INSTITUTIONAL EQUITY RESEARCH IT Services

INSTITUTIONAL EQUITY RESEARCH

Page | 1 | PHILLIPCAPITAL INDIA RESEARCH Please see penultimate page for additional important disclosures PhillipCapital (India) Private Limited (ldquoPHILLIPCAPrdquo) is a foreign broker-dealer unregistered in the USA PHILLIPCAP research is prepared by research analysts who are not registered in the USA PHILLIPCAP research is distributed in the USA pursuant to Rule 15a-6 of the Securities Exchange Act of 1934 solely by Rosenblatt Securities Inc an SEC registered and FINRA-member broker-dealer

IT Services

LTI amp MTCL ndash Buy the next IT behemoth in its infancy

INDIA | IT SERVICES | Sector Update

18 June 2020

MampA in IT Services ndash we predicted it FIVE years ago Five years ago we had predicted heightened MampA activity in the IT midcap space (read here) In December 2019 we doubled down on the thesis (read here) and predicted the merger of Mindtree with LTI We pat ourselves for having foreseen this highly hypothetical scenario well ahead Over the last five years multiple midcap IT companies (iGate GSSL Polaris KPIT Mphasis Mindtree) have seen MampA activity LTI and MTCLrsquos merger is now an inevitability (read here)

LampT Infotech + Mindtree ndash creating a Rs 700bn IT behemoth with 53 returns over next 2 years We see LTI+MTCL breaking into the top-5 club of the Indian IT sector over the next two years In the last decade only TechM has managed to break into the club ndash and that was driven by its merger with Satyam LTI+MTCL will lead to the formation of $35bn IT Services Company by FY24 with a significantly superior profile to TechM ndash higher growth higher margins higher ROEs In fact LTI+MTCL have the highest revenue CAGR in the industry over FY19-22 and the second-highest ROE While the combined entity currently is only half of TechMrsquos revenue it already is at 97 of its market-cap

Our base-case scenario assumes LTI+MTCL to report 12 USD revenue CAGR over FY22-24 and 16 EBIT margins in FY24 If it is valued at 18x FY24 PE in FY22 (currently LTIMTCL are trading at 18x17x two-year forward PE) it would have a market-cap of Rs 700bn (currently Rs 466bn) ndash translating into whopping 46 returns over the next two years

A perfect merger with little overlap ndash dream combination for any management LTI+MTCL is a dream merger for any management The two companies have a highly complementary profile with very little business overlap LTI has a very strong base in BFSI (44 of revenue) while MTCL is very strong in Retail (20) Hi-techMedia remains very strong for both companies After merging the entity would have a diversified revenue profile ndash across BFSI Manufacturing Retail and Hitech ndash very similar to large-caps

LTI+MTCL would also have minimal client overlap Among their top-25 clients we found only one in common all others were mutually exclusive giving the entity a highly exhaustive coverage of all verticals The merger will also address the issue of client concentration ndash top-client share of the merged entity will fall to 9 of revenues (currently 2213 for MTCLLTI) LTI and MTCL also have very similar employee metrics and profiles (1) both hire candidates from the same colleges for equivalent profiles (2) have similar salary levels (only 4 variance) (3) have matching revenue productivity (only 2 variance) and (4) have comparable onsiteoffshore mix

Merger synergies can be HUGE ndash leading to much better financials than expected LTI has been the fastest growing IT company for the last two years and likely to remain in the leaderrsquos quadrant for next two while MTCL should see significant margin expansion over the next two years with multiple margin levers LTI MTCL both have very strong profiles in Hi-techMedia ndash forming 11 43 of their revenues Both have a coveted list of clients with almost no overlap Technology domain is likely to be one of the biggest beneficiaries in a post-Covid world which augurs very well for LTI+MTCL with their strong presence in this domain

We foresee highly smooth integration of the two workforces with synergies from (1) lower GampA expenses (2) redistribution of salesmarketing teams (3) lower bench strength requirement and (4) lower subcontracting costs We find LTI has a relatively efficient cost structure with employees cost as of revenue being 500bps lower than MTCL ndash an area in which the merged entity could expand its margins Even with location of delivery centres LTI+MTCL have an amazingly complementary profile with only 4 common locations in the US (64 in EUROW)

Own the next IT behemoth in its infancy ndash can play through either LTI or Mindtree

We recommend investors seize this opportunity and own the next IT behemoth in its infancy to

make handsome returns over the next two years They can choose to play this theme through

either LTI or MTCL as both are trading at similar valuations (LTI 18x MTCL 17x FY22 PE) and

hence offer a similar investment return path We upgrade our target multiple for LTI to 20x (18x

earlier) and MTCL to 19x (18x earlier) Maintain BUY on both the name We also upgrade our

target multiple and price targets slightly for all largecaps (excl TechM)

Companies LampT Infotech Buy CMP 1880 TP (uarr) 2120

MindTree Buy CMP 909 TP (uarr) 1050

TCS Buy CMP 2036 TP (uarr) 2420

Infosys Buy CMP 713 TP (uarr) 870

Wipro Neutral CMP 218 TP (uarr) 220

HCL Tech Buy CMP 578 TP (uarr) 640

Tech Mahindra Sell CMP 536 TP (harr) 440

LampT Technology Services Neutral CMP 133 TP (harr) 1140

Cyient Sell CMP 217 TP (harr) 165

NIIT Technologies Neutral CMP 1372 TP (harr) 1315

Persistent Systems Neutral CMP 584 TP (harr) 500

Mphasis Buy

CMP 859

TP (harr) 970

Hexaware Neutral CMP 323 TP (harr) 330 Vibhor Singhal Research Analyst (+ 9122 6246 4109) vsinghalphillipcapitalin Karan Uppal Research Analyst (+ 9122 6246 4106) kuppalphillipcapitalin

