4QFY2016 Result Update | IT
June 3, 2016
Tech Mahindra
BUY
CMP
`546
Performance Highlights
Target Price
`700
(` cr)
4QFY16
3QFY16
% chg (QoQ)
4QFY15
% chg (YoY)
Investment Period
12 Months
Net revenue
6,884
6,701
2.7
6,117
12.5
EBITDA
1,161
1,136
2.2
928
25.1
Stock Info
EBITDA margin (%)
16.9
16.9
(8)bp
15.2
170bp
Sector
IT
Adj. PAT
897
759
18.2
472
90.1
Source: Company, Angel Research;
Market Cap (` cr)
53,015
Net Debt (` cr)
(6,370)
Tech Mahindra posted sales of
`6,884cr for 4QFY2016 (V/s
`6,701cr in
Beta
0.7
3QFY2016), which is a QoQ growth of 2.7%. In US$ terms, sales came in at
US$1,023mn (V/s our expectation of US$1,021mn), a QoQ growth of 0.8%. In
52 Week High / Low
582/408
terms of geographies, growth was driven by ROW (accounted for 24.7% of sales
Avg. Daily Volume
225,175
V/s 23.2% of sales in 3QFY2016). In terms of industry, growth was driven by BFSI
Face Value (`)
5
(which accounted for 10.6% of sales V/s 9.8% of sales in 3QFY2016). On the
BSE Sensex
26,843
operating front, the EBDITA margin came in flat on a QoQ basis at 16.9%, while
Nifty
8,219
the EBIT margin stood at 13.7% V/s 14.4% in 3QFY2016. The net profit came in
Reuters Code
TEML.BO
at `897cr V/s `759cr in 3QFY2016, a QoQ growth of 18.2%, mainly driven by a
Bloomberg Code
[email protected]
rise in other income. Other income for the quarter stood at `166cr V/s `64cr in
3QFY2016. We maintain our Buy on the stock.
Shareholding Pattern (%)
Result highlights: Tech Mahindra posted sales of `6,884cr for 4QFY2016 (V/s
Promoters
36.4
`6,701cr in 3QFY2016), which is a QoQ growth of 2.7%. In US$ terms, sales
MF / Banks / Indian Fls
13.0
came in at US$1,023mn (V/s our expectation of US$1,021mn), a QoQ growth of
FII / NRIs / OCBs
38.8
0.8%. In terms of geographies, growth was driven by ROW (accounted for 24.7%
Indian Public / Others
11.8
of sales V/s 23.2% of sales in 3QFY2016). Europe accounted for 28.5% of sales
V/s 28.9% in 3QFY2016, while USA contributed 46.8% of sales V/s 47.8% in
3QFY2016. In terms of industry, growth was driven by BFSI (which accounted for
Abs.(%)
3m 1yr
3yr
10.6% of sales V/s 9.8% of sales in 3QFY2016). On the operating front, the
Sensex
6.2
(1.3)
35.8
EBDITA margin came in flat on a QoQ basis at 16.9%, while the EBIT margin
stood at 13.7% V/s 14.4% in 3QFY2016. The net profit came in at `897cr V/s
Tech Mahindra
18.0
(0.5)
126.0
`759cr in 3QFY2016, a QoQ growth of 18.2%, mainly driven by a rise in other
income. Other income for the quarter stood at `166cr V/s `64cr in 3QFY2016.
3-year price chart
Outlook and valuation: The Management remains confident of reverting back to
800
the original profitability by FY2016-18E. We expect a CAGR of 10.6% and 12.8% in USD
700
600
and INR revenue respectively over FY2016-18E, driven by acquisitions. The PAT is expected
500
to grow at a CAGR of 13.2% over FY2016-18E. We maintain our Buy on the stock.
