Tech Mahindra Ltd

The domestic equity benchmarks ended with major losses on Friday, snapping a five-day rising streak. The Nifty settled below 22,450 mark after hitting the day's high of 22,620.40 in early trade. Financial services, bank and private bank stocks declined while consumer durables, media and realty shares advanced.

As per provisional closing data, the barometer index, the S&P BSE Sensex dropped 609.28 points or 0.82% to 73,730.16. The Nifty 50 index declined 150.40 points or 0.67% to 22,419.95.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.83% and the S&P BSE Small-Cap index added 0.27%.

The market breadth was positive. On the BSE, 2,000 shares rose and 1,782 shares fell. A total of 131 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 1.81% to 10.93.

Politics:

The second phase of voting, scheduled for April 26, encompasses 89 constituencies across 13 states and Union territories. The BJP seeks a third consecutive term, while the opposition, including the Congress, has united under the banner of the Indian National Developmental Inclusive Alliance (INDIA) bloc to thwart PM Modi's re-election. The extensive Lok Sabha elections 2024 span seven phases from April 19 to June 1, with the results set to be announced on June 4.

Buzzing Index:

The Nifty Financial Services index slipped 0.89% to 21,354.05. The index rallied 3.09% in five trading sessions.

Bajaj Finance (down 7.73%), Bajaj Finserv (down 3.52%), Kotak Mahindra Bank (down 2.07%), SBI Life Insurance Company (down 2.02%), State Bank of India (down 1.4%), HDFC Life Insurance Company (down 1.15%), SBI Cards & Payment Services (down 1.05%), ICICI Lombard General Insurance Company (down 0.83%), ICICI Bank (down 0.53%) and Power Finance Corporation (down 0.22%) declined.

On the other hand, IDFC (up 2.33%), Muthoot Finance (up 1.99%) and Cholamandalam Investment & Finance Company (up 1.42%) edged higher.

Bajaj Finance tumbled 7.73% after the NBFC’s loan losses and provisions jumped 53% to Rs 1,310 crore in Q4 FY24. The non-banking financial company (NBFC) reported 21.11% increase in consolidated net profit to Rs 3,824.53 crore on a 31.36% jump in total income to Rs 14,931.98 crore in Q4 FY24 as compared with Q4 FY23.

Bajaj Finserv slipped 3.52%. The NBFC said that its consolidated net profit jumped 20% to Rs 2118.53 crore in Q4 FY24 as compared with Rs 1768.95 crore in Q4 FY23. Total income increased 35.63% YoY to Rs 32041.93 crore in Q4 FY24.

Stocks in Spotlight:

Tech Mahindra surged 7.47% after the IT major's consolidated net profit jumped 29.51% to Rs 661 crore in Q4 FY24 as against Rs 510.4 crore reported in Q3 FY24. Revenue from operations stood at Rs 12,871.3 crore in the March quarter, down 1.76% from Rs 13,101.3 crore recorded in the preceding quarter of FY24.

L&T Technology Services dropped 7.86%. The company said that its consolidated net profit increased 1.4% to Rs 340.9 crore in Q4 FY24 as compared with Rs 336.2 crore in Q3 FY24. Revenue from operations jumped 7.04% to Rs 2,537.5 crore in the quarter ended 31 March 2024 as compared with Rs 2,370.6 crore in the quarter ended 31 December 2023.

IndusInd Bank slipped 3.09%. The private lender's standalone net profit increased 15.01% to Rs 2,346.84 crore on 20.77% rise in total income to Rs 14,699.01 crore in Q4 FY24 over Q4 FY23.

Cyient declined 1.40%. The IT major reported 28.53% rise in consolidated net profit to Rs 189.2 crore on 2.16% increase in revenue from operations to Rs 1,860.8 crore in Q4 FY24 over Q3 FY24.

Som Distilleries & Breweries lost 1.80%. The company’s consolidated net profit jumped 17.97% to Rs 18.84 crore in Q4 FY24 as compared with Rs 15.97 crore in Q4 FY23. Revenue from operations (excluding excise duty) jumped 43.27% to Rs 381.59 crore in Q4 FY24 as compared with Rs 266.34 crore posted in same quarter last year.

Schaeffler India added 1.88% after the company has reported 3.8% rise in standalone net profit to Rs 227.67 crore on a 9.2% increase in net sales to Rs 1,849.22 crore in Q4 FY24 as compared with Q4 FY23.