Page | 2 | PHILLIPCAPITAL INDIA RESEARCH

IT SERVICES SECTOR UPDATE

MampA in IT Services ndash we predicted it FIVE years ago Five years ago we published a report (read here) where we highlighted that most midcap IT companies will find it difficult to withstand competition in the rapidly evolving technology landscape and (hence) might look to sell themselves out over the next few years We had also hypothesized that IF one or more of these midcap IT companies could be merged (perhaps facilitated by PE owners) it could lead to the formation of a formidable IT company that could perform much better than its individual components and would also command a valuation premium We had analysed this by taking five niche midcap IT companies with significant PE presence We then created four hypothetical Integrated Entities (IEs) merging three different midcap companies from this set and then analysed the overall profile of these IEs with respect to clients revenue diversification and operating margins Our analysis had revealed that the hypothetical integration would have led to the formation of well-diversified full-service IT companies with a sizeable revenue base ones that were capable of maintaining their competitive edges in niche domains Their profiles would have been very similar to the profiles of the top-5 players which would have led to them being significantly rerated

We predicted MampA activity in the IT midcap space in 2014

Source PhillipCapital India Research We give ourselves a little pat for having predicted this highly hypothetical scenario five years ago (well ahead) accurately Over the last few quarters promoters of multiple midcap companies (Mindtree NIIT Tech KPIT) have exited their businesses In fact over the last four years multiple midcap IT companies have either merged with larger IT companies (iGate Geometric Polaris KPIT Syntel) or have sold significant promoter stake to PE investors (Hexaware Mphasis Zensar) In December 2019 we doubled down on this thesis and released the second part of our ldquoOne + One = Elevenrdquo report (read here) In that report we highlighted our expectations of further MampA activity in the sector and predicted mergers of LTI with Mindtree and Hexaware with NIIT Tech True to our thesis the CEO of LampT group Mr SNSubramanaiam talked about an eventual merger of the two entities in a year or two years (read here) We have long maintained the merger of LTI and MTCL to be an inevitability In this report we highlight how we believe this merger could pave way for the formation of an IT behemoth which could soon displace underperforming largecaps (like Wipro TechM) from the ldquoTop 5rdquo category and in the process would generate handsome returns for investors

HEXW139

NITEC82

KPIT94

POL91

Cyient12

INFO161

TCS193

HCLT145

Wipro139

TechM156

KNP115

HKN147

HKC144

NPC125

PE

(x)

Top 5 client concentration ()

Low

High

LowHigh

Our report One + One = Eleven (Part 2)




Mergers creating value Indian IT companies have typically been averse to making large acquisition Part of it stems from their risk aversion but majorly from the confidence in their intrinsic ability to keep growing organically Overseas IT companies on the other hand (Accenture CapGemini Cognizant DXC etc) have been more lsquoadventurousrsquo and have made multiple large acquisitions

Recent MampA transactions in Europe Capgemini ndash Altran Tieto - EVRY DXC - Luxoft

Date of Announcement June 24 2019 June 18 2019 January 7 2019

Expected completion December 2019 December 2019 June 2019

Acquirer Capgemini Tieto Corp DXC Technology

Sales euro 132bn euro 16bn $ 207bn

EBIT Margins 121 97 83

Employees 211000 15000 130000

HQ France Finland US

Target Altran Technologies EVRY Luxoft Holding

Sales euro 29bn euro 13bn $ 907mn


Employees 47000 8800 13000

HQ France Norway Switzerland

Consideration euro 14 per Altran share 012 shares in Tieto and NOK 528 in cash $59 per Luxoft share

EV euro 50bn (incl Debt of euro 14bn) euro 138bn (incl cash consideration of euro 02bn) $2bn

EVSales 17x 11x 22x

Source Companies PhillipCapital India Research In the last decade there have only been two large mergers (or acquisitions) in the Indian IT services sector And both the events led to the formation of strong entities that turned out to be much more successful than the acquiring companies

Tech Mahindra = Tech Mahindra + Satyam Tech Mahindrarsquos transition from a midcap telecom solutions vendor to one among the top-5 (listed) IT companies in India was a result of its merger with Satyam Before the merger TechM had strong vertical and client concentration which was a major cause of its sluggish growth over FY10-11 Telecom its single largest vertical accounted for 97 of its revenues and BT its largest client for 45 The company had reported only 9 revenue CAGR over FY10-12 with an EBITDA-margin contraction of 770bps

TechM Clear indication of re-rating after merger with Satyam

Source Bloomberg PhillipCapital India Research

6x

12x

18x

24x

0

100

200

300

400

500

600

700

800

900

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14

(Rs) Pre- Satyam Post- Satyam



Its merger with Satyam in 2013 led to a dilution of its clientele and vertical concentration thereby reducing its business risks The evolution of TechM from a telecom services vendor to a fully equipped end-to-end service provider resulted in strong revenue CQGR of 42 over Q1FY13-Q1FY15 Its focus verticals ndash telecom BFSI manufacturing and retail ndash all saw above-industry-average growth in this period Its margins too improved by a robust 450bps after the merger Satyamrsquos acquisition led to the belief that TechM would now be able to bag large deals across verticals leveraging its expertise in telecom along with Satyamrsquos enterprise-level outsourcing capabilities The belief also led to the traditional lsquoTop-4rsquo bracket in the Indian IT services space expanding to lsquoTop-5rsquo The markets too rewarded the company with a significant rerating in multiple from 6-8x pre acquisition to touch 15-16x post acquisition

