Tech Mahindra on a high

Tech Mahindra is on a roll today! The stock has hit a six-year high at Rs.1329 and it currently remains strongly in the green, up 4% at Rs.1316.The stock just about missed hitting the upper circuit limit by a whisker at Rs.1329.35.

The stock has zoomed up after it posted a set of 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 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.