Mahindra Satyam - Q4FY13 Result Review - Angel Broking

For 4QFY2013, Mahindra Satyam reported net profit while disappointed on the operational front. The dollar revenues came in US$359cr, up 1% qoq. In INR terms, revenues came in at Rs. 1,936cr, down 0.2% qoq. The company's operational performance was below expectations as EBITDA margin declined by ~145bp qoq to 20.1% (vs. our expectation of margin inching up qoq), due to subdued revenue growth. The company reported exceptional gain of Rs. 134cr during the quarter, adjusting for this profit came in at Rs. 320cr, down 14% qoq impacted by lower other income of Rs. 72cr as against Rs. 111cr in 3QFY2013. We wait for management clarity on decline in operational margins as the company continued to deliver operational exuberance with decent volume growth since last five quarters (till 3QFY2013).

Management indicated that they are in penultimate stage in the merger process of Tech Mahindra and Mahindra Satyam as it has been approved by the Bombay High Court, while it awaits the Andhra Pradesh High Court approval.

We remain positive on the stock and the target price is currently under review.

Source : Equity Bulls

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