Birlasoft = Birlasoft + KPIT (IT Services) In January 2018 KPIT Technologies and Birlasoft announced their plans to merge their IT Services businesses ndash to create two separately listed entities

KPITrsquos engineering business ($220mn)

Merged entity comprising of KPITrsquos IT Services ($350mn) and Birlasoft ($125mn) KPITrsquos IT Services business (mainly comprising of SAPOracle implementation) and Birlasoftrsquos IT business (primarily BFSI and healthcare) were struggling independently While KPITrsquos engineering business continued to prosper its SAPEnterprise business was continuously dragging overall growth At the same time Birlasoft due to its small size was not able to capitalize on large deals and customers A demerger of the engineering business from KPIT meant that the management could focus on the engineering business At the same time the merger of Birlasoft with KPITrsquos IT Services business provided Birlasoft the scale (combined entity revenue of $500mn vs earlier revenue of $125mn) that it needed for it to grow in that domain

The merger-demerger process of KPIT Tech and Birlasoft (FY18 numbers)

Source Companies PhillipCapital India Research Post this merger-demerger both new entities ndash KPIT and Birlasoft ndash have been doing really well While KPIT reported strong FY20 with 14 yoy in CC growth in revenues Birlasoft bagged its largest deal ever (at $240mn) paving the way for strong growth in the future



LampT Infotech + Mindtree ndash Creating an IT behemoth In March 2019 the LampT group ndash in a surprising but not entirely unexpected move ndash entered into a share-purchase agreement with VG Siddhartha and Coffee Day Group to acquire their 2015 stake in Mindtree It raised its stake further through open-market purchases and open offer acquiring 6055 of Mindtreersquos total equity

In our December 2019 report we had highlighted LTI + Mindtree as a ldquohighly likelyrdquo merger with the synergies between the two being too large to ignore Initially LampTrsquos management (as well as LTI and MTCLrsquos managements) had indicated that MTCL would remain an independent listed entity and ruled out any merger between the two However our stand was validated by the LampT Group CEO amp MD Mr S N Subrahmanyan a few months after our report In an interview he said ldquoultimately the plan is to merge Mindtree and LampT Infotech once the new management settles down but the merger is still one or two years awayrdquo Read it here

A Rs 700bn IT behemoth by FY22 ndash on conservative estimates

We believe that the LTI and MTCL merger which we expect will happen sooner than everyone anticipates will lead to the formation of a $35bn IT Services company ndash on conservative estimates This $35bn entity if it continues to command the current multiple enjoyed by its constituents would easily achieve a market-cap of Rs 700bn

LTI + MTCL merger in numbers

LTI + MTCL merger in numbers Company Particulars ($mnRsmn) FY20 FY21E FY22E FY23E FY24E

LTI USD Rev 1525 1525 1708 1913 2142

Yoy Growth 130 -00 120 120 120

EBIT 17561 17637 21398

EBIT Margins () 161 154 165

PAT 15199 15241 18453

MTCL USD Rev 1089 1052 1158 1296 1452

Yoy Growth 87 -34 100 120 120

EBIT 7869 9003 11116


PAT 6309 7178 9091

LTI + MTCL USD Rev 2613 2577 2865 3209 3594

Yoy Growth 112 -14 112 120 120

EBIT 25430 26640 32514 38304 44859

EBIT Margins () 136 138 149 155 160

PAT 21508 22419 27543 32201 37813

Market Cap (Rs bn) 466 681 PE (x) 18x FY22 PE (implied) 18x FY24 PE (target)

Source PhillipCapital India Research (Our USD-INR assumption of 75767778 for FY21222324)



Indian IT Services ndash a skewed landscape The Indian IT services sector appears to be a skewed landscape right now with six ldquomegardquo companies with revenues in $5bn-20bn range and a plethora of ldquomid-caprdquo companies in the $500mn-1bn range The mega companies have typically dominated the big-ticket enterprise deals while the midcaps have been focussing on smaller complex deals in niche domains Over the last decade only one company has managed to migrate from one ldquobandrdquo to the other ndash TechM And that too was driven by its acquisition of Satyam ndash a company much larger than its own size Now we have another IT company with revenues approaching $3bn aspiring to break into the ldquomegardquo companiesrsquo club ndash the combined entity of LTI and Mindtree

Skewed landscape of Indian IT services

Source PhillipCapital India Research

The Nifty paradox ndash what is the substitute for Wipro Currently the weightage of the IT sector in Nifty is 147 comprising Infosys (64) TCS (52) HCL Tech (15) Wipro (08) and TechM (08) Wipro has been a laggard for many years now significantly underperforming all its largecap peers in stock returns as well as growth If investors wish to remain underweight in Wipro there is no substitute as most midcap companies (including LTI and MTCL individually) are quite small and have high revenue concentration risk LTI + MTCL offers a much larger business without the traditional risks associated with IT midcaps In that sense it offers a lucrative alternative for investors as a substitute to Wipro

IT sector holds 147 weight in Nifty dominated by Infosys and TCS


TCS

CTSH

Infosys

HCLT

Wipro

TechM

LTI

Mphasis Hexaware

LTTS

Cyient

NIIT Tech

Persistent

MindTree LTI+MTCL

0

5

10

15

20

25

400 4000

PE

(x)

USD revenue ($ mn) - 700 3000 8000 20000

Financials 333

IT 147

Oil amp Gas 143

FMCG 106 Auto 56

Industrials 41

TCS 52 Infosys 64

HCL Tech 15 Wipro 08

Tech Mahindra 08

Nifty

IT

Industrials TelecomMedia Pharma DiscretionaryMetals amp Mining Power Cements Agri Chemicals

