Tech Mahindra reported a good set of numbers for Q4FY18. Revenues grew by 3.6% qoq to Rs8,055cr against analyst estimate of Rs7,990cr. Revenue in Dollar terms grew by 2.9% qoq to USD1,244.3mn. EBITDA came in at Rs1,412cr, up 11.7% qoq against consensus estimate of Rs1,346cr. EBITDA margin expanded by 120bps qoq to 17.5%. PAT increased by 29.6% qoq to Rs1,222cr against analyst estimates of Rs940cr.
Sustained performance of Technology, media & entertainment and manufacturing verticals drove overall top-line growth. Technology, media & entertainment was up 15.6% qoq on a higher base (grew by ~13% in Q3FY18. This is likely due to revenue from IP deals.
Manufacturing grew above company average for consecutive quarter, up 4% qoq. Communication disappointed with flat performance, Banking was up 0.6% qoq. Retail was down 10.1% qoq after three quarters of growth in FY18.
Among geographies, North America continued strong run after rebounding in Q3FY18; N. America was up 4% qoq after growing 6.2% in Q3FY18. Europe remained muted with 2.2% qoq growth, while RoW was up 1.6% qoq.
Top-20 clients grew by 4.5% qoq, Top-10 grew by 1.4% qoq and Top-5 grew by 2.9% qoq.
EBITDA margin expansion was on account of 105bps qoq decline in employee cost. This may be owing to higher quantum of IP revenues recognized during the quarter.
Attrition rate stood at 18% for Q4FY18 vs. 17% in Q3FY18. Utilisation rate improved to 84% from 83% in Q3FY18.
Other income increased from Rs226cr in Q3FY18 to Rs451cr in Q4FY18. This was on account of 163.8% jump in Interest, Dividend & Misc. income to Rs125cr.
Tech Mahindra Ltd is currently trading at Rs. 702.45, down by 7.9 points or 1.11% from its previous closing of Rs. 710.35 on the BSE.
The scrip opened at Rs. 711.55 and has touched a high and low of Rs. 718.30 and Rs. 696.95 respectively. So far 37,23,150 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 50 DMA.
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