Tech Mahindra, an IT solutions and services provider to the global telecom industry, has signed five-year deals worth $250 million (around Rs1,100 crore) with two customers.
It has signed a five-year testing deal with a leading US telecom player and an existing client (reportedly AT&T). Tech Mahindra has also bagged another deal from a leading Kuwait telecom firm for systems integration.
It may be noted that the company has been focusing on getting larger deals and increasing its revenue share from the US and the APAC regions. It recently won deals from Telecom Fiji and a US $20mn deal from Telecom New Zealand among others.
Currently, North America contributes close to 20% revenues and rest-of-the-world contributes 6%. Over 70% comes from Europe, primarily through its largest client, British Telecom (BT).
These deal-wins are a positive for the company, as they will help it diversify revenues away from BT and will give it a wider spread of clients across segments. We maintain a BUY on the stock, with a target price of Rs1,072.