Nifty IT break-up



Wipro has significantly underperformed its largecap peers Company Stock returns USD Revenue CAGR

3 year 5 year 10 year 3 year 5 year 10 year

TCS 68 62 462 8 7 13

Infosys 51 41 117 8 8 10

Wipro 8 3 68 1 2 5

HCL Tech 34 23 531 13 11 14

Tech Mahindra 53 6 230 6 7 18

Set to enter the lsquoTop ndash 5rsquo club The combined LTI + MTCL entity ndash while currently half of TechMrsquos revenue ndash is already at 97 of the latterrsquos market cap This huge divergence is attributable to the formerrsquos significantly superior profile in terms of higher growth margins and ROEs leading to a higher multiple In fact LTI + MTCL has the highest revenue CAGR over FY19-22 in the industry and the second highest ROE (second only to TCS)

LTI + MTCL is already almost touching the ldquoTop-5rdquo Company USD Revenue ($ mn) PAT (Rs mn) Rev CAGR ROE Mcap

FY20 FY20 FY19-22 FY20 Current (Rs mn)

TCS 22032 323400 30 38 7635

Infosys 12781 167640 47 25 3101

Wipro 8256 97234 14 17 1310

HCL Tech 9936 110940 79 21 1568

Tech Mahindra 5182 40330 25 18 500

LTI 1525 15199 82 28 327

MindTree 1089 6309 49 20 149

LTI + Mindtree 2613 21508 68 25 476

of TechM 50 53 - - 97


Historically companies have grown rapidly post $25bn While we propose our thesis of LTI + MTCL becoming one of the Top-5 by FY24 we do foresee it happening much earlier And the primary reason for that is the strong growth companies are able to report once they hit the critical $25bn revenue mark Historically IT Services companies have taken on an average four years to double their revenues from $25bn to touch $5bn The fastest amongst them was TCS (only 2 years) but this can be attributed to lower outsourcing penetration in those years Infosys and Wipro got delayed by the GFC crisis TechM took the longest time (7 years) as it struggled to manage its LCC acquisition Even on a quarterly basis companies have taken only 13 quarters (on an average) to reach $125bn (the run-rate required for $5bn annual revenues) from the current revenue base of LTI+MTCL ($700mn)

Time taken to double revenue from $25b to $50bn (Annual and quarterly) Revenue $25bn $50bn No of years $700mn $1250mn No of qurtrs CQGR

TCS FY06 FY08 20 3QFY06 1QFY08 60 101

Infosys FY07 FY11 40 2QFY07 4QFY10 140 42

Wipro FY08 FY11 30 1QFY11 1QFY14 120 50

HCL Tech FY10 FY14 40 1QFY08 2QFY11 130 46

TechM FY13 FY20 70 1QFY14 3QFY19 220 27

Average

40 134 53


Hence on an average companies have taken only four years to double their revenue ndash from $25 to $5bn ndash translating into a CAGR of 26 We attribute this strong growth to the size opening up doors for these companies as they get invited to larger deals While it might not be easy for LTI+MTCL to replicate the same because of relatively higher penetration of outsourcing now ndash we do expect the size to provide significant boost to its growth rate over and above our assumed 12 CAGR



Sensitivity analysis We believe the merger can create significant value over the next two years Our base case scenario is of the LTI+MTCL entity reporting 12 revenue CAGR over FY22-24 and 16 margins in FY24 with the entity getting 18x FY24 PE in FY22 (current PE of LTIMTCL is 180x175x two-year forward) In this scenario the merged entity will command a marketcap of Rs 681bn ndash translating into a whopping 46 returns over the next two years To prove that and also calculate its dependency on various variables we conducted a two-step sensitivity analysis In our sensitivity analysis we tried to measure the impact on the FY22 market cap of the combined entity of LTI + MTCL We base our sensitivity analysis on three variables ndash revenue growth margins and the PE multiple In our first sensitivity analysis we assume 16 EBIT margins in FY24 for the combined entity (easily achievable in our opinion) ndash and vary the revenue growth and PE multiple We find that the merged entity can achieve a market-cap of Rs 549-793bn ndash translating into 18-70 returns over the next two years from current levels

Sensitivity analysis 1 leads to likelihood of mcap of Rs 549bn-793bn in two years Mcap (Rs bn) Rev CAGR (FY22-24)

466 10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 549 558 567 576 595

16 586 595 605 615 634

17 623 633 643 653 674

18 659 670 681 691 714

20 732 744 756 768 793

Sensitivity analysis 1 leads to likelihood of 18-70 returns over next two years Returns Rev CAGR (FY22-24)

10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 18 20 22 24 28

16 26 28 30 32 36

17 34 36 38 40 45

18 42 44 46 49 53

20 57 60 62 65 70

Source PhillipCapital India Research (Assumption FY24 EBIT Margins = 16)

In our second sensitivity analysis we assume 18x FY24 PE in March 2022 for the combined entity (current multiple of 180x175x FY22 PE for LTIMTCL) and vary the revenue growth and EBIT margins We find that the merged entity can achieve a market-cap of Rs 550-753bn ndash translating into 18-62 returns over the next two years


466 10 11 12 13 15

FY2

2

EBIT

Mar

gin

s

13 550 558 567 576 594

14 586 596 605 614 634

15 623 633 643 653 674

16 659 670 681 691 714

17 696 707 718 730 753

Sensitivity analysis 2 leads to likelihood of 18-62 returns over next two years Returns Rev CAGR

