Tech Mahindra on the rise

The market is very obviously enthused with the performance of Tech Mahindra. The stock is currently the top gainer on the bourses, breaching the 10% UC briefly at Rs.527.15 and is now at Rs.524 levels, up over 9%. Volumes have jumped up over 5 times. Its 52-week high is at Rs.653.80.

The company for Q4Fy16 posted a 18% (QoQ) rise in consolidated net profit at Rs.897 crore and this jump was thanks to the forex gain, higher other income and lower tax outgo. The company made a forex gain of Rs.64 crore v/s a forex loss of Rs.10 crore in Q3. Other income showed a smart 38% jump at Rs.102 crore while tax outgo reduced by 32% (QoQ).

The company topline showed a marginal 3% jump at Rs.6884 crore while dollar revenue rose by just 0.75% to $1023 million. Its EBIT was down 2% at Rs.944 crore and margins showed a decline from 14.3% to 13.7%.

Meanwhile the company announced that it has decided not to go ahead with plans of setting up a payment bank. The company had received an approval from RBI for setting up the bank in August’15. The company has declared a total dividend of Rs.12/share which includes the special dividend of Rs.6/share for FY16.