Tech Mahindra Ltd's Q4FY18 consolidated net profit rises 29.6% qoq to Rs1,222cr : Beats Estimates

The company’s consolidated revenue stood at Rs8,054cr, up 3.6% qoq and 7.5% yoy.

May 25, 2018 10:05 IST India Infoline Research Team

Tech Mahindra Ltd Q4FY18

Consolidated Results Q4FY18: (Rs in cr)

Q4FY18 QoQ (%)
Revenue 8,054.50 3.6
EBITDA 1,411.90 11.7
EBITDA Margin (%) 17.5 120
Net Profit (adjusted) 1,222.10 29.6
***EBITDA margin change is bps


Reco. Price


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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.

Technical View:

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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