10 11 12 13 15

FY2

2

EBIT

Mar

gin

s 13 18 20 22 24 28

14 26 28 30 32 36

15 34 36 38 40 45

16 42 44 46 49 53

17 49 52 54 57 62

Source PhillipCapital India Research (Assumption PE Multiple = 18x FY24 PE)

Sensitivity analysis 1 is dependent on Revenue CAGR and FY24 PE Multiple in FY22 Here we assume FY24 EBIT margins constant at 16

Sensitivity analysis 2 is dependent on Revenue CAGR and FY24 EBIT margins Here we assume PE Multiple in FY22 at 18x FY24 PE



A perfect merger with little overlap The merger of LampT Infotech and Mindtree is a dream merger for any management The two companies have highly complementary profile with very little business or client overlap LTI has a very strong base in BFSI segment (44 of its revenue) while MTCL is very strong in the Retail (20) segment While Hi-techMedia remain very strong for both companies the kind of clients the two service are completely different

LampT Infotech + Mindtree will have a highly diversified revenue profile (FY20) LTI MTCL LTI + MTCL Rev share

Top line (USD mn) 1525 1089 2613 EBIT margin () 163 101 138

Key verticals

BFSI 691 231 922 35

Manf 257 - 257 10

EampUTTL 173 181 354 14

Retail 171 231 402 15

Hitech ndash Media 172 446 618 24

Others 60 - 60 2

Geographies

US 1051 814 1865 71 EU 240 184 424 16 India 125 44 169 6

ROW 108 47 155 6

Horizontals

ADM 551 132 683 26

IMS 176 270 446 17

Enterprise 445 - 445 17

Digital 310 416 726 28

Platforms 43 73 116 4

Testing - 198 198 8

Source PhillipCapital India Research (FY20 numbers)

LampT Infotech + Mindtree will have a highly diversified revenue profile

On merger the LTI+MTCL entity will have a revenue profile similar to largecaps with highest exposure to BFSI (35) ndash though still lower than the parent LTI (44) The revenue base will be well-diversified across Manufacturing Retail and Hitech

Vertical exposure comparison (FY20) BFSI Telecom HiTech Manf Retail Healthcare TTL EampU Others US Europe ROW

Infosys 32 13 8 10 15 6 - 13 3 61 24 15 TCS 30 7 9 10 15 8 - - 21 52 31 17 HCL 21 8 16 20 10 13 - 11 - 65 27 7 Wipro 31 6 13 8 16 13 - 13 - 59 24 17 TechM 14 42 8 18 7 - - - 12 48 27 25

LTI + MTCL 35 - 24 10 15 - 7 7 2 71 16 12


35

21

45

10

0

17

14

17

11

15

21

11

24

41

11

2

0

4

0 10 20 30 40 50 60 70 80 90 100

LTI + MTCL

MTCL

LTI

BFSI Manf EampUTTL Retail Hitech - Media Others



Client profile ndash highly mutually exclusive The best thing about the inevitable merger of LTI and Mindtree is the minimal client overlap Amongst the top-25 clients of both LTI and Mindtree we found only one common client ndash PampG Apart from that almost all the clients are mutually exclusive which gives the combined entity a highly exhaustive coverage of almost all verticals

Top clientsrsquo profile of LTI amp MTCL Highly diversified with little overlap

Source Media reports PhillipCapital India Research

The client list reveals one common strong point for the two companies ndash their strong presence in Hi-techMedia segment Put together the two companies have the whorsquos who of the technology sector as their clients ndash including the likes of Microsoft Google Cisco Philips Viacom etc And the most interesting part is that there is virtually no overlap in that segment too almost all the clients of the two companies even in the Hi-TechMedia segment are mutually exclusive

Client concentration will reduce significantly The merger will also address the issue of client concentration Currently the top client forms 22 of MTCLrsquos while ~13 of LTIrsquos revenue (no longer disclosed) This leads to concentration risk with the two companies However with the merger the share of the top client in the combined revenue will drop to 9 thus derisking the overall revenue profile to a large extent The revenue share of all the buckets ndash top-5 top-10 and top-20 ndash will all fall significantly thereby broadening the revenue base

Client concentration risk reduces in the merged entity

Client concentration comparison with Top 5 Top Client Top 5 Top 10 Top 20 Non Top 20

Infosys 3 19 34 66 HCL 16 23 33 67 Wipro 3 13 20 80 TechM 22 31 43 57

LTI + MTCL 9 24 33 67

Source Companies PhillipCapital India Research

7

4

3

6

3 3

1

6 6

5

0

2

4

6

8

BFSI Manufacturing Retail Hitechmedia TTLEU

No

of

clie

nts

in t

op

-25

LTI Mindtree

13 22

9

19 13

15

14 10

9

54 55 67

0

20

40

60

80

100

LTI MTCL LTI + MTCL

Top client Top 2-5 clients Top 6-10 clients Non Top-10



Employee metrics ndash as identical as they could have been Integration of any two companies is an arduous task and it takes even experienced companies decades to realise the synergies of a merger However we believe that integrating LTI and MTCL might not be as difficult a task as it is for other companies because of the very similar employee metrics and profile of the two companies 1 Similar employee profile Both LTI and MTCL hire candidates from the same

engineering colleges with similar profiles They are put through similar training programs on various platforms and are readilyfrequently transferred across projects and platforms

2 Similar employee revenue productivity This was a surprise for us too The revenue productivity of LTI and MTCL are as close as they could have been ndash with a difference of just 2 between them This leaves little to be differentiated in terms of productivity and redeployment in the merged entity

