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TECH MAHINDRA LTD.

NSE : TECHMBSE : 532755ISIN CODE : INE669C01036Industry : IT - Software House : Mahindra & Mahindra
BSE720.10-0.5 (-0.07 %)
PREV CLOSE ( ) 720.60
OPEN PRICE ( ) 721.00
BID PRICE (QTY) 0.00 (0)
OFFER PRICE (QTY) 720.10 (31)
VOLUME 46662
TODAY'S LOW / HIGH ( )719.10 728.00
52 WK LOW / HIGH ( )607.9 846
NSE720.50-0.25 (-0.03 %)
PREV CLOSE( ) 720.75
OPEN PRICE ( ) 724.00
BID PRICE (QTY) 0.00 (0)
OFFER PRICE (QTY) 720.50 (292)
VOLUME 1482881
TODAY'S LOW / HIGH( ) 719.00 729.00
52 WK LOW / HIGH ( )607.15 846.5
AnalystEmailIdniharika@narnolia.comFY19 perf
AnalystNameNiharika Ojha
BSECode532755
CP1DesignationMD & CEO
CP1NameMr. CP Gurnani
CP2DesignationCFO
CP2NameMr. Manoj Bhat
CP3DesignationNA
CP3NameNA
CallDate21 May 2019
DescriptionFY19 performance: The Company ended the year with improved EBITDA margin, better TCV wins and increased the footprint which higher digital revenue. Enterprise grew 10% whereas communication business grew 0.8%YoY. Manufacturing segment is now the billion dollars in annual revenue in FY19 earlier telecom (communication) was only segment being a billion dollar for the company .Manufacturing showed a steady growth of 10%YoY in FY19. The company significant growth came in through digital revenue and now 31%of FY19 revenue came from digital .The growth of digital revenue was almost 41%YoY.the company continue their growth in digital revenue in 4QFY19which stood at 34.1% of the overall revenue, up 4.1%QoQ.In digital, the company is seeing significant mix of business from cyber security, engineering services, device echo system, IoT and in Block chain .The company also getting some traction from 5g rollout. Under capital allocation policy, the company maintain its statement of returning back the excess capital to the shareholder after keeping sufficient cash in balance sheet .The company will do buyback more periodically, keep sufficient reserve for M&A and will continue to declare dividend (35% to 45% dividend payout in FY19)going ahead. The company expects to have healthy cash balance all through FY20. TCV for the company has grown 33%YoY in FY19. 4QFY19 saw a TCV wins of USD 408 million .450million customers added in FY19. The company does not see any impact coming from huawei issue though company works with them .however they are not the companys’ top 10 , 20 customer. Margin performance: Margin for the quarter reported 18.4%, a decline of 90bps mainly driven by onetime expenses (some charges impacted 30 to 40 bps) and cross currency impact of 40 bps in 4QFY19.Excluding one off the normalized EBITDA margin would stand at 18.7% to 18.8% for 4QFY19. The company had its highest ever free cash flow of USD 173 million which is about 109% of PAT .Overall for the year, the company free cash flow is 87% of PAT which has reflected lot of improvement in conversion process. The company expects to continue to focus on it going ahead . Industry wise: Telecom: The company seeing that there is repurposing of some of capital dollar as the telecom service providers will start doing their trail work which though will be small expenses initially but more importantly as they start modernizing the system process and technology it will then move . The company’s strategy which is build around helping people to drive automation and cost down and at the same time start doing transformation that is what is at play . The company is seeing telecom brand is establishing as a leader for the company. Enterprise: 4QFY19 de-growth was on the back of higher 3QFY19 base revenue and also some deferral of project commencement in quarter in healthcare business. Also retail seasonality played out in 4QFY19.The company keeps reasonable confidential of growth in enterprise seeing the TCV wins during the year , pipeline development is robust and also the company exited from some not so profitable deals in FY19 which was one time. The company believes to catch up growth as the funnel is building up for the company however the company expects the growth composition to be little balanced now (expected higher growth earlier in FY20). The company expects BFSI ( part of enterprise) to grow in FY20.The rate of growth is expected to depend on deal signing which may happen in 1QFY20. The company growth outlook remained unchanged however the company expects communication mix to perform better and composition of growth is expected to evenly balanced .
SubjectQ4FY19 EARNING CONFERENCE CALL

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