CMP: Rs4445 |
Target Price: Rs4450
* MTCL's simple and focused 4*4*4 growth strategy, investments in partnerships and whitespace opportunities led to superior growth in the last few quarters. Though Q2 performance will be difficult to replicate, we expect revenue growth momentum to sustain.
* In the mid-cap space, MTCL benefitted from its better footprint among F500 clients amid a strong rebound in technology spending. The sharp recovery in TTH and deferral of uptick in travel & other expenses also led to strong operating performance and earnings upgrade.
* The company is confident of delivering industry-leading double-digit revenue growth on the back of strong deal wins, a healthy deal pipeline and broad-based revenue growth. MTCL remains confident of delivering 20%+ EBITDAM in FY22 and aspires to maintain it.
* We raise our FY22-24E EPS by 2-9%, factoring in secular demand trends. We roll forward TP to Dec'22 and upgrade the stock to Hold with a revised TP of Rs4,450 at 36x Dec'23E EPS (Rs3,300 earlier), considering higher medium-term growth assumptions (Exhibit 7) and the correction in the stock price (~10% correction from peak).