TechM- Screaming Buy (Sales note from domestic brokerage) - A | DM Stocks

TechM- Screaming Buy (Sales note from domestic brokerage)

- Analyst meet on 3rd Feb likely announcement of new CEO

- 5 capex cycle (in past 3G,4G cycle TECHM communication revenue have grown in high double digit CAGR)

- Dividend payout at 95% (highest in IT pack) , FCF yield at 4.5%

- management won’t do any acquisitions ahead

- pressure from M&M board to stay in best corporate governance practice (financial frugal, less acquisitions, margin recovery, market cap focus)

- TECHM has always done better in margin recovery play and now margins at bottom

- stock trades at 15x on FY24 (inline with its 10 year average multiple)

- higher payout, 5G capex, margin recovery play makes a strong buy at these cheap valuations

- stock is down 40% from top

- better choice than Wipro