Zensar Technologies jumped 7.75% after the company’s consolidated net profit jumped 7.17% to Rs 173.3 crore in Q4 FY24 as compared with Rs 161.7 crore in Q3 FY24. Revenue from operations increased 1.41% QoQ to Rs 1,229.7 crore in Q4 FY24.

Supreme Industries advanced 2.37%. The company reported 1.28% fall in consolidated net profit to Rs 354.82 crore on a 15.95% increase in total consolidated income to Rs 3,025.98 crore in Q4 FY24 over Q4 FY23.

Olectra Greentech lost 3.39% after the company reported 49.2% drop in consolidated net profit to Rs 13.71 crore in Q4 FY24 from Rs 27.01 crore in Q4 FY24. Net sales declined by 23.2% YoY to Rs 288.81 crore during the period under review.

Global Markets:

European shares advanced while most of the Asian stocks ended higher on Friday.

Bank of Japan (BOJ) kept monetary policy unchanged. Holding its benchmark policy rate at 0%-0.1%

The BOJ now expects inflation between 2.5% and 3% for fiscal 2024, up from 2.2% to 2.5% in its January forecast.

US stocks dropped on Thursday after data showed a sharp slowdown in economic growth and pointed to persistent inflation.

The US economy grew last quarter at the slowest pace in two years as consumer and government spending cooled amid a sharp pickup in inflation. The US gross domestic product (GDP) increased at a 1.6% annualized rate in January-March 2024. The economy grew at a 3.4% rate in the fourth quarter.

Inflation surged, with the personal consumption expenditures (PCE) price index, excluding food and energy, increasing at a 3.7% rate after rising at 2% in the fourth quarter.

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The benchmark indices traded with substantial losses in afternoon trade. The Nifty hovered below the 22,450 mark after hitting the day's high of 22,620.40 in early trade. Banking stocks declined while consumer durable, media and IT shares advanced.

At 13:29 IST, the barometer index, the S&P BSE Sensex, was down 462.94 points or 0.62% to 73,878.60. The Nifty 50 index lost 125.45 points or 0.56% to 22,444.90.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.63% and the S&P BSE Small-Cap index added 0.41%.

The market breadth was positive. On the BSE, 2,047 shares rose and 1,644 shares fell. A total of 127 shares were unchanged.

Politics:

The second phase of voting, scheduled for April 26, encompasses 89 constituencies across 13 states and Union territories. The BJP seeks a third consecutive term, while the opposition, including the Congress, has united under the banner of the Indian National Developmental Inclusive Alliance (INDIA) bloc to thwart PM Modi's re-election. The extensive Lok Sabha elections 2024 span seven phases from April 19 to June 1, with the results set to be announced on June 4.

Gainers & Losers:

Tech Mahindra (up 8.31%), LTI Mindtree (up 3.74%), Divi’s Laboratories (up 3.70%), Wipro (up 2.43%) and Bajaj Auto (up 2.35%) were major Nifty gainers.

Bajaj Finance (down 8.18%), Shriram Finance (down 5.47%), bajaj Finserv (down 4.06%), Nestle India (down 2.88%) and Mahindra & Mahindra (down 1.90%) were major Nifty losers.

Tech Mahindra surged 8.31% after the IT major's consolidated net profit jumped 29.51% to Rs 661 crore in Q4 FY24 as against Rs 510.4 crore reported in Q3 FY24. Revenue from operations stood at Rs 12,871.3 crore in the March quarter, down 1.76% from Rs 13,101.3 crore recorded in the preceding quarter of FY24.

Stocks in Spotlight:

L&T Technology Services declined 7.74%. The company said that its consolidated net profit increased 1.4% to Rs 340.9 crore in Q4 FY24 as compared with Rs 336.2 crore in Q3 FY24. Revenue from operations jumped 7.04% to Rs 2,537.5 crore in the quarter ended 31 March 2024 as compared with Rs 2,370.6 crore in the quarter ended 31 December 2023.

Som Distilleries & Breweries rose 0.06% after the company’s consolidated net profit jumped 17.97% to Rs 18.84 crore in Q4 FY24 as compared with Rs 15.97 crore in Q4 FY23. Revenue from operations (excluding excise duty) jumped 43.27% to Rs 381.59 crore in Q4 FY24 as compared with Rs 266.34 crore posted in same quarter last year.

Schaeffler India added 2.53% after the company has reported 3.8% rise in standalone net profit to Rs 227.67 crore on a 9.2% increase in net sales to Rs 1,849.22 crore in Q4 FY24 as compared with Q4 FY23.

