8 January 2019 TELXs revenue grew 17.8% YoY to INR4.07b in 3QFY19, lower than our estimate of +20% YoY. The company delivered INR revenue growth of 1% QoQ, which implies a sequential decline in USD revenue (as INR depreciated by 2%+ QoQ against USD). On a YoY basis too, USD revenue growth decelerated to 5.4% from 19% only three quarters ago. This can partially be attributed to 3Q seasonal weakness. EBITDA margin shrank 110bp QoQ to 25.4%, below our estimate of 26%. PBT margin of 23.2% missed managements guidance of 24-25%, mainly due to forex losses. Consequently, PAT grew by only 5% YoY (-20% QoQ; our quarter, 3Q saw a much slower growth in Software development (97% of revenue; +1% v/s +6% in 2QFY19), while System Integration (SI; 3% of revenue) grew 19% QoQ (v/s -12% QoQ in 2QFY19). PBT margin came in at 23.2%, lower than our estimate of 26.5%.