Tech Mahindra Q3 PAT seen up 1.8% at Rs 281.45 cr

Software services provider Tech Mahindra is expected to report a profit after tax of Rs 281.45 crore in the October-December quarter of FY12, a mild growth of 1.8% as compared to Rs 276.5 crore in the previous quarter.

Company's pre-exceptional profit after tax (i.e. Satyam) is likely to go up by 8% to Rs 150 crore from Rs 138.8 crore quarter-on-quarter.

Revenues are seen going up by 12.8% to Rs 1,501 crore from Rs 1,333.3 crore during the same period.

EBITDA is expected to go up 26.8% to Rs 259 crore from Rs 204.2 crore quarter-on-quarter.

EBITDA is seen improving at 17.25% in the third quarter of FY12 as against 15.3% in the previous quarter.

Expectations
 
- Company to continue to show tepid growth

- Dollar revenues flat due to expected cross-currency headwinds of around 200 basis points and pressure on revenues from BT
* BT growth (37% to revenue) to decline sequentially
* Non BT to continue with strong growth (last quarter up 6.9%)

- Margins to improve sequentially due to Indian rupee depreciation and also Q2 had a wage hike. Offset due to weakness in BT margins

Management commentary on margins post Q2 was

- BT margins are likely to face headwinds in the near-term. However, management expects to offset these in the medium to longer term.

- In the non-BT business, management does not expect any decline in pricing, margins going forward.

Management comments relating to growth visibility in BT and the merger of Tech Mahindra & Satyam would be the key factors to look for.