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Tech Mahindra: A Bad End to the Year - Views on News from Equitymaster
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Tech Mahindra: A Bad End to the Year
May 29, 2017

Tech Mahindra has announced its fourth quarter and full year results for FY17. The company reported a 0.8% QoQ fall in consolidated sales and a 31.8% QoQ fall in net profits. Here is our analysis of the results.

Performance summary
  • Consolidated sales fell by 0.8% QoQ in rupee terms. In US$ terms, revenues grew by 1.4% QoQ.
  • Operating expenses increased by 3.5% QoQ. The operating profit fell by 24.3% QoQ. The operating margin fell sequentially to 12%.
  • Due to the poor operating performance in the quarter, the net profit decreased by 31.8% QoQ.
  • The company has declared a dividend of Rs 9 per share.

    Consolidated Financial Snapshot
    (Rs m) 3QFY17 4QFY17 Change FY16 FY17 Change
    Sales 75,575 74,950 -0.8% 264,942 291,408 10.0%
    Expenditure 63,710 65,963 3.5% 222,236 249,564 12.3%
    Operating profit (EBITDA) 11,865 8,987 -24.3% 42,707 41,844 -2.0%
    Operating profit margin (%) 15.7% 12.0%   16.1% 14.4%  
    Other income 1,552 2,379 53.3% 4,394 7,776 77.0%
    Finance cost 349 318 -8.9% 970 1,286 32.6%
    Depreciation 2,480 2,835 14.3% 7,589 9,781 28.9%
    Exceptional items 0 0   0 0  
    Profit before tax 10,588 8,213 -22.4% 38,541 38,553 0.0%
    Tax 2,141 2,316 8.2% 8,301 10,021 20.7%
    Minority interest -223 48   338 245 -27.5%
    Profit from assosiates 2 0   26 -23  
    Profit after tax/(loss) 8,671 5,849 -32.5% 29,928 28,263 -5.6%
    Other comprehensive income 158 170   2,368 833  
    Net profit 8,830 6,019 -31.8% 32,296 29,097 -9.9%
    Net profit margin (%) 11.7% 8.0%   12.2% 10.0%  
    No of shares (m)         974.1  
    Diluted earnings per share         29.9  
    P/E ratio #         12.7  

    # On a trailing 12-months earnings


    Revenue Breakup
    (Rs m) 3QFY17 4QFY17 Change
    On the basis of industry      
    Communications 35,747 34,702 -2.9%
    Manufacturing 13,906 14,390 3.5%
    Tech, Media and Entertainment 4,837 4,647 -3.9%
    BFSI 9,900 10,568 6.7%
    Retail, Transport and Logistics 5,744 4,872 -15.2%
    Others 5,441 5,771 6.1%
    On the basis of geography      
    Americas 35,294 33,802 -4.2%
    Europe 22,219 22,185 -0.2%
    Rest of the world 18,062 18,962 5.0%
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