Tech Mahindra gets pounded
The market is hugely disappointed with the Q4FY15 performance of Tech Mahindra. The stock is currently the top loser of the day, down currently almost 13% at Rs.561 levels. Its intra day low is at Rs.550.10. Coincidentally, last year-same day, 27th May’14, the stock had hit a new low at Rs.446.75.
The company’s performance was hugely disappointing. Its consolidated net profit for the quarter came in at Rs.472 crore, down by a big 41% (QoQ) though total income was up 6% at Rs.6117 crore. What pushed down the bottomline were – forex loss of Rs.154 crore and a 23% rise in employee benefit expense at Rs.3256 crore, which is almost 50% of the total income earned. Consequently, EBIT came in 25% down at Rs.756 crore and margins slipped from 17.7% to 12.4%.
The Q4 performance was affected due to slow decision making in some projects, volatile oil prices, uncertainty in US, slow demand and cross currency impact – mainly due to volatility in currencies of Australia, Euro and Canada.