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U n c e r t a i n m a c r o s h a d o w s u n d e r l y i n g s t r e n g t h …
Mahindra Satyam reported Q2FY12 numbers, which were generally
ahead of our estimates. US dollar revenues grew 3.2% QoQ, led by
volume growth while rupee revenue growth of 10% QoQ was aided by
the depreciating rupee. Revenue growth was led by BFSI (grew 15.4%
QoQ) and technology, media & entertainment (8.4% QoQ, TME) vertical.
Noticeably, EBITDA margin expansion was modest despite 2.4% interquarter average rupee depreciation as the company pushed in visa cost
and provision for debtors. We have raised our estimates marginally to
account for the quarterly beat and rupee depreciation but macro keeps us
wary and continues to influence our HOLD rating.
ƒ Earnings summary
Q2FY12 US dollar revenues grew 3.2% QoQ (4% QoQ CC) to $330
million while those in rupees grew 10% QoQ (3.3% estimate) to |
1578 crore helped by 4.5% overall volume growth. PAT increased
by 5.8% to | 238 crore from | 225 crore. The company is giving
salary hikes of around 12% offshore and 2.5% onshore in Q3, which
could negatively impact the EBITDA margins by 250-300 bps.
ƒ Operating metric highlights
Across geographies, revenues from North America (52% of Q2FY12
revenues), Europe (24%) and rest of world (24%) grew 7.4% QoQ,
3.2% QoQ and declined 4.7% QoQ, respectively. Across verticals,
BFSI showed traction with 15.4% QoQ growth, followed by TME,
which grew 8.4%QoQ whereas both healthcare and manufacturing
grew by 3.2%QoQ each.
V a l u a t i o n
We have modelled rupee revenue growth of 23.9%/12.7% for
FY12E/FY13E respectively (FY10-FY13E CAGR of 11.8%) and 7.7% EPS
growth for FY13E. We continue to value the stock at 9.6x our FY13E EPS
estimate of | 7.8 i.e. at | 75 and maintain our HOLD rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
U n c e r t a i n m a c r o s h a d o w s u n d e r l y i n g s t r e n g t h …
Mahindra Satyam reported Q2FY12 numbers, which were generally
ahead of our estimates. US dollar revenues grew 3.2% QoQ, led by
volume growth while rupee revenue growth of 10% QoQ was aided by
the depreciating rupee. Revenue growth was led by BFSI (grew 15.4%
QoQ) and technology, media & entertainment (8.4% QoQ, TME) vertical.
Noticeably, EBITDA margin expansion was modest despite 2.4% interquarter average rupee depreciation as the company pushed in visa cost
and provision for debtors. We have raised our estimates marginally to
account for the quarterly beat and rupee depreciation but macro keeps us
wary and continues to influence our HOLD rating.
ƒ Earnings summary
Q2FY12 US dollar revenues grew 3.2% QoQ (4% QoQ CC) to $330
million while those in rupees grew 10% QoQ (3.3% estimate) to |
1578 crore helped by 4.5% overall volume growth. PAT increased
by 5.8% to | 238 crore from | 225 crore. The company is giving
salary hikes of around 12% offshore and 2.5% onshore in Q3, which
could negatively impact the EBITDA margins by 250-300 bps.
ƒ Operating metric highlights
Across geographies, revenues from North America (52% of Q2FY12
revenues), Europe (24%) and rest of world (24%) grew 7.4% QoQ,
3.2% QoQ and declined 4.7% QoQ, respectively. Across verticals,
BFSI showed traction with 15.4% QoQ growth, followed by TME,
which grew 8.4%QoQ whereas both healthcare and manufacturing
grew by 3.2%QoQ each.
V a l u a t i o n
We have modelled rupee revenue growth of 23.9%/12.7% for
FY12E/FY13E respectively (FY10-FY13E CAGR of 11.8%) and 7.7% EPS
growth for FY13E. We continue to value the stock at 9.6x our FY13E EPS
estimate of | 7.8 i.e. at | 75 and maintain our HOLD rating.
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