Tech Mahindra Q2 Results LIVE Updates: Sharp plunge in profit likely; all eyes on deal wins

We are estimating a -0.95% cc revenue growth with 8 bps cross currency headwinds, translating into -1.03 QoQ USD growth. We expect -1.5%/-0.75% QoQ growth in Telecom/Enterprise.

TechM is set to report a 0.7% QoQ decline in CC and a -0.9% decline in USD, driven by weakness in the Telecom segment and weak deal flow in earlier quarters. Margins are likely to decline further by 100 bps QoQ on the back of various business restructuring actions. Deal wins are anticipated to be weak YoY as is the overall outlook.

We expect Tech Mahindra's second-quarter revenues to decline by 1% QoQ cc, due to weak demand environment. We expect margins to contract by 80 bps QoQ due to revenue decline and provision on receivables. The focus would be on strategy under new leadership.

The communications vertical is expected to be the weakest during the September quarter. Deal wins are likely to remain soft similar to the previous two quarters, due to weak macro environment and slow decision-making of businesses. Analysts are also building in 400 bps one-time impact on margins, while normalised margins to be around 8.8%, flat quarter-on-quarter (QoQ).

Net profit for the quarter is seen falling 42%, according to an average estimate of five brokerages. Revenues, in both dollar and CC terms, are expected to decline marginally (0.4-1%).