Tech Mahindra (TECHM) Q4 06/07 earnings summary

Executive summary

• FY07 marked a major expansion phase: consolidated revenue grew 136% and adjusted PAT before exceptional items and minority interest rose 160%; the year included an IPO, new service offerings and a landmark BT deal.

• A five-year BT agreement, estimated at US$1bn in revenue, was secured to support global managed services for business customers.

Financial highlights

• Consolidated revenue was Rs 29,290.36m versus Rs 12,426.66m YoY; total income reached Rs 29,367.30m versus Rs 12,766.79m.

• Consolidated PAT before exceptional items and minority interest was Rs 6,126.19m, up 160% YoY; reported net profit was Rs 875.93m after the exceptional charge and minority interest.

• Consolidated PBT was Rs 6,866.46m versus Rs 2,621.35m; reported EPS was Rs 10.56 basic and Rs 9.32 diluted, versus Rs 22.77 and Rs 18.72, respectively.

Outlook and guidance

• Telecom outsourcing demand was supported by operators’ need to lower costs, speed product launches and shift to converged, next-generation networks; management planned to deepen telecom services and invest in competitive strengths.

• The BT five-year global sourcing deal was expected to generate estimated revenue of US$1bn, alongside a joint global delivery organization.