At 13 times its FY21 EPS, TechM stock is available at attractive valuations

How Tech Mahindra's telecom segment pans out is what the Street is cautious about

After two quarters of weak performance, Tech Mahindra’s (TechM) December 2018 quarter (Q3) results beat the Street’s expectations on all fronts. Its revenue moved up 4.3 per cent sequentially in constant currency (CC) terms, versus analysts’ expectations of around 3 per cent, thanks to its key telecom segment.

Having over 40 per cent share in overall earnings, revenue for the telecom segment rose 2.6 per cent sequentially. How this segment pans out is what the Street is cautious about.

The management is hopeful of supportive performance by the sector, led by 5G. “Outlook for the communication sector is strong. This is a