Target: ₹1,940

CMP: ₹1,773.25

We met the company CFO Srinivasan Nadadhur to understand the demand environment and outlook.

The management indicated that revenue recovery trends remain in line with its expectations with some positive bias. While several clients have shown improvement, some clients continue to face specific challenges.

The digital segment, which was a major laggard, should stabilise and recover from hereon (on a q-o-q basis).From an outlook perspective, Q3 will be an important quarter for the digital segment. Revenue of the analytics business is expected to remain soft due to weakness in the digital segment.

The company is seeing increased adoption and traction in the Digital and Customer Operations segments, followed by Financial Markets. While there might be some cannibalisation of existing revenue due to technology interventions, medium-to-long-term implications should be positive for the company.

Transition to the new CEO and MD, Kapil Jain, is currently underway, with co-founders gradually taking a back seat from running day-to-day operations.

We have tweaked our FY24 forex assumptions and incorporated the FY23 annual report resulting in a minor change (less than 0.5 per cent) in FY24-26 EPS. We retain Buy with an unchanged TP of ₹1,940 (15x September-25E EPS).

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