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Tech Mahindra Disappointing Results + Stock Drops

July 20, 2007

BT Revenue Disappoints Tepid sales; margin above expectations – Revenue grew ~7% qoq to US$211mn – below expectation of US$218mn. Revenue in INR terms was flat at Rs.8.76b. EBITDA margin declined 340bps (vs. our expectation of 410bps decline). Lower taxes led to net profit of Rs.1.7b – marginally ahead in spite of lower sales growth.

Tech Mahindra’s consolidated net profit declined 13.1% to Rs 170.30 crore in Q1 June 2007 over Q4 March 2007. Revenue rose 0.2% to Rs 876.30 crore over March 2007.

The stock is down to Rs 1428. However, its a good BUY on decline.

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