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Tech Mahindra out with its Q4 result: Hold


Tech Mahindra out with its Q4 result: Hold
Tech Mahindra reported its March 2011 quarter result. The company joined the billion dollar club with revenues reporting at Rs 5,140 crore, consolidated. However Net Profit fell by 59% on a year-to-year basis, due to settlements of Satyam's cases. The broad performance was in line with analyst expectation.

The operating profit margin stood at 20.5%. Utilization level fell from 76% in December 2010 quarters to 74% in March 2011 quarter. This was due to net addition of 4,125 employees. As the management of the company acknowledged during the press conference that when new employees join, it takes some time to train them.


According to a report by Angel Broker's the primary growth driver was non-BT revenue, which grew by 9.0% qoq, while BT business declined by 3.5% qoq.

During the quarter revenue increased by 6.6% from Rs 1,183 crore in March Quarter of 2010 to Rs 1,261.5 crore in March quarter of 2011. Revenue growth for the year was at 11.1% from Rs 4,625.4 crore last year.

Declining business from BT of Britain, a top client, also impacted business growth. Excluding BT, the company witnessed revenue growth of 27 per cent for the full year and nine per cent on a sequential basis. BT"s contribution to revenues for the quarter was 41 per cent down from 44 per cent last quarter.


The company's 200 day moving average has been on a declining trend over the last one year. The same has been the case for 100 day moving averages. The 50 day moving average is witnessing an up-trend since the end of April. Although there is no clear uptrend as of now, it took a down trend since middle of May.

Caution would be a better option under the circumstances, but the stock should be kept under monitor as it has the potential to rise.


OneIndia Money DISCLAIMER: OneIndia Money provides you with information covering shares, futures and options based on broker's reports as stated on various media. Investors are, however, warned that they should NOT take any buy or sell decision based on these views expressed in the article. Investors should consult their own financial and share advisors before taking purchase or sale decisions. OneIndia Money does not take any responsibility for any losses incurred by investors who take their cues from the above article.

Story first published: Friday, May 27, 2011, 11:21 [IST]
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