Views on Tech Mahindra 4QFY2015 Results - Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - IT, Angel Broking) on Tech Mahindra 4QFY2015 Results:

For 4QFY2015, Tech Mahindra announced results much lower than expectations, mainly on the EBITDA and net profit front. The sales came in at US$984mn V/s US$989mn, expected V/s US$924mn, a qoq growth of 6.5%. Revenue contribution from its acquisitions like LCC & SOFGEN was at US$100mn rupee terms, adjusting for which the qoq de-growth was 4.3%.

In rupee term, the company, posted sales of INR 6117cr V/s INR 6159cr expected V/s INR 5752cr during 3QFY2015, qoq growth of 6.3%. On the operating front, the EBITDA margins came in at 15.2% V/s 18.4% expected and V/s 20.2% in 3QFY2015, a dip of 499bps qoq. On the reason for the dip in the EBITDA margins are the utilization levels, which came in at 71% V/s 74% in 3QFY2015. Thus, Adj. PAT came in at INR 472cr V/s INR 751cr expected and V/s INR 777cr, a qoq de-growth of 39.2%. Apart from the lower than expected EBDITA margins, a Forex loss of INR 154.1cr booked also impacted the net profit during the quarter. We maintain our BUY rating on the stock.

Shares of TECH MAHINDRA LTD. was last trading in BSE at Rs.553.7 as compared to the previous close of Rs. 557.25. The total number of shares traded during the day was 165630 in over 3882 trades.

The stock hit an intraday high of Rs. 558.5 and intraday low of 551. The net turnover during the day was Rs. 91795875.

Source : Equity Bulls

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