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TECH MAHINDRA Announces Quarterly Results (1QFY20); Net Profit Up 5.0%

Wed, 31 Jul

TECH MAHINDRA has announced its results for the quarter ended June 2019. Here is a detailed performance review of the same:

TECH MAHINDRA Quarterly Financials

No. of Mths Qtr. Ending		3 Jun-18*	3 Mar-19*	3 Jun-19*	QoQ Change	YoY Change
Net Sales	Rs m	82,763	88,923	86,530	-2.7%	4.6%
Other income	Rs m	1,114	1,671	3,413	104.2%	206.3%
Turnover	Rs m	83,877	90,594	89,943	-0.7%	7.2%
Expenses	Rs m	69,194	72,536	73,389	1.2%	6.1%
Gross profit	Rs m	13,569	16,115	13,141	-18.5%	-3.2%
Depreciation	Rs m	2,808	2,704	3,213	18.8%	14.4%
Interest	Rs m	305	281	454	61.6%	48.8%
Profit before tax	Rs m	11,571	14,801	12,887	-12.9%	11.4%
Tax	Rs m	2,457	3,535	3,318	-6.1%	35.0%
Profit after tax	Rs m	9,113	11,266	9,569	-15.1%	5.0%
Gross profit margin	%	16.4	18.1	15.2
Effective tax rate	%	21.2	23.9	25.7
Net profit margin	%	10.9	12.4	10.6

Year-on-Year Performance:

• The company's operating income during the quarter grew 4.6% on a year-on-year (YoY) basis. The expenses were up by 6.1% YoY during the same period.
• The company's operating profit declined by 3.2% YoY during the quarter. Consequently, operating profit margins witnessed a decline and stood at 15.2% in 1QFY20 as against 16.4% in 1QFY19.
• Depreciation charges increased by 14.4% and finance costs increased by 48.8% YoY, respectively.
• Other income increased by 206.3% YoY during the quarter.
• Net profit for the quarter increased by 5.0% YoY. Net profit margins during the quarter declined from 10.9% in 1QFY19 to 10.6% in 1QFY20.

Quarter-on-Quarter Performance:

• The company's operating income during the quarter fell 2.7% on a quarter-on-quarter (QoQ) basis. The expenses were up by 1.2% QoQ during the same period.
• The company's operating profit declined by 18.5% QoQ during the quarter. Consequently, operating profit margins witnessed a decline and stood at 15.2% in 1QFY20 as against 18.1% in 4QFY19.
• Net profit for the quarter declined by 15.1% QoQ, while net profit margins declined from 12.4% in 4QFY19 to 10.6% in 1QFY20.

To see how TECH MAHINDRA has performed over the last eight quarters,please visit here.

TECH MAHINDRA Share Price Performance

Over the last one year,TECH MAHINDRA share price has moved down from Rs 680.3 to Rs 618.0, registering a Loss of Rs 62.3 or around 9.2%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,451.8 (down 1.2%). Over the last one year it has moved up from 14,527.2 to 15,451.8, a gain of 925 points (up 6.4%).

Overall, the S&P BSE SENSEX is down 0.7% over the year.

Current Valuations

At the current price of Rs 618.0, the price to earnings (P/E) ratio of TECH MAHINDRA stands at 13.8 times its trailing twelve months earnings, while its price to book value (P/BV) ratio stands at 3.0 times.