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R u p e e h a s a l l t h e s a y …
Mahindra Satyam reported Q3FY12 numbers with revenue of | 1718
crore and PAT of | 308 crore (I-direct estimate: | 1720 crore and | 175
crore respectively). Rupee revenue growth of 8.9% QoQ was aided by a
depreciating rupee while dollar revenues declined ~1.5% QoQ. EBITDA
margins expanded 87 bps QoQ. Wage inflation impacted margins by 230
bps and were largely offset by rupee depreciation. Core operational
performance was subdued with volume declining 1.3% QoQ, active client
base declining by 11 and five of $10 million accounts moving to lower
subgroups. We have raised our estimates to account for the quarterly
beat but maintain our HOLD rating.
ƒ Earnings summary
Q3FY12 US$ revenues declined 1.5% QoQ to $325 million ($330
million in Q2) while in rupees they grew 8.9% QoQ (9% estimate) to
| 1719 crore helped by rupee depreciation. PAT increased 29.4%
QoQ to | 308.4 crore from | 238.2 crore in Q2 and above our | 175
crore estimate. However, note that reported PAT was aided by | 151
crore other income primarily comprising f/x (| 60 crore), shift to
fixed deposit from mutual funds and interest on FDs (| 91 crore).
ƒ Operating metric highlights
Across geographies, revenues from North America (50% of Q3FY12
revenues), Europe (25%) and rest of the world (25%) declined 5.3%
QoQ and grew 2.6% QoQ each, respectively. Across verticals, BFSI
showed traction with 8.9% QoQ growth, followed by others, which
grew 8.3% QoQ whereas both healthcare and manufacturing
declined 15.6% QoQ and 1.5%QoQ, respectively.
V a l u a t i o n
We have modelled rupee revenue growth of 26.7%/14.8% for
FY12E/FY13E, respectively, (FY10-FY13E CAGR of 13.3%) and 4.2% EPS
decline for FY13E. We continue to value the stock at 9.1x our FY13E EPS
estimate of | 8.2 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 �� ��
R u p e e h a s a l l t h e s a y …
Mahindra Satyam reported Q3FY12 numbers with revenue of | 1718
crore and PAT of | 308 crore (I-direct estimate: | 1720 crore and | 175
crore respectively). Rupee revenue growth of 8.9% QoQ was aided by a
depreciating rupee while dollar revenues declined ~1.5% QoQ. EBITDA
margins expanded 87 bps QoQ. Wage inflation impacted margins by 230
bps and were largely offset by rupee depreciation. Core operational
performance was subdued with volume declining 1.3% QoQ, active client
base declining by 11 and five of $10 million accounts moving to lower
subgroups. We have raised our estimates to account for the quarterly
beat but maintain our HOLD rating.
ƒ Earnings summary
Q3FY12 US$ revenues declined 1.5% QoQ to $325 million ($330
million in Q2) while in rupees they grew 8.9% QoQ (9% estimate) to
| 1719 crore helped by rupee depreciation. PAT increased 29.4%
QoQ to | 308.4 crore from | 238.2 crore in Q2 and above our | 175
crore estimate. However, note that reported PAT was aided by | 151
crore other income primarily comprising f/x (| 60 crore), shift to
fixed deposit from mutual funds and interest on FDs (| 91 crore).
ƒ Operating metric highlights
Across geographies, revenues from North America (50% of Q3FY12
revenues), Europe (25%) and rest of the world (25%) declined 5.3%
QoQ and grew 2.6% QoQ each, respectively. Across verticals, BFSI
showed traction with 8.9% QoQ growth, followed by others, which
grew 8.3% QoQ whereas both healthcare and manufacturing
declined 15.6% QoQ and 1.5%QoQ, respectively.
V a l u a t i o n
We have modelled rupee revenue growth of 26.7%/14.8% for
FY12E/FY13E, respectively, (FY10-FY13E CAGR of 13.3%) and 4.2% EPS
decline for FY13E. We continue to value the stock at 9.1x our FY13E EPS
estimate of | 8.2 i.e. at | 75 and maintain our HOLD rating.
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