Motilal Oswal Recommends Buying This Tech Stock For A 29% Yield
Target price
The current market price (CMP) of Mphasis is Rs. 3025. Motilal Oswal has estimated a target price for the stock at Rs. 3900. The company is expected to offer a 29% upside in 1 year.
| Stock market outlook | |
|---|---|
| Current market price (CMP) | Rs. 3025 |
| Target price | Rs.3900 |
| 1 year back | 29.00% |
Business Performance
The company’s turnover increased by 7.8% QoQ CC. Growth was led by TMT (+14.5%) and BFS (+10.2% QoQ), while Insurance, Logistics & Transportation, and Other grew 8.9%, 5.3 % and -0.7%, respectively. MPHL’s performance in 3QFY22 was driven by 9% CC QoQ growth in the Direct business, while DXC declined again and now accounts for 5.4% of revenue. The EBIT margin, adjusted for the one-off M&A charge, stood at 15.9% (+10bp QoQ) despite an 80bp slowdown in stock options. It announced a new net TCV transaction of US$335 million at 3QFY22.
Comments from Motilal Oswal
Commenting on the stock’s potential, Motilal Oswal said, “With management reiterating its industry-leading growth forecast in the Direct business, we expect the exceptional growth in the Direct business to continue ( FY22-24E CAGR of 19.6%). technology spend We increased our FY22-24E EPS estimate by 1-5% to account for higher growth in the Direct business and positive margin feedback. approximately 2,600 employees and plans to increase hiring, which suggests good visibility.
About the company
Mphasis works with design and architecture to deliver a portfolio of next-generation offerings and services that combine our deep domain expertise with cutting-edge technology. Their domain-contextualized offerings are embedded in deep technology and they are powered by the Mphasis Tribes and Squads model. Their cross-functional teams are focused on evolving next-gen offerings. Reported EBIT margin remained stable QoQ, despite a 100-150 basis point impact from utilization and an 80 basis point impact from stock options. Margin tailwinds include more recent hiring, improved pricing, and cost leverage.
(Also read: Motilal Oswal suggests buying this pharmaceutical stock for a 19% upside, in 1 year, with a target price of Rs. 4240)
Warning
The stock above was taken from Motilal Oswal’s brokerage report. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article.