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Business News/ Markets / Stock Markets/  Tech Mahindra which paid 900% dividend in FY22 may surprise investors on 1st Nov
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Tech Mahindra which paid 900% dividend in FY22 may surprise investors on 1st Nov

Along with the dividend proposal, the company's board will also consider and approve the financial performance for the second quarter ending September 30, 2022 (Q2FY23).

The tech giant is known for giving hefty dividends in the past few years. (Bloomberg)Premium
The tech giant is known for giving hefty dividends in the past few years. (Bloomberg)

IT major, Tech Mahindra will be considering an interim dividend for FY23 on November 1. Along with the dividend proposal, the company's board will also consider and approve the financial performance for the second quarter ending September 30, 2022 (Q2FY23). The tech giant is known for giving hefty dividends in the past few years. In FY22 alone, Tech Mahindra paid a whopping 900% dividend to its shareholders.

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

It added, "The payment of Interim Dividend will be considered by the Board on 1st November 2022."

For the interim dividend, Tech Mahindra has fixed November 10 to determine eligible shareholders for the benefit. That means, Tech Mahindra stock is most likely to turn ex-dividend on October 31.

On Friday, Tech Mahindra stock closed at 1,041.25 apiece flat compared to the previous closing on BSE. The company's market cap is over 1.01 lakh crore.

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 equity share to its shareholders.

In Q1FY23, the company reported a 16% yoy drop in net profit to 1,131.6 crore, however, revenue surged by 24.6% yoy to 12,708 crore. In constant currency terms, revenue growth stood at 3.5% quarter-on-quarter (QoQ). EBITDA was at 1,880 crore in Q1FY23.

Tech Mahindra's peers Infosys, TCS, Wipro, Mindtree, and HCL Tech have already announced their Q2 results earlier this month. It will be keenly watched how Tech Mahindra performs in Q2.

What to expect from Tech Mahindra's Q2 results?

For the second quarter of FY23, Axis Securities in its preview report said, "We expect revenue to grow by 3.4% QoQ aided by ramp-up on the new deal wins," adding," margins likely to expand aided by higher off-shoring and favourable currency mix."

Among key monitorable as per Axis Securities are --- Deal TCVs and pipeline from the communication vertical; Pricing scenario; Attrition; Outlook on growth/margins/DSO day; and commentary on the 5G rollout.

Meanwhile, in its Q2 preview report, stock brokerage Sharekhan analysts said, "The company is expected to report soft CC revenue growth of 2.5% q-o-q led by organic growth of 2.1% q-o-q and 0.4% from full benefit of Thirdware acquisition. Tech Mahindra is likely to have cross currency impact of 190 bps."

Further, Sharekhan's note said, "We expect EBIT margins to improve slightly by 18 bps q-o-q due to full impact of wage revision largely offering improvement in utilization and rationalisation of business from low margin deals."

On the stock, Sharekhan has given a 'buy' rating with a target price of 1,220 apiece on Tech Mahindra.

 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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Published: 22 Oct 2022, 09:25 PM IST
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