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Tech Mahindra: Our Revised View - Views on News from Equitymaster
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Tech Mahindra: Our Revised View
Aug 2, 2017

Tech Mahindra has announced its first quarter results for FY18. The company reported a 2.1% QoQ decline in consolidated sales and a 35.8% QoQ growth in net profits. Here is our analysis of the results.

Performance summary
  • Consolidated sales fell by 2.1% QoQ in rupee terms. In US$ terms, revenue was up 0.6% QoQ.
  • Operating expenses decreased by 3% QoQ. The operating profit grew by 4% QoQ. The operating margin improved sequentially to 12.7%.
  • The 72.6% QoQ jump in other income and a 16.2% QoQ decline in depreciation, also contributed to the bottomline performance. The net profit increased by 35.8% QoQ. The net margin improved to 10.9%.

    Consolidated Financials
    (Rs m) 4QFY17 1QFY18 Change
    Sales 74,950 73,361 -2.1%
    Expenditure 65,963 64,014 -3.0%
    Operating profit (EBITDA) 8,987 9,347 4.0%
    Operating profit margin (%) 12.0% 12.7%  
    Other income 2,379 4,107 72.6%
    Finance cost 318 370 16.2%
    Depreciation 2,835 2,468 -12.9%
    Exceptional items 0 0  
    Profit before tax 8,213 10,616 29.3%
    Tax 2,316 2,698 16.5%
    Minority interest 17 -68  
    Profit from assosiates 0 0  
    Profit after tax/(loss) 5,880 7,986 35.8%
    Net profit margin (%) 7.8% 10.9%  
    No of shares (m)   974.1  
    Diluted earnings per share   29.4  
    P/E ratio #   13.7  

    # On a trailing 12-months earnings basis


    Revenue Breakup
    (Rs m) 4QFY17 1QFY18 Change
    By Industry      
    Communications 34,702 33,159 -4.4%
    Manufacturing 14,390 14,159 -1.6%
    Technology, Media and Entertainment 4,647 4,402 -5.3%
    BFSI 10,568 10,564 0.0%
    Retail, Transport and Logistics 4,872 4,989 2.4%
    Others 5,771 6,089 5.5%
    By Geography      
    Americas 33,802 34,333 1.6%
    Europe 22,185 21,862 -1.5%
    Rest of the world 18,962 17,166 -9.5%
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