Tech Mahindra Q2 preview: Enterprise segment may impact overall growth

At the bourses, Tech Mahindra has performed better than the benchmark S&P BSE Sensex. The stock has gained a little over 1 per cent during Q2FY20 as against nearly 2 per cent rise in the Sensex

A sharp moderation in the growth of the Enterprise segment is likely to keep overall growth trajectory of Tech Mahindra (TechM) for the September 2019 quarter in check. While headwinds from wage hikes and visa costs are largely behind, up-front costs incurred in new deal execution should put pressure on margins for Q2FY20, say analysts. The IT services company is slated to release its September quarter results later in the day.

While TechM’s growth in Communications vertical (40 per cent of revenues) has been recovering in recent quarters, a sharp moderation in growth in the Enterprise segment has kept overall growth