Tech Mahindra Limited
NSE Symbol TECHM
CONSOLIDATED RESULTS FOR FY 2011 - REVIEW
Tech Mahindra Ltd has performed below par in FY 2011 on a consolidated basis.
Net Sales has gone up to Rs.5140.23 cr – up by 11.13% from FY 2010 and up by 15.13% from FY 2009.
Total Expenditure in FY 11 has however increased much more (proportionately) to Rs.4280.40 Cr – up by 18.02% from FY 10 and up by 30.03% from FY 09.
Profit from Operations has therefore come down to Rs.859.83 Cr – down by 13.90% from FY 10 and also down by 26.68% from FY 09.
On the basis of lower interest charge and higher other income - Profit before tax has slightly improved to Rs.877.40 Cr – up by 3.57% from FY 10; but down by 22.52% from FY 09.
Net Profit is Rs.745.82 Cr – up by 6.07% from FY 10 but down by 26.49% from FY 09.
Due to Shares of Associates of Rs.99.60 Cr - Consolidated Net Profit is down to Rs.644.19 Cr – down by 8.03% from FY 10; and down by 36.50% from FY 09.
On a face value of Rs.10 – the Basic EPS is down to Rs.51.6 – against Rs.58.1 in FY 10; and Rs.83.41 in FY 09.
The Last Market Price of the share is Rs.687. On this basis, the PE Ratio comes to 13.31 – which reflects the lower sentiment in the scrip – due to the uncertainties over merger with Mahindra Satyam and also due to a lack lustre performance in FY 11. However, the Management is quite confident of better operations in FY 12 – based on Mahindra Satyam’s improving performance and its expanding BPO and other operations.
CONSOLIDATED RESULTS TABLE :
| FY11-CS | |||
| Net Sales | 514,023.00 | 462,540.00 | 446,470.00 |
| Total Expenditure | 428,040.00 | 362,672.00 | 329,194.00 |
| Profit from Operations | 85,983.00 | 99,868.00 | 117,276.00 |
| Other Income | 11,745.00 | 7,537.00 | -3,780.00 |
| Interest | 9,988.00 | 21,841.00 | 250 |
| Profit before tax | 87,740.00 | 84,715.00 | 113,246.00 |
| Tax Expense | 13,158.00 | 14,398.00 | 11,790.00 |
| Net Profit | 74,582.00 | 70,317.00 | 101,456.00 |
| Minority Interest | 203 | 275 | 10 |
| Shares of Associates | 9,960.00 | - | - |
| Consolidated Net Profit | 64,419.00 | 70,042.00 | 101,446.00 |
| Face Value (in Rs.) | 10 | 10 | 10 |
| Paid-up Equity | 12,596.00 | 12,232.00 | 12,173.00 |
| Reserves | 292,052.00 | 256,977.00 | 191,511.00 |
| Basic EPS | 51.6 | 58.1 | 83.41 |
| Diluted EPS | 49.34 | 54.37 | 78.82 |
| Public holding % | 28.32 | 25.15 | 16.68 |
QUARTERLY (STAND ALONE RESULTS)
Net Sales for Q4 FY 11 is Rs.1198.93 cr – up by 1.5% from Q3; down by 19.63% from Q2; UP by 9.63% from Q1 and up by 3.01% from Q4 of FY 10. On an annualized basis (Q4 FY 11x 4), it is LESS THAN FY 10 NET SALES BY 3.42%. thus, the sales have plateau-ed in Q4 FY 11 for over 4 qtrs. It is even less than FY 10 average, though marginally up by 3.01% from Q4 FY 10.
Total Expenditure is Rs.1015.77 cr – up by 4.8% from Q3; down by 18.96% from Q2; up by 8.48% from Q1; and up by 9.78% from Q4 FY 10. On annualized basis, Q4 FY 11 is less than FY 11 (Non-consolidated) expenditure by 2.68% .
Profit from Operations for Q4 FY 11 is Rs.183.16 Cr – down by 13.6% from Q3; down by 23.16% from Q2; Up by 16.51% from Q1; and down by 23.23% from Q4 FY 10. On annualized basis Q4 OPT is less than FY 10 OPT by 7.34%. Thus, the sales and OPT are both lack lustre in Q4.
Profit before tax is Rs.192.43 Cr – down by 19.61% from Q3; down by 12.77% from Q2; Up by 25.22% from Q1; but down by 32.62% from Q4 FY 10. On annualized basis, Q4 FY 11 is less than FY 10 by 4.5%.
