation1612005226117599781,0851,1291,4461,4581,5201,9571,846
Profit before tax6859783,8153,6183,8573,8534,8795,5435,0585,9537,4526,4463,790
Tax %21%24%20%27%22%26%22%23%23%27%24%25%
Net Profit1,0991,3073,0622,6593,0272,8513,7864,2893,8974,3535,6304,8572,858
EPS in Rs21.4825.1332.4427.3530.9228.8838.7843.7041.7645.7357.2749.6028.86
Dividend Payout %5%5%15%22%35%28%33%29%32%89%47%91%

Tech Mahindra Ltd Profit & Loss Yearly Chart

YoY Net Profit Growth
Year2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)18.93%134.28%-13.16%13.84%-5.81%32.80%13.29%-9.14%11.70%29.34%-13.73%
Change in YoY Net Profit Growth (%)0.00%115.35%-147.44%27.00%-19.65%38.61%-19.51%-22.43%20.84%17.63%-43.07%

Tech Mahindra Ltd 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:9%
3 Years:11%
1 Year:14%
Return on Equity
10 Years:21%
5 Years:20%
3 Years:19%
Last Year:18%

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

Tech Mahindra Ltd 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

Tech Mahindra Ltd 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%

Tech Mahindra Ltd Financial Efficiency Indicators Chart

Tech Mahindra Ltd Share Holding Pattern

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Promoters35.76%35.73%35.70%35.67%35.26%35.24%35.21%35.19%35.17%35.15%35.13%35.10%
FIIs38.32%36.15%35.55%35.36%34.27%30.43%28.20%27.95%26.87%25.69%26.22%24.58%
DIIs14.39%16.50%16.90%17.22%18.05%20.73%23.61%23.73%25.68%26.86%27.03%28.91%
Government0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%0.17%
Public11.36%11.44%11.67%11.58%12.25%13.43%12.81%12.93%12.07%12.11%11.44%11.22%
Others0.01%0.01%0.01%0.01%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
No. of Shareholders5,30,9215,45,6135,90,4506,09,6407,31,4538,89,6069,73,2079,92,2389,36,5349,29,8278,85,5908,67,373

Tech Mahindra Ltd Shareholding Pattern Chart

No. of Tech Mahindra Ltd Shareholders

Tech Mahindra Ltd Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)
SBI Nifty 50 ETF114946350.841462.86
SBI S&P BSE Sensex ETF81412140.961036.05
ICICI Prudential Bluechip Fund64670881.72823.03
Tata Digital India Fund61709338.47785.34
ICICI Prudential Technology Fund59666036.4759.34
HDFC Flexi Cap Fund - Regular Plan47000001.3598.15
SBI Balanced Advantage Fund44960872.16572.19
SBI Long Term Equity Fund31807412.16404.8
UTI Nifty 50 ETF31704090.84403.48
UTI S&P BSE Sensex ETF27754130.96353.2

Tech Mahindra Ltd ROCE Trend

Tech Mahindra Ltd EPS Trend

Tech Mahindra Ltd Key Financial Ratios

MonthMar 23Mar 22Mar 21Mar 20Mar 19
FaceValue5.005.005.005.005.00
Basic EPS (Rs.)54.7663.3250.6446.2148.47
Diluted EPS (Rs.)54.7662.8150.1945.8547.72
Cash EPS (Rs.)80.4581.4566.4761.3761.79
Book Value[Excl.RevalReserv]/Share (Rs.)322.65311.99288.78254.77233.94
Book Value[Incl.RevalReserv]/Share (Rs.)322.65311.99288.78254.77233.94
Revenue From Operations / Share (Rs.)605.57508.73433.12422.99391.50
PBDIT / Share (Rs.)102.20104.0686.7776.8877.43
PBIT / Share (Rs.)77.2786.7370.0960.2964.70
PBT / Share (Rs.)73.5784.8868.1058.0963.20
Net Profit / Share (Rs.)55.5264.1249.7944.7849.07
NP After MI And SOA / Share (Rs.)54.9063.4250.6646.2748.43
PBDIT Margin (%)16.8720.4520.0318.1719.77
PBIT Margin (%)12.7617.0416.1814.2516.52
PBT Margin (%)12.1416.6815.7213.7316.14
Net Profit Margin (%)9.1612.6011.4910.5812.53
NP After MI And SOA Margin (%)9.0612.4611.6910.9312.37
Return on Networth / Equity (%)17.3020.7017.8118.4821.18
Return on Capital Employeed (%)21.5123.5120.8319.8824.83
Return On Assets (%)10.4612.4011.1510.7912.84
Long Term Debt / Equity (X)0.000.010.010.010.01
Total Debt / Equity (X)0.050.050.060.110.06
Asset Turnover Ratio (%)1.050.920.830.910.89
Current Ratio (X)1.681.962.462.122.09
Quick Ratio (X)1.681.952.452.122.08
Dividend Payout Ratio (NP) (%)88.2471.5239.7261.7834.68
Dividend Payout Ratio (CP) (%)60.6856.1829.8845.4727.46
Earning Retention Ratio (%)11.7628.4860.2838.2265.32
Cash Earning Retention Ratio (%)39.3243.8270.1254.5372.54
Interest Coverage Ratio (X)27.6256.1643.5834.9251.58
Interest Coverage Ratio (Post Tax) (X)16.0135.6126.0121.3433.69
Enterprise Value (Cr.)94756.50129681.1785841.3548914.2468403.69
EV / Net Operating Revenue (X)1.782.902.271.331.97
EV / EBITDA (X)10.5414.2011.327.309.96
MarketCap / Net Operating Revenue (X)1.822.952.291.341.98
Retention Ratios (%)11.7528.4760.2738.2165.31
Price / BV (X)3.474.893.482.263.40
Price / Net Operating Revenue (X)1.822.952.291.341.98
EarningsYield0.040.040.050.080.06

Tech Mahindra Ltd Profitability Ratios (%)

Tech Mahindra Ltd Liquidity Ratios

Tech Mahindra Ltd Liquidity Ratios (%)

Tech Mahindra Ltd Interest Coverage Ratios (X)

Tech Mahindra Ltd Valuation Ratios

Fair Value / Intrinsic Value of Tech Mahindra Ltd

Fair Value: ₹2194.23

The stock is undervalued by 69.44% compared to the current price ₹1295

*Investments are subject to market risks

Strength and Weakness of Tech Mahindra Ltd

StrengthWeakness
  1. The stock has a high average ROCE of 25.50%, which is a positive sign.
  2. The company has higher reserves (17,233.77 cr) compared to borrowings (1,920.23 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (30.15 cr) and profit (131.54 cr) over the years.
  1. The stock is trading at a high valuation with an average P/B ratio of 71.82 and average Dividend Yield of 15.35%.
  2. The stock has a high average Working Capital Days of 49.25, which may not be favorable.
  3. The stock has a high average Cash Conversion Cycle of 82.58, which may not be favorable.

Should I Buy Tech Mahindra Ltd Share Now?

  • Considering various financial indicators, investors might exercise caution regarding investment in Tech Mahindra Ltd:
    1. Net Profit Margin: 9.16%
      • 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: 21.51% (Industry Average ROCE: 24.93%)
      • 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. Interest Coverage Ratio (Post Tax): 16.01
      • 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.
    4. Quick Ratio: 1.68
      • 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.
    5. ✗ Stock P/E: 44.9 (Industry average Stock P/E: 34.98)
      • 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.
    6. ✓ 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 suggests exercising caution. It's advisable to conduct further research or consult with financial experts before considering any investment.

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