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).
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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