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Tech Mahindra: Satyam rescued the bottom-line - Views on News from Equitymaster

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Tech Mahindra: Satyam rescued the bottom-line

May 21, 2013

Tech Mahindra announced its fourth quarter results for the financial year 2012-2013 (4QFY13). The company reported a 6.5% QoQ growth in consolidated sales and a 36.8% QoQ growth in net profits. Here is our analysis of the results.

Performance summary
  • Consolidated net sales grew by 6.5% QoQ. In terms of US dollar revenues, growth in sales was 7.2% QoQ.
  • EBITDA margin decreased by 1.1% QoQ to 19.9% at the end of 4QFY13. That was because operating expenditure (Cost of Services and Selling, General and Administrative Expenses) grew at a higher pace of 7.9% QoQ as compared to the sequential increase in revenues. On an absolute basis, EBITDA grew by 1% QoQ.
  • Despite the muted growth at top-line level, the bottom-line grew by 36.8% QoQ. That was because of a much higher contribution to the share of profits from its associate Mahindra Satyam. Contribution from the latter improved by 468% QoQ. The increase in net profits would have been even higher had the effective tax rate not increased from 24.5% in 3QFY13 to 26.6% in 4QFY13.
  • The Company's employee base stood at 47,498 at the end of March 2013 as compared to 49,059 at the end of December 2012.
  • The total number of active clients increased from 140 at the end of 3QFY13 to 151 at the end of 4QFY13.
  • A dividend of Rs 5 per equity share (yield of 0.5%) was recommended by the Board of Directors.

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