Tech Mahindra Ltd's Q4FY19 consolidated net profit declines 5.9% qoq to Rs1,133cr : Misses Estimates

The company’s consolidated revenue stood at Rs8,892cr, down 0.6% qoq but up 10.4% yoy.

May 21, 2019 10:05 IST India Infoline Research Team

Tech Mahindra Ltd Q4FY19

Consolidated Results Q4FY19: (Rs in cr)

Q4FY19 QoQ (%)
Revenue 8,892.30 [0.6]
EBIT 1,368.30 [4.9]
EBIT Margin (%) 15.4 [70]
Net Profit (adjusted) 1,132.50 [5.9]
***EBIT margin change is bps
Tech Mahindra reported lower than expected numbers for Q4FY19 on all fronts. Revenues declined by 0.6% qoq to Rs8,892cr against median consensus estimate of Rs9,014cr. Revenue in dollar terms grew by 0.5% qoq to USD1,268mn. EBIT came in at Rs1,368cr, down 4.9% qoq against median consensus estimate of Rs1,415cr. EBIT margin contracted by 70bps qoq to 15.4%. PAT declined by 5.9% qoq to Rs1,133cr against median consensus estimates of Rs1,159cr.
  • Revenue decline was on account of Enterprise business declining by ~2% qoq which negated the 4.4% qoq growth in Telecom business.
  • The management attributed the decline in Enterprise business to certain projects coming to end and deferment in signings.
  • Enterprise business was impacted by decline in others (-9.3% qoq, which is likely due to healthcare), Retail, transport, logistics (-4.0% qoq) and BFSI (-1.7% qoq).
  • Geographically, Americas (-1.6% qoq) was weak along with Europe (-0.5% qoq). RoW was up 5.6% qoq.
  • Top 20 clients grew by ~3% qoq with clients in the top 11-20 slot (+6.2% qoq) contributing most to the growth.
  • Utilization including trainees declined to 82% (-100bps qoq).

Technical View:

Tech Mahindra Ltd ended at Rs. 773.45, down by 5.55 points or 0.71%, from its previous close of Rs. 779 on the BSE.
The scrip opened at Rs. 784 and touched a high and low of Rs. 784.80 and Rs. 769.45, respectively. A total of, 17,96,384 (NSE+BSE) shares have traded on the counter. The stock traded above its 50 DMA.

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