Dear All,
Forwarding you the Result Flash on Tech Mahindra for 4QFY2011.
Tech Mahindra reported decent set of 4QFY2011 results which were broadly inline with our expectations. The dollar revenues came in at US$278.5mn (vs. our expectation of US$270.6mn), up 3.6% qoq on the back of volume growth of 2.5% qoq as well as favorable cross currency movement qoq. The primary growth driver was Non-BT revenues which grew by 9.0% qoq, while BT business declined by 3.5% qoq. In rupee terms, the revenues came in at `1,262cr (vs. our expectation of `1,227cr), up 4.2% qoq. The EBITDA margins stood at 20.5 %(vs. our expectation of 21.0%), almost flat qoq as utilisation level declined to 74% from 76% in 3QFY2011 due to strong net addition of 4,125 employees. PAT, excluding share from Satyam, came in at `206.5cr (vs. our expectation of `206.2cr). PAT, including share from Satyam, came in at `92.1cr.
4QFY2011: Result highlights (Consolidated)
| (Rs cr) | 4QFY11 | 4QFY11E | % Var | 3QFY11 | % chg (qoq) | 4QFY10 | % chg (yoy) |
| Net revenue | 1,262 | 1,227 | 2.8 | 1,211 | 4.2 | 1,183 | 6.6 |
| EBITDA | 259 | 258 | 0.5 | 250 | 3.7 | 279 | (7.1) |
| EBITDA margin (%) | 20.5 | 21.0 | (48)bp | 20.6 | (9)bp | 23.6 | (303)bp |
| PAT* | 207 | 206 | 0.1 | 205 | 0.5 | 227 | (9.0) |
Source: Company, Angel Research; Note: *Excluding share from Mahindra Satyam
Key Highlights:
· Hiring stood robust at 4,125 net additions, out of which ~2,500 were hired in Africa for the Bharti Airtel contract. The total employee base of the company now stands at 38,333.
· Utilization level declined to 74% from 76%in 3QFY2011 because of strong net employee adds.
· Attrition rates declined to 25% from 30% in 3QFY2011.
· The client pyramid of the company saw slight movement on the negative side as one client from US$25-50mn bracket moved to US$20-25mn bracket. Also, one client from US$2-5mn bracket moved to US$1-2mn bracket. However, one client from the former bracket moved to US$5-10mn bracket.
· Active client increased by two qoq, from 126 to 128
· BT revenues now account for 41% of the company’s revenue down from 44% in 3QFY2011.
· Debt on books stand at `1,223cr; Cash stands at `305cr
The results were modest and inline with our expectations. The only growth driver for the company is Non-BT business. The stock is currently under review and we will be releasing a detailed result note shortly.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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