400
300
Key financials (Consolidated, Indian GAAP)
200
Y/E March (` cr)
FY2015
FY2016
FY2017E
FY2018E
100
Net sales
22,621
26,494
30,347
33,685
0
% chg
20.1
17.1
14.5
11.0
Net profit
2,628
3,118
3,633
3,999
% chg
(10.4)
18.7
16.5
10.1
Source: Company, Angel Research
EBITDA margin (%)
18.4
16.3
17.0
17.0
EPS (`)
27.1
32.2
37.5
41.3
P/E (x)
20.1
17.0
14.6
13.2
P/BV (x)
4.3
3.7
3.2
2.7
RoE (%)
21.5
21.7
21.8
20.7
RoCE (%)
24.0
20.8
22.4
21.9
Sarabjit kour Nangra
EV/Sales (x)
2.3
1.9
1.6
1.3
+91 22 3935 7800 Ext: 6806
EV/EBITDA (x)
12.5
11.4
9.2
7.9
[email protected]
Source: Company, Angel Research; Note: CMP as of June 2, 2016
Please refer to important disclosures at the end of this report
1
Tech Mahindra | 4QFY2016 Result Update
Exhibit 1: 4QFY2016 performance (Consolidated, Indian GAAP)
(` cr)
4QFY16
3QFY16
% chg (QoQ) 4QFY15
% chg (yoy)
FY16
FY15
% chg (YoY)
Net revenue
6,884
6,701
2.7
6,117
12.5
26,494
22,621
17.1
Cost of revenue
4,454
4,607
(3.3)
4,253
4.7
18,323
12,911
41.9
Gross profit
2,429
2,095
16.0
1,864
30.3
8,172
9,710
(15.8)
SG&A expense
1,268
959
32.3
936
35.5
3,853
5,558
(30.7)
EBITDA
1,161
1,136
2.2
928
25.1
4,318
4,152
4.0
Dep. and amortization
218
174
25.4
172
26.5
762
611
24.7
EBIT
944
962
(1.9)
756
24.8
3,556
3,541
0.4
Interest
33
24
35.4
18
83.5
96
30
220.3
Other income
166
64
159.6
(65)
(355.2)
557
106
425.1
PBT
1,077
1,002
7.5
673
60.0
4,017
3,617
11.1
Income taxes
157
233
(32.5)
185
(15.1)
860
960
(10.4)
PAT
919
769
19.6
489
88.0
3,157
2,657
18.8
Minority interest
(24)
10
(342.6)
17
(238.4)
-
14
(100.0)
PAT after minority interest
896
759
18.0
472
89.8
3,157
2,628
20.1
Profit from associates
1
-
-
39
-
Exceptional item
-
-
-
-
-
Reported PAT
897
759
18.2
472
90.1
3,118
2,628
18.7
Adj. PAT
897
759
18.2
472
90.1
3,118
2,628
18.7
Diluted EPS
9.3
7.9
18.2
4.9
90.1
32.2
27.1
18.7
Gross margin (%)
35.3
31.3
403bp
30.5
482bp
30.8
42.9
(1208)bp
EBITDA margin (%)
16.9
16.9
(8)bp
15.2
170bp
16.3
18.4
(206)bp
EBIT margin (%)
13.7
14.4
(65)bp
12.4
135bp
13.4
15.7
(223)bp
PAT margin (%)
13.0
11.3
170bps
7.7
532bp
12.0
11.6
39bp
Source: Company, Angel Research
Exhibit 2: 4QFY2016 - Actual vs Angel estimates
(` cr)
Actual
Estimate
% Var
Net revenue
6,884
6,890
(0.1)
EBITDA margin (%)
16.9
16.6
27.4bps
PAT
897
732
22.6
Source: Company, Angel Research
Revenue growth led by ROW
For 4QFY2016, Tech Mahindra posted sales of
`6,884cr V/s
`6,701cr in
3QFY2016, a QoQ growth of 2.7%. In US$ terms, the company posted sales of
US$1,023mn (V/s our expectation of US$1021mn), a QoQ growth of 0.8%. On
constant currency (CC) basis, revenue grew 1.0% QoQ.
In terms of geographies, growth was driven by ROW where revenues rose 8.2%
QoQ; for the quarter, ROW accounted for 24.7% of sales V/s 23.2% of sales in
3QFY2016. Europe registered a QoQ growth of 0.6% and accounted for 28.5% of
sales V/s 28.9% in 3QFY2016. USA registered a QoQ de-growth of 1.3% (the
region accounted for 46.8% of sales V/s 47.8% of sales in 3QFY2016). In terms of
industry, growth was driven by BFSI which accounted for 10.6% of sales V/s 9.8%
of sales in 3QFY2016; revenues from the segment were up 9.0% QoQ. TME
posted a QoQ growth of 2.1%, while Manufacturing posted a QoQ growth of
0.8%. RTL de-grew by 8.1% QoQ.
June 3, 2016
2
Tech Mahindra | 4QFY2016 Result Update
During the quarter, the Communication vertical’s revenue was flat despite
seasonal strength in Comviva. The company is in the process of cutting down on
non-core/non-profitable business in LCC, which caused a decline in run-rate to
~USD320mn compared to ~USD400mn when the company was acquired.
