Tech Mahindra (TECHM) Q4 15/16 earnings summary

Executive summary

• FY16 consolidated revenue rose 17.1% YoY to ₹264,942 million; PAT increased 19% to ₹31,180 million, while EBITDA margin was 16.3% versus 18.5% in FY15.

• Customer count reached 807 from 767; global headcount was 105,432, up from 103,281.

• The strategic focus shifted toward digital, design and data transformation through the DIGITALL initiative, alongside investment in engineering and network services capabilities.

Financial highlights

• Consolidated revenue was ₹264,942 million, up 17.1% YoY in rupees and 9.5% in US-dollar terms; PAT was ₹31,180 million versus ₹26,277 million.

• Consolidated PBIT was ₹41,130 million versus ₹36,872 million; EBITDA was ₹43,184 million versus ₹41,921 million.

• Standalone revenue increased 9.4% to ₹209,698 million; PAT rose to ₹32,200 million from ₹22,562 million.

• Consolidated operating cash flow was ₹32,132 million versus ₹24,479 million; cash and cash equivalents ended FY16 at ₹23,933 million.

Outlook and guidance

• Management expected digital adoption, IT-services renewal cycles, improved offshore spending and cross-selling to support growth; network services and combined IT/network delivery were identified as opportunities.

• The DIGITALL transformation aimed to reposition offerings around digital, design and data; management also cited potential from Big Data, mobility, cloud, security, platforms and engineering.

• Industry outlook cited NASSCOM’s FY17 forecast of 10–12% growth for Indian software-services exports and continued double-digit industry growth expectations, subject to global volatility and currency movements.