Views on Tech Mahindra Ltd 4QFY2017 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research- IT, Angel Broking):

"For 4QFY2017, the company posted bad set of numbers. For the quarter, sales came in at US$1,131mn V/s 1,129mn expected, registering a QoQ growth of 1.3%. On rupee front the sales is expected to come in at INR 7,495cr V/s INR 7,533cr expected, a QoQ de-growth of 0.8%. On Constant Currency (CC) terms, the company posted a 0.9% QoQ growth during the quarter.

In terms of geography, the USA was main dampener; it constituted 45.1% of sales V/s 46.7% of sales in 3QFY2016, while ROW was the key driver constituting 25.3% of sales V/s 23.9% of sales in 3QFY2016. In terms, of the industries, the manufacturing came in at 19.2% of sales v/s 18.4% of sales in 3QFY2016. BFSI was the main driver, which lead the segment contributes around 14.1% of sales V/s 13.1% of sales in 3QFY2016.

On, operating front, a 4.2% QoQ rise in the cost of revenues, resulted in the EBDITA and EBIT Margins coming at 12.0% and 8.2% V/s 15.5% and 12.2% expected respectively, QoQ dip of 371 and 421 bps. Thus the Adj. net profit came in at INR 588cr V/s INR 741cr expected QoQ dip of 30.4%.

On employee productivity matrix, the company had utiilsatation excluding trainee, was 81% V/s 83% in 3QFY2016, while overall was stagnant at 77%. Attrition was 17% V/s 18% in 3QFY2016. We maintain our BUY rating on the stock, on back of valuations."

Shares of TECH MAHINDRA LTD. was last trading in BSE at Rs.430.75 as compared to the previous close of Rs. 426.75. The total number of shares traded during the day was 229723 in over 3246 trades.

The stock hit an intraday high of Rs. 434 and intraday low of 420.6. The net turnover during the day was Rs. 98128586.

Source : Equity Bulls

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