Growth in the Manufacturing vertical (0.8% QoQ) continued to remain weak on
account of pressure in the oil & gas sector.
Exhibit 3: Trend in revenue growth
1,030.0
0.8%
9.0%
0.4%
8.0%
1,020.0
2.2%
6.5%
7.0%
1,010.0
6.0%
5.0%
1,000.0
0.5%
4.0%
990.0
3.0%
980.0
2.0%
1.0%
970.0
0.0%
960.0
-1.0%
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Sales ( in US $mn)
qoq (%)
Source: Company, Angel Research
Exhibit 4: Growth in industry segments
Particulars
% to revenue
% growth (QoQ)
% growth (YoY)
Telecom
50.9
(0.0)
(4.3)
Manufacturing
17.1
0.8
7.7
TME
7.5
2.1
11.3
BFSI
10.6
9.0
21.1
RTL
6.2
(8.1)
3.9
Others
7.7
2.1
33.4
Source: Company, Angel Research
In terms of geographies, ROW posted a growth of 8.2% QoQ. Europe and the US
posted a 0.6% QoQ and 1.3% QoQ de-growth, respectively. This was the second
consecutive quarter of a decline in Americas and Europe, mainly attributed to the
consolidation exercise in LCC.
Exhibit 5: Growth trend in geographies
Particulars
% to revenue
% growth (QoQ)
% growth (YoY)
Americas
46.8
(1.3)
7.1
Europe
28.5
(0.6)
(0.6)
RoW
24.7
8.2
3.5
Source: Company, Angel Research
June 3, 2016
3
Tech Mahindra | 4QFY2016 Result Update
Hiring and client metrics
During the quarter, the company reported a net reduction of 1,705 employees,
taking its overall headcount to 1,05,432. The BPO headcount currently stands at
27,254 and was the only division to witness additions. Attrition (on LTM basis) was
at 21%.
Exhibit 6: Employee metrics
Particulars
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Software professionals
72,952
71,997
71,657
71,892
72,125
BPO professionals
22,693
24,394
26,513
28,279
27,254
Sales & support
7,636
7,232
7,065
6,966
6,053
Total employees
1,03,281
1,03,673
1,05,235
1,07,137
105,432
Attritions (%)
19
19
20
20
21
Source: Company, Angel Research
Exhibit 7: Trend in utilization rate
78
77
77
77
76
77
75
74
73
74
72
71
70
71
69
68
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Source: Company, Angel Research
The company added 6 new clients during the quarter, taking the active client base
to 807 V/s 801 in 3QFY2016, with 3 clients added in US$20-50mn+ bracket and
others mainly in the US$5-10mn+ bracket.
Exhibit 8: Client metrics
Particulars
4QFY14
1QFY16
2QFY16
3QFY16
4QFY16
Total active clients
770
788
767
801
807
US$1mn-5mn
195
196
195
221
207
US$5mn-10mn
41
40
40
42
49
US$10mn-20mn
24
26
21
26
23
US$20mn-50mn
23
22
22
23
26
US$50mn+
13
14
13
14
14
Source: Company, Angel Research
June 3, 2016
4
Tech Mahindra | 4QFY2016 Result Update
Operating margin expands
On the operating front, the EBDITA came in flat QoQ at 16.9%, while the EBIT
came in at 13.7% V/s 14.4% in 3QFY2016. During the quarter, the headwinds of
wage hike (-100bp) and revenue decline in LCC (-50bp) were offset by efficiency
improvement (+50-60bp) and seasonal strength in Comviva (+50-60bp).
Exhibit 9: Margin trend (%)
40
35
35.3
30
32.0
31.3
30.5
29.3
25
20
16.6
16.9
16.9
15.2
14.9
15
13.7
14.4
10
13.7
12.4
10.7
5
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Gross margin
EBITDA margin
EBIT margin
Source: Company, Angel Research
Investment arguments
Growth prospects robust: The Management is more optimistic about the
Communications vertical (excluding the LCC, where a lot of portfolio
rationalization has taken place). The company has gone through a cycle of decline
over the last 3-4 quarters. However, the stability seen in 4QFY2016, pipeline
building up and discussions with clients has led to increased optimism around the
outlook in the space. In other verticals, like BSFI, where the company’s footprint
has been smaller compared to peers, it has been investing in Digital and specific
product implementation capabilities, helping increased traction. We expect a
CAGR of
10.6% and
12.8% in USD and INR revenue, respectively, over
FY2016-18E.
