October 12, 2016 / 17:50 IST
Kotak Securities has come out with its second quarter (July-September) earnings estimates for the Technology sector. The brokerage house expects
Tech Mahindra to report net profit at Rs 679.9 crore, down 9.3 percent quarter-on-quarter.
Net Sales are expected to increase by 2 percent Q-o-Q (up 6.7 percent Y-o-Y) to Rs 7060.7 crore, according to Kotak Securities.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 1.8 percent Q-o-Q (down 4.9 percent Y-o-Y) to Rs 1047.5 crore.
Kotak Securities' report on Tech Mahindra
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We expect c/c revenue growth of 3.2% and cross-currency headwind of 90 bps. Growth will be aided by acquisitions (incremental US$10 mn from full quarter consolidation of Pininfarina acquisition + US$4 mn from The BIO agency acquisition for the entire quarter + US$7 mn for one month of Target). Organic growth will be 0.3% qoq in US$ terms and about 1.2% in c/c terms.
We expect EBIT margin to decline 60 bps qoq due to (1) cross-currency headwind, (2) full quarter impact of Pininfarina acquisition, and (3) one-time restructuring costs. These headwinds will be partly offset by operational efficiencies and lower visa costs.
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