Less than 2 variance in the employee productivity of the two companies Employees LTI MTCL LTI + MTCL

Software Professionals 29683 20817 50500

Sales amp Support 1754 1174 2928

Total 31437 21911 53348

Rev productivity (US$ lsquo000 emp) 51363 52303 51750

Source Companies PhillipCapital India Research (FY20 numbers)

3 Similar salary levels Our analysis of the salary levels at these companies reveals

that they are very similar even at different hierarchies The onsite salaries for the technology staff remain amazingly same at various levels offshore salary levels while very similar show a bit of variation at higher levels

Salary levels are similar across hierarchies (less than 4 avg variance)

Source Glassdoorcom PhillipCapital India Research

4 OnsiteOffshore mix LTI and MTCL operate at similar onsite offshore levels

with onsite forming 20-22 The ratio couldnrsquot have been more similar for the two companies This ensures smooth integration of the workforce and continuity of the onsiteoffshore mix in the merged entity

LTI and MTCL operate at similar effort mix Onsite effort share 1QFY20 2QFY20 3QFY20 4QFY20

LTI 220 220 219 215

MTCL 220 216 212 211

Utilization 1QFY20 2QFY20 3QFY20 4QFY20

LTI 805 789 792 793

MTCL 772 770 770 765

Attrition 1QFY20 2QFY20 3QFY20 4QFY20

LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree

There is less than 2 variance in the employee revenue productivity

There is less than 4 variation in the average salary levels across hierarchies

OnsiteOffshore mix could not have been more similar Scope of improvement in utilization for Mindtree Scope of improvement in attrition for both LTI amp MTCL



Merger synergies can be HUGE Highly complementary profiles of LTI and MTCL mean that there will be minimum overlap between the two But significantly greater than that we see merger synergies in this creation of the IT behemoth

LTI chasing growth ndash Mindtree expanding margins

LTI and MTCL are a perfect combination of companies likely to report industry leading growth and profitability LTI has been the fastest growing IT company (across largecaps and midcaps) for last two years and in a covid-impacted FY21 too it appears to be the only company that could report positive yoy USD revenue growth Its deal-wins current momentum and a highly aggressive sales team make it highly likely that LTI would remain in the leaderrsquos quadrant in terms of growth

LTI has grown significantly ahead of the industry average

On the other hand MTCL is expected to report significant margin expansion over the next two years In fact our whole thesis of upgrading MTCL (in November 2019) was based on margin expansion by Q4FY20 ndash which has played out to perfection

Mindtree had reported average EBIT margins of 175 over FY13-15

However as growth decelerated in FY17-18 margins fell to 10

In FY19 as growth rebounded it was able to expand margins by 240bps

Yet again in FY20 as the LampT group took over MTCL the transition led to margins sliding by 270bps ndash though margins were back in Q4FY20 to Q4FY19 levels

We see significant margin expansion levers for MTCL over next 2-3 years including utilization employee pyramid lowering of SGampA and subcontracting expenses

Mindtree margins fell sharply in 1HFY20 ndash and can rebound in the same manner


-5

0

5

10

15

20

FY16 FY17 FY18 FY19 FY20 FY21E FY22E

US$

Rev

enu

e gr

ow

th (

y

oy)

LTI Largecap Midcap Industry

140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14

1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20

Quarterly EBIT Margins



A formidable force in Hi-tech Media vertical LTI and MTCL both have a very strong profile in Hi-tech Media segment ndash forming 11 and 43 of their revenues respectively Both the companies have a coveted list of clients in the segment though Mindtree appears to have a slight upper hand Interestingly though there is literally no client overlap between the two companies While MTCL has Microsoft Google and Philips as its top clients LTI boasts of Cisco and Viacom as few of its top clients

LTI+MTCL has grown the fastest in Hi-techMedia versus peers Hitech share FY20 yoy Last 3 years cagr

Infosys 8 12 11 TCS 9 3 12 HCL 16 2 15 Wipro 13 -4 -3 TechM 8 10 11

LTI + MTCL 24 12 17

Source Company PhillipCapital India Research

In a post-covid world we expect hi-tech companies like Microsoft Google and Amazon to benefit the most because of the increasing adoption of cloud-based platformsapplications and virtual meeting platforms especially on the enterprise side Technology domain is expected to be one of the biggest beneficiaries of this pandemic and this augurs well for the LTI+MTCL entity with its strong presence in this domain

LTI strong in BFSI ndash Mindtree in Retail While both LTI and MTCL are strong in Hi-techMedia the two companies have different verticals as their strengths which are highly complementary LTI has an exceptionally strong presence in BFSI with Citigroup being its largest client and a host of other marquee clients The segment contributes 44 to its revenues and remains a key vertical boosting its growth On the other hand MTCL has traditionally been very strong in RetailCPG with all large names as in its clientele The vertical forms 20 of its revenues Together the BFSI and RetailCPG verticals would enable the LTI+MTCL entity to diversify its revenue base while maintaining a strong position in both verticals with global majors as its clients

LTI+MTCL have outperformed all largecaps in BFSI and Retail BFSI Retail

Rev share FY20 yoy Last 3 years

cagr Rev share FY20 yoy Last 3 years

cagr

Infosys 32 7 6 15 2 6 TCS 30 4 5 15 4 14 HCL 21 10 8 10 17 14 Wipro 31 2 9 16 6 4 TechM 14 6 9 7 12 6