Deal pipeline healthy: Tech Mahindra remains confident of improving revenue
growth, citing healthy deal pipeline along with pick up in discretionary spending,
primarily in the US. The Management sounded confident of demand from BFSI,
Healthcare, Manufacturing and Retail. Tech Mahindra is following a two-pronged
strategy to expand its enterprise business; ie providing end-to-end offerings in
leadership areas like Manufacturing, and following a niche offerings-led entry
strategy in areas like BFSI where it is a challenger. Better cross-sell of services can
help grow marquee accounts post the recent acquisitions. We expect the enterprise
segment growth to be led by broader revival in the markets and deepening of
existing relationships. During 4QFY2016 the company won deals worth TCV of
US$300mn.
Inorganic growth initiatives to augment well for company: The company has been
active in the M&A space, with it having acquired Satyam a few years back, to
acquiring LCC and Softgen recently. Softgen’s and LCC’s acquisition was
June 3, 2016
5
Tech Mahindra | 4QFY2016 Result Update
consolidated in 4QFY2015. LCC is one of the world’s largest independent global
providers of network engineering services to the telecommunications industry. LCC
is estimated to have annual revenues of more than US$400mn (CY2014), with
workforce of over 5,700 network professionals across five continents and more
than 50 countries. With this acquisition, Tech Mahindra will also be addressing a
rapidly growing market opportunity as telecommunications companies and
enterprises accelerate their network upgrade cycle.
Outlook and valuation
Given the recent acquisitions and healthy order pipeline, the company is expected
to post a healthy US$ and INR CAGR of 10.6% and 12.8%, respectively, over
FY2016-18E. However, the acquisition of LCC will be margin dilutive in the near
term, leading the FY2016 EBDIT margin to drop to 16.3% from 22.2% in FY2014.
The company, given its success in turnaround of its earlier acquisition - Satyam,
believes it would be able to do the same with the recent acquisitions and would be
able to get close to achieving the 20% EBIT levels in future. The company is one of
the fastest growing IT companies. Given the conducive valuation on EV/sales front,
where it trades at a significant discount to its peers, we believe the stock should
witness uptrend once the profitability returns to its mean average. We recommend
a Buy rating on the stock.
Exhibit 10: Key assumptions
FY2017E
FY2018E
Revenue growth (US$)
10.3
11.0
USD-INR rate (realized)
67.5
67.5
Revenue growth (`)
14.5
11.0
EBITDA margin (%)
17.0
17.0
Tax rate (%)
23.4
23.4
EPS growth (%)
16.5
10.1
Source: Company, Angel Research
Exhibit 11: One-year forward PE (x)
800
600
400
200
0
Nov-08
Sep-09
Jul-10
May-11 Mar-12 Dec-12 Oct-13 Aug-14 Jun-15 Apr-16
Price
20
17
14
11
8
Source: Company, Angel Research. Note: P/E includes profits of Mahindra Satyam from FY2012
June 3, 2016
6
Tech Mahindra | 4QFY2016 Result Update
Exhibit 12: Recommendation summary
Company
Reco
CMP Tgt Price Upside
FY2018E FY2018E
FY2016-18E
FY2018E FY2018E
(`)
(`)
(%)
EBITDA (%)
P/E (x)
EPS CAGR (%)
EV/Sales (x)
RoE (%)
HCL Tech
Buy
721
1,000
38.7
20.5
11.3
26.5
1.2
17.9
Infosys
Buy
1,260
1,374
9.0
27.5
17.4
11.0
3.1
22.4
TCS
Buy
2,647
3,004
13.5
28.3
15.7
13.0
3.1
35.5
Tech Mahindra
Buy
546
700
28.1
17.0
13.2
13.2
1.3
20.7
Wipro
Buy
540
680
25.9
23.5
11.8
9.9
1.5
19.6
Source: Company, Angel Research.
Company Background
Tech Mahindra was founded in 1986 as a joint venture between Mahindra Group
and British Telecom (BT) to service the latter. Later on, the company started
servicing other external clients as well (solely in the telecom industry).In June 2009,
Tech Mahindra acquired a 42.7% stake in erstwhile Satyam Computers (now
Mahindra Satyam) and now the latter is entirely merged with the company.
The company has recently acquired the companies - LCC and Softgen. These two
acquisitions have been consolidated in 4QFY2015. LCC is one of the world’s
largest independent global providers of network engineering services to the
telecommunications industry. LCC is estimated to have annual revenues of more
than US$400mn (CY2014), with workforce of over 5,700 network professionals
across five continents and more than 50 countries.