Zensar Technologies surged 9.17% after the company’s consolidated net profit jumped 7.17% to Rs 173.3 crore in Q4 FY24 as compared with Rs 161.7 crore in Q3 FY24. Revenue from operations increased 1.41% QoQ to Rs 1,229.7 crore in Q4 FY24.

Global Markets:

European shares advanced while Asian stocks declined on Friday after Bank of Japan (BOJ) kept monetary policy unchanged. Holding its benchmark policy rate at 0%-0.1%

The BOJ now expects inflation between 2.5% and 3% for fiscal 2024, up from 2.2% to 2.5% in its January forecast.

US stocks dropped on Thursday after data showed a sharp slowdown in economic growth and pointed to persistent inflation.

The US economy grew last quarter at the slowest pace in two years as consumer and government spending cooled amid a sharp pickup in inflation. The US gross domestic product (GDP) increased at a 1.6% annualized rate in January-March 2024. The economy grew at a 3.4% rate in the fourth quarter.

Inflation surged, with the personal consumption expenditures (PCE) price index, excluding food and energy, increasing at a 3.7% rate after rising at 2% in the fourth quarter.

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Revenue from operations stood at Rs 12,871.3 crore in the March quarter, down 1.76% from Rs 13,101.3 crore recorded in the preceding quarter of FY24.

On a year on year (YoY) basis, Tech Mahindra's net profit dropped 40.86% while revenue fell 6.17% in Q4 FY24.

EBITDA stood at Rs 1,407.8 crore in the quarter ended 31 March 2024, up 22.8% QoQ and down 30.3% YoY. EBITDA margin was at 10.9% in Q4 FY24 as compared to 8.8% in Q3 FY24 and 14.7% in Q4 FY23.

In terms of dollars (USD), revenue stood at $1,548.2 million in Q4 FY24, registering a de-growth of 1.6% QoQ and 7.2% YoY. In constant currency terms, revenue declined by 0.8% QoQ and down 6.4% YoY. Profit after tax was at $79.7 million, up 29.5% QoQ and down 41.5% YoY. Free cash flow was at $129 million in the March quarter.

During the quarter, EBITDA was at $169.2 million, up 22.9% QoQ and down 31.1% YoY. EBITDA margin came in at 10.9% in Q4 FY24, up 220 bps QoQ.

The IT firm secured net new deals worth $500 million in Q4 FY24 as against $381 million in Q3 FY24 and $592 million reported in Q4 FY23.

Total headcount was at 145,455, registering a decline of 1% QoQ and 4.6% YoY. The last twelve month (LTM) IT attrition rate was constant at 10% in Q4 FY24 as compared to Q3 FY24, while in Q4 FY23 attrition rate was 15%.

On full year basis, the company’s consolidated net profit tumbled 51.2% to Rs 2357.8 crore on 2.43% decline in revenue to Rs 51,995.5 crore in FY24 over FY23.

Cash and cash equivalent was at Rs 7,911.5 crore as of 31 March 2024, compared with Rs 7,012.3 crore as of 31 December 2023 and Rs 7,435.1 crore as of 31 March 2023.

Rohit Anand, CFO of Tech Mahindra said, “With another quarter of robust cash generation, we have reported improvement in deal wins and operating margins in Q4FY'24, which has enabled consistent dividend distribution. We are confident that our actions will lead to steady earnings growth in the coming years. We will continue to focus on operational excellence and cost savings to deliver superior shareholder returns.”

Meanwhile, the company’s board has recommended a final dividend of Rs 28 per equity share for FY24. The dividend, if approved, will be paid on or before, 9 August 2024.

Tech Mahindra is focused on leveraging next-generation technologies including 5G, blockchain, cybersecurity, artificial intelligence, and more, to enable end-to-end digital transformation for global customers.

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Tech Mahindra announced the resignation of Manoj Bhat (DIN: 05205447) with effect from end of business day on 17 May 2024, in view of his transition to role of Managing Director & CEO of Mahindra Holidays and Resorts India.

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Tech Mahindra announced that final dividend of Rs 28 per equity share for FY 2024 will be paid on or before 09 August 2024. This dividend is in addition to Interim Dividend of Rs. 12 per equity share paid by the Company in November 2023.

The total dividend for FY 2023-24 will be Rs. 40/- per equity share on par value of Rs. 5/- each i.e. 800%.

