Tech Mahindra hit a six-year high post its very good numbers for Q1FY14. Its consolidated net profit was at Rs.1320 crore, up over 8% sequentially. This was supported by a 9% rise in revenue at Rs.686 crore but also thanks to the forex gain of Rs.134 crore. EBITDA margin improved 130 bps (QoQ) at 21.1%, also courtesy depreciating rupee but this was offset to some extent by the higher expenses. The company hopes to sustain the current margins through the year despite the wage hikes. What has also buoyed the sentiments for this stock is the increase in FII limit from current 35% to 45% and this could mark its entry into the MSCI Global Standard Index. A big step forward after expulsion of Satyam in July.

The robust performance was led by good growth in manufacturing, media and entertainment. Manufacturing vertical, second biggest after telecom (contributed 48% to Q1 revenue), rose 5.7% (QoQ) while media and entertainment rose 9%. The growth in telecom was more muted at 2.5%. Its active client count at end of Q1 stood at 567 v/s 516 in Q4. Employee strength is at 83,063. Cash and cash equivalents was at Rs.3655 crore. Attrition was at 15%, down from 16% in Q4. In terms of geographical breakup, America leads with 45% share in revenue, followed by Europe at 32% and Rest of the World (RoW) at 22%. The company now seems to be safely on its way to growth and investors on the lookout for growth stories seem to have latched onto the stock for the long haul.