Based on significantly lower Tax expense - Net Profit is slightly better at Rs.182.48 cr – down by 9.67% from Q3; down by 0.8% from Q2; up by 42.21% from Q1 ; but still down by 21.29% from Q4 FY 10. On annualized basis, it is up by 4.77% from FY 10.
Basic EPS for Q4 FY 11 is Rs.14.61, compared to Rs.16.23 in Q3; Rs.14.85 in Q2; Rs.10.41 in Q1; Rs.19 in Q4 FY 10; and Rs.55.81 in FY 10 (Non-consolidated).
QTRLY RESULTS TABLE :
| TECH MAHINDRA | 31-Mar-11 | 31-Dec-10 | 30-Sep-10 | 30-Jun-10 | 31-Mar-10 | |
| Net Sales | 119893 | 118123 | 149177 | 109357 | 116387 | 496549 |
| Total Expenditure | 101577 | 96923 | 125341 | 93636 | 92530 | 417483 |
| Profit from Operations | 18316 | 21200 | 23836 | 15721 | 23857 | 79066 |
| Other Income | 3047 | 5267 | 922 | 2286 | 7797 | 11523 |
| Interest | 2120 | 2530 | 2699 | 2640 | 3097 | 9988 |
| Profit before tax | 19243 | 23937 | 22059 | 15367 | 28557 | 80601 |
| Tax expense | 995 | 3735 | 3664 | 2535 | 5374 | 10929 |
| Net Profit | 18248 | 20202 | 18395 | 12832 | 23183 | 69672 |
| Face Value (In Rs | 10 | 10 | 10 | 10 | 10 | 10 |
| Basic EPS | 14.61 | 16.23 | 14.85 | 10.41 | 19 | 55.81 |
ANNOUNCEMENTS TO NSE
26-05-2011 consolidated Results for the year ended on 31-MAR-2011 as follows: Net Sales of Rs. 514023 lacs for year ending on 31-MAR-2011 against Rs. 462540 lacs for the year ending on 31-MAR-2010. Net Profit / (Loss) of Rs. 64419 lacs for the year ending on 31-MAR-2011 against Rs. 70042 lacs for the year ending on 31-MAR-2010.
26-05-2011 standalone Results for the year ended on 31-MAR-2011 as follows: Net Sales of Rs. 496549 lacs for year ending on 31-MAR-2011 against Rs. 448376 lacs for the year ending on 31-MAR-2010. Net Profit / (Loss) of Rs. 69672 lacs for the year ending on 31-MAR-2011 against Rs. 74285 lacs for the year ending on 31-MAR-2010.
26-05-2011 press release dated May 26, 2011, titled "Tech Mahindra enters billion dollar league".
26-05-2011 Tech Mahindra recommended dividend of 40% (i.e. Rs.4 per Equity Share of Rs. 10 each), for the financial year ended March 31, 2011, subject to approval by members of the Company at the forthcoming Annual General Meeting.
02-05-2011 press release dated May 02, 2011, titled "TECH MAHINDRA SETS UP BPO OPERATIONS IN PHILIPPINES".
25-04-2011 press release dated April 25, 2011, titled "Tech Mahindra Honored by AT&T as Outstanding Supplier".
21-01-2011 press release dated January 21, 2011, titled "Tech Mahindra Q3 Net profit up 10.4% at 206.1 crores".
WHAT COMPANY SAYS
Tech Mahindra, India’s fifth largest software exporter, today announced consolidated financial results for its fourth-quarter and Year ended March 31, 2011.
For the Quarter, Tech Mahindra’s associate company Mahindra Satyam reported improved results with operating margins improving from 6.4 % in third quarter of FY11 to 13.0 % in the fourth quarter of FY11. Mahindra Satyam also announced the successful settlement of the US class action suit at a cost of USD 125 mn. Including this exceptional cost Mahindra Satyam reported a loss for the quarter. Tech Mahindra’s PAT including share of associate Company’s loss of Rs 114.4 crores for the quarter was at Rs 92.1 crores.
