Views on Tech Mahindra 1QFY2016 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - IT, Angel Broking) on Tech Mahindra 1QFY2016 Results:

"Tech Mahindra announced its 1QFY2016 results, which were marginally above on sales front and ahead of expectations on the net profit. The company posted a 0.5% qoq growth in USD revenues to US$ 989mn V/s US$ 983mn expected and V/s US$ 984mn in 4QFY2015. In rupee terms, the revenues came in at INR 6,294cr V/s INR 6,242cr expected and V/s INR 6,117cr in 4QFY2015, a qoq growth of 2.9%. The impact on the quarterly results was mainly on back of dip in the communication domain which was 52.7% V/s 55.3% of sales in 4QFY2015, whereas the other domains showed an improvement or same performance as 4QFY2015.

The EBDITA came in at 14.9% in line with expectations, while the EBIT was 12.1% again in line with expectation of 12.1%, registering a dip of 32bp and 26bps qoq respectively. Consequently, the PAT came in at INR 676cr V/s INR 556cr expected and V/s INR 472cr in 4QFY2015 a growth of 43.2% qoq. This was mainly on back of other income, which came in at INR 136.6cr (on back of forex gains) V/s a loss of INR 87cr. On the operating front, the utilization levels were 74% in 1QFY2016 V/s 71% in 4QFY2015, while the attrition stood steady at 19.1%. The client addition during the quarter remained tepid, with total clients at 770 in 1QFY2016 V/s 767 in 4QFY2015. We maintain our BUY rating on the stock with a target price of INR 646."

Shares of TECH MAHINDRA LTD. was last trading in BSE at Rs.522.3 as compared to the previous close of Rs. 519. The total number of shares traded during the day was 428428 in over 9637 trades.

The stock hit an intraday high of Rs. 527.4 and intraday low of 518. The net turnover during the day was Rs. 224016322.

Source : Equity Bulls

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