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Tech Mahindra announced that the 37th Annual General Meeting (AGM) of the company will be held on 26 July 2024.

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On a year on year (YoY) basis, Tech Mahindra's net profit dropped 40.86% while revenue fell 6.17% in Q4 FY24.

EBITDA stood at Rs 1,407.8 crore in the quarter ended 31 March 2024, up 22.8% QoQ and down 30.3% YoY. EBITDA margin was at 10.9% in Q4 FY24 as compared to 8.8% in Q3 FY24 and 14.7% in Q4 FY23.

In terms of dollars (USD), revenue stood at $1,548.2 million in Q4 FY24, registering a de-growth of 1.6% QoQ and 7.2% YoY. In constant currency terms, revenue declined by 0.8% QoQ and down 6.4% YoY. Profit after tax was at $79.7 million, up 29.5% QoQ and down 41.5% YoY. Free cash flow was at $129 million in the March quarter.

During the quarter, EBITDA was at $169.2 million, up 22.9% QoQ and down 31.1% YoY. EBITDA margin came in at 10.9% in Q4 FY24, up 220 bps QoQ.

The IT firm secured net new deals worth $500 million in Q4 FY24 as against $381 million in Q3 FY24 and $592 million reported in Q4 FY23.

Total headcount was at 145,455, registering a decline of 1% QoQ and 4.6% YoY. The last twelve month (LTM) IT attrition rate was constant at 10% in Q4 FY24 as compared to Q3 FY24, while in Q4 FY23 attrition rate was 15%.

On full year basis, the company’s consolidated net profit tumbled 51.2% to Rs 2357.8 crore on 2.43% decline in revenue to Rs 51,995.5 crore in FY24 over FY23.

Cash and cash equivalent was at Rs 7,911.5 crore as of 31 March 2024, compared with Rs 7,012.3 crore as of 31 December 2023 and Rs 7,435.1 crore as of 31 March 2023.

Rohit Anand, CFO of Tech Mahindra said, “With another quarter of robust cash generation, we have reported improvement in deal wins and operating margins in Q4FY'24, which has enabled consistent dividend distribution. We are confident that our actions will lead to steady earnings growth in the coming years. We will continue to focus on operational excellence and cost savings to deliver superior shareholder returns.”

Meanwhile, the company’s board has recommended a final dividend of Rs 28 per equity share for FY24. The dividend, if approved, will be paid on or before, 9 August 2024.

Tech Mahindra is focused on leveraging next-generation technologies including 5G, blockchain, cybersecurity, artificial intelligence, and more, to enable end-to-end digital transformation for global customers.

Shares of Tech Mahindra added 0.34% to end at Rs 1,190.10 on the BSE.

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Net profit of Tech Mahindra declined 40.86% to Rs 661.00 crore in the quarter ended March 2024 as against Rs 1117.70 crore during the previous quarter ended March 2023. Sales declined 6.17% to Rs 12871.30 crore in the quarter ended March 2024 as against Rs 13718.20 crore during the previous quarter ended March 2023.

For the full year,net profit declined 51.20% to Rs 2357.80 crore in the year ended March 2024 as against Rs 4831.30 crore during the previous year ended March 2023. Sales declined 2.43% to Rs 51995.50 crore in the year ended March 2024 as against Rs 53290.20 crore during the previous year ended March 2023.

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Tech Mahindra announced that the Board of Directors of the Company at its meeting held on 25 April 2024, has recommended a Final dividend of Rs.28 per share (i.e.560%), subject to the approval of the shareholders.

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Tech Mahindra Ltd fell for a fifth straight session today. The stock is quoting at Rs 1243.95, down 0.33% on the day as on 13:19 IST on the NSE. The benchmark NIFTY is up around 0.56% on the day, quoting at 22450.9. The Sensex is at 73984.9, up 0.45%.Tech Mahindra Ltd has eased around 2.24% in last one month.Meanwhile, Nifty IT index of which Tech Mahindra Ltd is a constituent, has eased around 6.9% in last one month and is currently quoting at 34898.15, up 0.32% on the day. The volume in the stock stood at 7.91 lakh shares today, compared to the daily average of 17.74 lakh shares in last one month.

The benchmark April futures contract for the stock is quoting at Rs 1252.55, down 0.43% on the day. Tech Mahindra Ltd jumped 12.76% in last one year as compared to a 29.04% rally in NIFTY and a 22.27% spurt in the Nifty IT index.

The PE of the stock is 53.62 based on TTM earnings ending December 23.

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