Tech Mahindra (TECHM) Q4 17/18 earnings summary

Executive summary

• FY18 consolidated revenue ₹307,729m, up 5.6% YoY (9.6% in USD); PAT ₹37,998m, up 35%. Digital contributed ~27% of revenue.

• Reorganization, digital offerings, automation and platform partnerships supported the shift toward connected experiences; year-end headcount was 112,807, versus 117,693 a year earlier.

Financial highlights

• Consolidated EBITDA ₹47,096m versus ₹41,844m; PBT ₹48,788m versus ₹38,530m.

• Standalone service revenue ₹236,612m versus ₹231,654m; PAT ₹39,993m versus ₹30,473m.

• Standalone other income rose to ₹17,307m from ₹8,929m, mainly on higher foreign-exchange gains and gains on asset disposals.

• Consolidated operating cash flow was ₹35,535m versus ₹40,714m; year-end cash and cash equivalents were ₹19,661m versus ₹20,013m.

Outlook and guidance

• Strategic priorities center on Customer Experience Management, Software Transformation, Networks of the Future and IoT, aligned to helping clients run better, change faster and grow greater.

• Gartner forecast 2018 worldwide IT spending growth of 6.2% to $3.7tn and IT services growth of 7.4%; NASSCOM projected Indian IT exports of $135–137bn in FY19, up 7–9%.

• NASSCOM expected FY19 Indian domestic IT revenue growth of 10–12% and annual digital spending growth of 20%.