Tech Mahindra which paid 900% dividend in FY22 may surprise investors on November 1 | Jobs Vox

In its regulatory filing on Saturday, Tech Mahindra said, “we would like to inform that the Board of Directors will also consider the proposal for payment of interim dividend for the financial year 2022-23, at the meeting scheduled for October 31 and November 1, 2022.”

It added: “The Board of Directors will consider the payment of an interim dividend on November 1, 2022.”

For the interim dividend, Tech Mahindra has fixed November 10 to determine the eligible shareholders for the benefit. This means that Tech Mahindra shares are most likely to receive a dividend on October 31.

On Friday, shares of Tech Mahindra closed at ₹1,041.25 per piece compared to the previous closing on the Belgrade Stock Exchange. The company’s market capitalization is complete ₹1.01 lakh crores.

At the current market price, Tech Mahindra has a dividend yield of 4.3%.

In FY22, Tech Mahindra paid 900% dividend aggregating to ₹45 per share to its shareholders.

In Q1FI23, the company reported a 16% year-on-year decline in net profit ₹1,131.6 million, however, revenue grew by 24.6% year-on-year to ₹12,708 crowns. In constant currency, revenue growth was 3.5% quarter-on-quarter (QoQ). EBITDA was at ₹1,880 crore in Q1FY23.

Tech Mahindra’s peers Infosis, TCS, Wipro, Mindtree and HCL Tech have already announced their Q2 results earlier this month. How Tech Mahindra fares in Q2 will be closely watched.

What to expect from Tech Mahindra’s Q2 results?

For the second quarter of FY23, Akis Securities said in its outlook report, “We expect revenue to grow by 3.4% QoQ supported by increased new contract wins,” adding that margins are likely to expand with the help of higher off-shoring and favorable currency mix”.

Among the key trackables according to Akis Securities are — TCVs of business and pipeline from the communications vertical; Price scenario; Attrition; Outlook for growth/margin/DSO day; and a comment on the introduction of 5G.

Meanwhile, in its Q2 outlook report, analysts at stockbroker Sharekhan said: “The company is expected to report a slight CC revenue growth of 2.5% QoQ led by organic growth of 2.1% QoQ and 0.4% to fully benefit from purchasing Thirdware. Tech Mahindra is likely to have a cross-currency impact of 190 bps.”

Further, Sharekhan’s note said, “We expect EBIT margins to improve slightly by 18 basis points quarter-on-quarter due to the full impact of wage revisions that largely offer improvement in utilization and streamlining of operations from low-margin businesses.”

Sharekhan has given the stock a ‘buy’ rating with a target price of ₹1,220 each on Tech Mahindra.

Disclaimer: The views and recommendations given above are those of individual analysts or brokerage firms and not of Mint.