LTI + MTCL 35 7 12 15 12 15




Workforce rationalization can provide significant tailwind to margins

In any merger across industries the biggest source of synergies is saving on operational costs IT Services is a peoplersquos business so the biggest source of saving operational costs is via workforce rationalization As detailed in an earlier section the two companies have highly similar workforces ndash hired from the same colleges given the same training and the salary levels are quite similar Hence we foresee a highly smooth integration of the two workforces with lots of synergies We expect the synergies to come from 1) Reduction of support staff such as HR admin etc which would lower GampA

expenses 2) Redistributionrealignment of sales and marketing teams eliminating overlaps

and multiplicity of efforts 3) Lower bench strength (as of total workforce) as beyond a number the

number becoming irrelevant 4) Lower subcontracting costs as both companies would be able to address the

demand-supply mismatch with a much larger workforce at their disposal As we compare the cost structure of LTI and MTCL we find that LTI has a highly efficient cost structure with ldquocost of employeesrdquo (as of revenue) 500bps lower than MTCL This is one area in which the merged entity could expand its margins

Total SGampA expenses are almost the same at 222 219 for the two

Subcontracting costs too are almost the same at 77 75

Utilization and attrition also remain the same for the two companies

Cost structure analysis of LTI amp MTCL (FY19) MTCL of rev LTI of rev

Revenue 70215

94458 Employee Benefit Expenses

Salaries and Wages 40985 584 50627 536

Provident and Other Funds 2829 40 3270 35 Employee Stock Based Compensation 162 02 281 03

Staff Welfare Expenses 236 03 490 05

Total 44212 630 54668 579

Other Expenses

Travel Expenses 3006 43 3270 35

Communication Expenses 793 11 522 06

Subcontractor Charges 5281 75 7256 77

Computer Consumables 919 13 3639 39

Legal and Professional Charges 452 06 - 00

Power and Fuel 302 04 310 03 Lease Rentals 1223 17 1941 21

Repairs and Maintenance 163 02 885 09

Insurance 76 01 63 01 Rates and Taxes 266 04 294 03 Other Expenses 2877 41 2777 29

Total 15358 219 20957 222

Workforce rationalization can provide significant boost to margins

54

58 58

63

48

50

52

54

56

58

60

62

64

Salaries and Wages Total Employee expense

LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8

Travel Expenses SubcontractorCharges

ComputerConsumables

Lease Rentals

LTI MTCL

We have compared the FY19 cost structure because that offers a normalized comparison MTCL FY20 numbers were impacted by exceptional bonusessalary hikes awarded post its acquisition



Location synergies are just too good to be true

Even with the location of delivery centres LTI+MTCL have an amazingly complementary profile with only four common locations in the US (total 26 locations 71 of the combined entityrsquos revenues) However EUAPAC appear to have more common locations than expected

Very little overlap in development centre locations ndash even in their largest geography US


LTI is great in marketing ndash Mindtree has strong delivery

LTI and MTCL are complementary not just in terms of their clientbusiness profile ndash but also in the manner in which they conduct their business LTI is exceptionally strong in marketing visible in its deal-wins and various partnerships forged with leading platform providers (like SAP Oracle MS Cisco IBM and AWS) which are a testimony to its strong marketing capabilities (along with delivery) and have translated into strong deal-wins for the company This has in turn driven its industry-leading revenue growth for two consecutive years

LTI enjoys high-tiered partnerships with most firms


MTCL on the other hand is famous for being exceptionally strong in delivery ldquoBorn digitalrdquo MTCL even under its previous management was always considered the

Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA

Ontario ndash Canada

Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN

Amsterdam Netherland

Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway

Brussels BelgiumCopenhagen Denmark

Cologne

Germany

Vianen

Netherlands

Munich GermanyDublin Ireland

London UKWarsaw Poland

Stockholm SwedenParis France

New JerseyLos Angeles CANew York NY

Toronto Canada

KuwaitSaudi ArabiaQatarAbu DhabiMoroccoJohannesburg

Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China

Cape Town South Africa

Makati City PhilippinesHong KongPerth Aus

Kuala Lumpur Malaysia

Beijing ChinaMelbourne Aus

Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld

LTIs Partnership Tier

Highest Level

Entry Level



benchmark for delivery among midcaps (like TCS is among largecaps) MTCLrsquos repeat clients and renewals from its existing clients and its high ranking in industry surveys is a testament to its strong delivery capabilities

Size will open doors for new accounts and large deals

One of the biggest benefits of the LTI-MTCL merger would be the giant size of the company and its ability thereafter to win large deals The LTI+MTCL entity is a $25bn entity now and is likely to be $3bn by FY22 (conservatively) This size will open many new doors for the merged entity as it becomes eligible to bid for many large deals and gets invited to the RFPs It would be able to challenge the likes of TCS Accenture Infosys and CapGemini in large deals ndash based on its strengths in marketing (LTI) and delivery (MTCL) and even outbid them in many such deals

Large deal announcements by largecaps in the last few months Time Geo Client USD mn Years Details of the deal

Aprrsquo20 US Walgreen Boots Alliance 1500 10 TCS will modernize applications and cloud-enabled technology

operations

TCS

Jan lsquo18 EU MampG Prudential 690 10 To support 4mn policies of Prudential 1100 incumbent suppliers

employees to move to TCS with 700 new roles in India

Sep lsquo19 US General Motors NA 5

TCS will acquire certain assets of GM ndash India (along with 1300

employees) and support GMrsquos global vehicles programs with

engineering design services

Jan lsquo18 US Transamerica 2500 10

TCS will simplify the service of more than 10mn policies into a single

integrated modern platform and drive greater sustainable growth

opportunities through superior customer experiences 2200

Transamerica employees will join TCS

Dec lsquo17 US Nielsen Holdings 2250 10

ADM BPO KPO and Analytics Assured of US$ 320mn business every

year from 2017-2020 US$ 186mn every year from 2021-2024 and US$

1395mn in 2025 The deal will incrementally add US$ 70-80mn annually

Jan lsquo18 UK Marks amp Spencer NA 5 Digital Transformation 250 employees to be transferred to TCS

