Mahindra Satyam Q4 margins expected to be flat

By Reema Tendulkar, Research Analyst at CNBC-TV18

Mahindra Satyam, a part of Mahindra group is expected to report a profit after tax of Rs 220 crore for the fourth quarter of FY12, down 28.5% as compared to Rs 308 crore in previous quarter, according to CNBC-TV18 poll.

Revenues too are seen going down by 3.6% to Rs 1,655 crore in the January-March quarter of 2012 versus Rs 1,718 crore in October-December quarter of 2011.

EBITDA is likely to fall at Rs 268 crore from Rs 278 crore during the same period.

In dollar terms, revenues are expected to go up by 1.07% to USD 328.5 million from USD 325 million year-on-year.

Q4 expectations

- Dollar revenues growth up 1% - part benefit due to cross currency headwinds

- Margins expected to be flat despite headwind from a weaker rupee, given operational improvements

- PAT decline due to lower other income driven by forex losses. Q3 other income at Rs 151.3 crore
**Q3 other income was up due to forex gains of Rs 66.4 crore + recognition of gains on redemption of mutual funds
**PAT has been swinging due to big moves in other income (Q3 PAT was up 29%)

- Tech Mahindra merger announced in the quarter at a swap ratio of 1:8.5 (1 Tech Mahindra share for 8.5 shares of Satyam). Merger is likely to take another 8-9 months.

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