Consolidated Financial highlights for the Quarter (INR)
• Revenue at INR 1,261.5 crores; up 6.6% YoY and 4.2% QoQ
• Operating Profit (EBIDTA) was INR 259.0 crore; down 7.1% YoY and up 3.7% QoQ
• PAT excluding share of associate company’s loss was Rs 206.5 crores; down 9.0% YoY and up 0.5% QoQ
• Earnings per Share (EPS) was Rs 7.39 for the quarter ended March 31, 2011
Highlights for the YEAR (INR)
• Revenue at INR 5,140.2 crores; up 11.1% YoY
• EBIDTA was INR 1,003.3 crores; down 11.4% YoY
• PAT excluding share of associate company’s loss was Rs 743.7 crores; up 6.2% YoY
• Earnings per Share (EPS) was Rs 51.6 for the year ended March 31, 2011
Other Highlights for the quarter and Year ended March 31, 2011
• The Board of Directors recommended a dividend of Rs 4 per share (40%) for FY 2010-11
• Added 4,809 personnel during the year taking total headcount to 38,333. Software Professional headcount stood at 26,282, BPO at 11,011 and Support staff at 1,040
• Earnings per Share (EPS) was Rs 51.6 for the year ended March 31, 2011
Other Highlights for the quarter and Year ended March 31, 2011
• The Board of Directors recommended a dividend of Rs 4 per share (40%) for FY 2010-11
• Added 4,809 personnel during the year taking total headcount to 38,333. Software Professional headcount stood at 26,282, BPO at 11,011 and Support staff at 1,040
• Added 4,125 personnel during the quarter, of which 2,522 were in BPO
• Debt was Rs 1,222.7 crores as of March 31, 2011
• Cash and Cash equivalent was Rs 304.7 crores on balance sheet as of March 31, 2011
• 15 new clients added during the year, taking the Active Client count to 128
• 15 new clients added during the year, taking the Active Client count to 128
Business Highlights for Quarter ended March 31, 2011
Tech Mahindra expanded its executive team with the appointment of Mr. Amitava Roy as Chief Operating Officer, responsible for service delivery of BT. Amitava has successfully led several businesses in Telecom, Wireless, Enterprise Consulting and Outsourcing and has worked with several leading IT companies in a career spanning 3 decades
Tech Mahindra’s capabilities in cloud service were significantly boosted by creating of a cloud competence lab in Hinjewadi Pune. This Lab will enable Tech Mahindra’s customers to benefit from best of the breed technologies and assist them in their business objectives of revenue enhancement from cloud based services
Progressing on its engagement with Airtel Africa, Tech Mahindra has already commenced BPO operations in five countries, while remaining two are expected to go live this quarter. This has helped Tech Mahindra create a permanent base of operation in African continent
Continuing on its Geographic diversification, Tech Mahindra launched its BPO operations in Philippines through a large multimillion dollar engagement with a leading full-service telecommunications company in the Philippines.
Inaugurated state-of-the art development centre in Sirius Business Park, Bonn, Germany, encompassing fully-equipped infrastructure to service clients in Germany as well as Central Europe.
Anand Mahindra, Chairman, Tech Mahindra said, “This has been a year of recovery from a severe slowdown in the telecom vertical. Our growth this year is due to our unwavering focus on customer centricity and our ability to challenge conventional logic to better serve the needs of our customers.”
Vineet Nayyar, Vice Chairman, MD and CEO of Tech Mahindra said, “Our recent wins lend credence to our belief that we are well positioned to meet the changing market needs. We are hopeful of being able to continue this momentum into the next year”
Key Operational Wins/Deliverables :
Secured a five-year Managed Services deal from a leading mobile telecommunications service provider in Australia. Tech Mahindra will be a strategic partner, responsible for consolidating and managing the entire systems stack and associated services. It will also enable the customer to achieve greater efficiency to improve its end customer experience.
In partnership with a leading telecom equipment manufacturer , was chosen by a leading Middle East service provider to assist in transformation of their legacy platform. This will help customer augment the value of its core business system, reduce the time to market, ability to launch new services and enhance the customer experience.
Tech Mahindra through its VAS subsidiary Canvas M, has been chosen as a strategic partner by a leading Telecom Equipment Manufacturer for roll out of 2G / 3G / LTE devices for a leading US Telecom. Tech Mahindra will be engaged in testing at its device testing lab in Noida. This pre certification will enable a faster roll out for the US Operator's network.
Partnered with one of the leading telecommunications service providers in Europe to setup its Enterprise Service Business. Tech Mahindra worked with the service provider to facilitate Webservice based integration between its multiple IT systems and further provide a single access point to integrate new systems with minimal configurations. This will enable the operator to manage its IT requirements like Communication, Security, Performance and operation to launch new products and services with faster time to market.
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