June 3, 2016
7
Tech Mahindra | 4QFY2016 Result Update
Profit and loss statement (Consolidated, Indian GAAP)
Y/E March (` cr)
FY2014
FY2015 FY2016 FY2017E FY2018E
Net sales
14,332
18,831
22,621
26,524
29,177
Cost of revenues
9,001
10,790
11,914
18,036
19,548
Gross profit
5,331
8,042
10,708
8,488
9,628
% of net sales
37.2
42.7
47.3
32.0
33.0
SG&A expenses
2,268
2,459
6,555
4,191
4,668
% of net sales
15.8
13.1
29.0
15.8
16.0
EBITDA
3,063
5,582
4,153
4,297
4,960
% of net sales
21.4
29.6
18.4
16.2
17.0
Depreciation and amortization
390
522
611
716
788
% of net sales
2.7
2.8
2.7
2.7
2.7
EBIT
2,674
5,060
3,541
3,581
4,172
% of net sales
18.7
26.9
15.7
13.5
14.3
Interest expense
92
43
30
30
30
Other inc., net of forex gain/(loss)
212
113
106
106
106
Profit before tax
2,793
5,130
3,618
3,657
4,249
Provision for tax
648
775
960
856
994
% of PBT
23.2
15.1
26.5
23.4
23.4
PAT
2,146
4,355
2,659
2,802
3,255
Exceptional item
160
120
-
-
-
Minority interest
30
14
31
31
31
Reported PAT
1,955
4,461
2,628
2,771
3,224
Adjusted PAT
2,115
2,932
2,628
2,771
3,224
Fully diluted EPS (`)
22.0
30.5
27.4
28.8
33.6
June 3, 2016
8
Tech Mahindra | 4QFY2016 Result Update
Balance sheet (Consolidated, Indian GAAP)
Y/E March (` cr)
FY2014
FY2015
FY2016
FY2017E
FY2018E
Equity capital
234
480
484
484
484
Preference capital
-
-
-
-
-
Share premium
-
-
-
-
-
Profit and loss
8,947
11,768
13,882
16,157
18,796
Other reserves
2
0
0
0
-
Net worth
9,182
12,249
14,367
16,641
19,280
Secured loans
309
621
806
806
806
Unsecured loans
54
54
54
55
56
Total debt
363
675
859
860
861
Other long term liability
376
376
376
377
377
Long-term provisions
414
414
414
415
415
Minority interest
144
160
203
145
145
Amount pending investigation
1,230
895
895
895
895
Total capital employed
11,709
14,768
17,114
19,333
21,973
Gross block
5,460
7,811
8,811
9,811
10,811
Accumulated dep.
(2,866)
(3,477)
(4,239)
(5,058)
(5,968)
Net block
2,594
4,334
4,572
4,753
4,844
Capital WIP
266
266
266
267
268
Total fixed assets
2,861
4,601
4,839
5,020
5,112
Investments
36
2,103
2,103
2,103
2,103
Long term loans and adv.
914
1,306
1,502
1,727
1,986
Interest in TML benefit trust
-
-
-
-
-
Deferred tax asset, net
383
390
390
390
390
Other non-current assets
16
-
-
-
-
Inventories
10
24
11
11
11
Sundry debtors
4,349
5,206
5,987
6,896
7,980
Cash and cash equv.
