Target Price: Rs4400
* MTCL delivered a steady operating performance in Q4. Revenue grew by 4.7% QoQ (CC 5.2%) to USD383.8mn, broadly in line with our expectations. EBITDAM contracted by ~50bps QoQ to 21% and came in a tad better than our expectations.
* Deal wins remained healthy in Q4 at USD390mn vs. USD358mn in Q3, taking the TCV of deals signed in FY22 to ~USD1.6bn (16.7% YoY). Management indicated that the deal intake remains well-balanced across annuity and transformational deals.
* The company is confident about maintaining revenue growth momentum and delivering top quartile growth in FY23 while sustaining EBITDAM over 20% on the back of broad-based revenue growth, strong deal wins, and a healthy deal pipeline.
* We raise our FY23E/24E EPS by 3.2%/3.5%, factoring in the Q4 performance and higher other income assumptions. Considering rich valuations, we maintain Hold rating on the stock with a TP of Rs4,400 (Rs4,300 earlier) at 33x Mar'24E EPS.