TECH MAHINDRA Announces Quarterly Results (2QFY21); Net Profit Down 4.3%

Mon, 26 Oct

TECH MAHINDRA has announced its results for the quarter ended September 2020. Here is a detailed performance review of the same:

TECH MAHINDRA Quarterly Financials

No. of Mths Qtr. Ending		3 Sep-19*	3 Jun-20*	3 Sep-20*	QoQ Change	YoY Change
Net Sales	Rs m	90,699	91,063	93,718	2.9%	3.3%
Other income	Rs m	2,163	4,161	1,175	-71.8%	-45.7%
Turnover	Rs m	92,862	95,224	94,893	-0.3%	2.2%
Expenses	Rs m	75,690	78,058	76,688	-1.8%	1.3%
Gross profit	Rs m	15,009	13,005	17,034	31.0%	13.5%
Depreciation	Rs m	3,415	3,832	3,717	-3.0%	8.8%
Interest	Rs m	383	503	399	-20.7%	4.2%
Profit before tax	Rs m	13,374	12,831	14,093	9.8%	5.4%
Tax	Rs m	2,265	3,276	3,462	5.7%	52.8%
Profit after tax	Rs m	11,109	9,555	10,631	11.3%	-4.3%
Gross profit margin	%	16.5	14.3	18.2
Effective tax rate	%	16.9	25.5	24.6
Net profit margin	%	12.0	10.0	11.2

Year-on-Year Performance:

• The company's operating income during the quarter grew 3.3% on a year-on-year (YoY) basis. The expenses were up by 1.3% YoY during the same period.
• The company's operating profit increased by 13.5% YoY during the quarter. Consequently, operating profit margins witnessed a growth and stood at 18.2% in 2QFY21 as against 16.5% in 2QFY20.
• Depreciation charges increased by 8.8% and finance costs increased by 4.2% YoY, respectively.
• Other income declined by 45.7% YoY during the quarter.
• Net profit for the quarter declined by 4.3% YoY. Net profit margins during the quarter declined from 12.0% in 2QFY20 to 11.2% in 2QFY21.

Quarter-on-Quarter Performance:

• The company's operating income during the quarter grew 2.9% on a quarter-on-quarter (QoQ) basis. The expenses were down by 1.8% QoQ during the same period.
• The company's operating profit increased by 31.0% QoQ during the quarter. Consequently, operating profit margins witnessed a growth and stood at 18.2% in 2QFY21 as against 14.3% in 1QFY20.
• Net profit for the quarter increased by 11.3% QoQ, while net profit margins increased from 10.0% in 1QFY20 to 11.2% in 2QFY21.

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

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TECH MAHINDRA Share Price Performance

Over the last one year, TECH MAHINDRA share price has moved up from Rs 720.4 to Rs 833.9, registering a Gain of Rs 113.5 or around 15.8%.

Meanwhile, the S&P BSE IT Index is trading at Rs 21,770.6 (up 0.2%). Over the last one year it has moved up from 14,574.2 to 21,770.6, a gain of 7,196 points (up 49.4%).

Overall, the S&P BSE SENSEX is up 4.2% over the year.

Current Valuations

At the current price of Rs 833.9, the price to earnings (P/E) ratio of TECH MAHINDRA stands at 21.0 times its trailing twelve months earnings, while its price to book value (P/BV) ratio stands at 3.7 times.