4,756
2,405
5,127
6,905
9,118
Loans and advances
2,616
3,813
2,998
2,999
2,999
Current investments
-
-
-
-
-
Unbilled revenue
-
-
-
-
-
Sundry creditors
(1,549)
(1,654)
(1,903)
(2,188)
(2,516)
Other liabilities
(1,415)
(1,627)
(1,871)
(2,152)
(2,474)
Provision
(1,267)
(1,799)
(2,068)
(2,379)
(2,736)
Working capital
7,500
6,368
8,280
10,092
12,382
Total capital deployed
11,709
14,768
17,114
19,333
21,973
June 3, 2016
9
Tech Mahindra | 4QFY2016 Result Update
Cash flow statement (Consolidated, Indian GAAP)
Y/E March (` cr)
FY2014
FY2015
FY2016
FY2017E FY2018E
Pre tax profit from operations
3,063
2,659
3,157
3,677
4,043
Depreciation
522
611
762
819
910
Exp. (deffered)/written off/others
-
-
-
-
-
Pre tax cash from operations
3,585
3,270
3,919
4,496
4,952
Other income/prior period ad
233
106
557
557
557
Net cash from operations
3,818
3,376
4,475
5,053
5,509
Tax
(752)
(960)
(860)
(1,123)
(1,235)
Cash profits
3,066
2,417
3,615
3,930
4,274
(Inc)/dec in
Sundry Debtors
(980)
(857)
(781)
(909)
(1,085)
Inventories
1
(15)
13
-
-
Loans and advances
(1,324)
(1,197)
815
(1)
-
Sundry creditors
692
105
248
285
328
Others
(623)
212
244
281
323
Net trade working capital
(2,233)
(1,752)
540
(344)
(434)
Cashflow from operating activities
832
665
4,155
3,586
3,840
(Inc)/dec in fixed assets
(369)
(1,740)
(238)
(182)
(91)
(Inc)/dec in investments
-
(2,067)
-
-
-
(Inc)/dec in other non current assets
104
16
-
-
-
Cashflow from investing activities
(265)
(3,791)
(238)
(182)
(91)
Inc/(dec) in debt
490
(311)
(185)
(1)
(1)
Inc/(dec) in deferred revenue
-
-
-
-
-
Inc/(dec) in equity/premium
(2)
1
-
-
0
Inc/(dec) in minority interest
(9)
(16)
(43)
59
-
Addition to reser. on amalgamation
-
-
-
-
-
Dividends
(231)
(679)
(1,359)
(1,359)
(1,359)
Others
479
1,781
392
(325)
(176)
Cashflow from financing activities
726
775
(1,195)
(1,626)
(1,535)
Cash generated/(utilised)
1,294
(2,351)
2,722
1,778
2,213
Cash at start of the year
3,463
4,756
2,405
5,127
6,905
Cash at end of the year
4756
2405
5127
6905
9118
June 3, 2016
10
Tech Mahindra | 4QFY2016 Result Update
Key Ratios
Y/E March
FY2014
FY2015
FY2016
FY2017E
FY2018E
Valuation ratio (x)
P/E (on FDEPS)
18.0
20.1
17.0
14.6
13.2
P/CEPS
14.9
16.3
13.6
11.9
10.8
P/BVPS
5.8
4.3
3.7
3.2
2.7
Dividend yield (%)
0.9
0.9
2.2
1.1
1.3
EV/Sales
2.6
2.3
1.9
1.6
1.3
EV/EBITDA
11.8
12.5
11.4
9.2
7.9
EV/Total assets
17.2
11.3
10.2
9.5
8.9
Per share data (`)
EPS
30.3
27.1
32.2
37.5
41.3
Cash EPS
36.7
33.5
40.1
46.0
50.7
Dividend
5.0
5.0
12.0
6.0
7.0
Book value
94.9
126.6
148.4
171.9
199.2
Dupont analysis
Tax retention ratio (PAT/PBT)
0.8
0.7
0.8
0.8
0.8
Cost of debt (PBT/EBIT)
1.0
1.0
1.1
1.1
1.1
EBIT margin (EBIT/Sales)
0.2
0.2
0.1
0.1
0.1
Asset turnover ratio (Sales/Assets)
6.6
4.9
5.5
6.0
6.6
Leverage ratio (Assets/Equity)
0.3
0.4
0.3
0.3
0.3
Operating ROE (%)
33.0
21.5
21.7
21.8
20.7
Return ratios (%)
RoCE (pre-tax)
31.3
24.0
20.8
22.4
21.9
Angel RoIC
54.8
29.3
30.3
35.7
38.3
RoE
31.9
21.5
21.7
21.8
20.7
Turnover ratios( x)
Asset turnover (fixed assets)
6.6
4.9
5.5
6.0
6.6
Receivables days
78
92
89
89
91
Payable days
26
29
28
28
29
June 3, 2016
11
Tech Mahindra | 4QFY2016 Result Update
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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/dealing in securities Market. Angel or its associates including its relatives/analyst do not hold any financial interest/beneficial
ownership of more than 1% in the company covered by Analyst. Angel or its associates/analyst has not received any compensation /
managed or co-managed public offering of securities of the company covered by Analyst during the past twelve months. Angel/analyst
has not served as an officer, director or employee of company covered by Analyst and has not been engaged in market making activity
of the company covered by Analyst.
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Disclosure of Interest Statement
Tech Mahindra
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors
Ratings (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
over 12 months investment period):
Reduce (-5% to -15%)
Sell (< -15%)
June 3, 2016
12