HCLT

Jan lsquo18 UK Cadent NA 5 Integrated public cloud hosting and SAP and Application Maintenance

Services including the migration of a significant applications portfolio to

AWS public cloud

Nov lsquo17 UK Jardine Lloyd Thompson NA 5 Implement a fully orchestrated and automated cloud management

platform with advanced automation capabilities supported by DRYiCE

Wipro

Dec lsquo17 NA Fortune 500Medical devices NA MYMM Global front-office transformation project

Sep lsquo19 India ICICI Bank 300 7 To provide a comprehensive suite of services through HOLMES Wipro

will absorb 3800 employees of Vara Infotech ndash current service provider

Dec lsquo17 NA Global BFSI service provider NA MYMM Upgrade its user experience and simplify sales and service process

Nov lsquo17 US Luxury departmental store NA MYMM Reimagine its employee experience and modernize HR processes

Dec lsquo17 NA International payment provider NA MYMM Leverage Designitrsquos expertise in technology product and service design

Tech

M

Seprsquo 19 US ATampT gt1000 MY Accelerate ATampTrsquos IT network application shared systems

modernization and movement to the cloud

Janrsquo 20 US Jackson Life Insurance

(subsidiary of Prudential)

800 MY To provide infrastructure management services application

development and maintenance to Jackson and Prudential assets in India

Source Companies PhillipCapital India Research (MYMM ndash Multi Year Multi Million)

Strong management team with great experience

As LTI became an independent listed entity in 2016 it started attracting global talent to grow its business Right from the CEO Mr Sanjay Jalona whom the company hired from Infosys LTI has hired leading industry experienced executives from Infosys CapGemini and Cognizant over the last four years MTCL on the other hand has always grown by hiring laterals from its competitors ndash the exercise just got a fillip as the LampT group post its hostile takeover of MTCL tried to fill in the vacancies created by exodus of employees after the takeover As a result LTI + MTCL today have an exceptionally strong leadership team across functions which should help enable the merged entity continue traversing the growth path In fact we fear that the merged entity might end up having a lsquoproblem of plentyrsquo as it looks to eliminate duplicate roles



Both managements are strong with great industry experience Date Name Designation Former employers Former designation

LTI Apr-19 Deepak Khosla Chief Business Officer Emerging Markets NIIT Tech President Asia Dec-18 Nachiket Deshpande Chief Operating Officer (COO) Cognizant Tech Senior VP amp global delivery head (BFSI) Oct-18 Virender Soni Talent Acquisition Leader NCR Corp Capgemini Talent Acquisition Leader Jul-18 Ajay Tripathi Chief Human Resources Officer Atos Senior vice president amp HR - India Nov-17 Naheed Faiz Head - Global Leadership Hiring Atos Head of Recruitment Oct-17 Satya Samal SVP and Chief Business Officer Europe NIIT Tech Infosys Executive Vice President and Head of Europe Sep-16 Sudhir Chaturvedi President Sales NIIT Tech Infosys Chief Operating Officer Oct-15 Rohit Kedia Chief Business Officer Manufacturing amp

ERP Americas Infosys Vice President and Head - Manufacturing

Americas Sep-15 Siddharth Bohra Chief Business Officer Tech Media

Consumer Lifesciences Head - Digital Infosys Vice President and Head of Hi-tech (Americas)

Sep-15 Peeyush Dubey Chief Marketing Officer Mindtree Infosys General Manager Global Marketing Aug-15 Sanjay Jalona Chief Executive Officer (CEO) and

Managing Director (MD) Infosys Executive Vice President amp Global Head - Hi-

Tech Manufacturing and Engineering Services

Mindtree Mar-20 Dayapatra Nevatia Chief Operating Officer Accenture Wipro MD and Director of Delivery - Advanced

Technology Centers India Oct-19 Manikandesh Venkatchalam SVP and Industry Head Strategic Deals Genpact Vice President Oct-19 Vijay Ram Vice President and Global Head of

Communications Media amp Technology Infosys Associate Vice President amp Global Client Partner

Sep-19 Paneesh Rao Chief People Officer LTTS Chief HR officer Aug-19 Debashis Chatterjee Chief Executive Officer (CEO) and

Managing Director (MD) Cognizant Technologies President of global delivery

Aug-17 Sreedhar Bhagavatheeswaran

SVP and Head of Digital Business TCS Global Head of Sales amp Solutions - TCS Digital Interactive


Strong cash position ndash inorganic growth opportunities LTI+MTCL currently have cumulative cash reserve of Rs 41bn This is a very strong cash position ndash representing 30 of its balance sheet and would enable the merged entity to seek inorganic avenues of growth ndash not just for delivery capabilities but also to boost growth As ISG highlighted recently ndash lots of inefficiently run captives in South Asia (including India) are likely to be sold-off by their parents and companies like TCS Infosys or CTSH would be willing buyers (as they have historically been) LTI+MTCL too would be a big contender for such acquisitions in our opinion

Focussed acquisitions have been growth drivers for LTI and Mindtree Time Acquired entity Country Description Consideration ($mn)

LampT Infotech Acquisitions

Dec 2006 GDA Technologies US Electronic Design Services and Silicon Intellectual Provider NA

Jan 2011 Citigroup Fund Services Canada Captive centre of Citigroup Canada 47

Oct 2014 ISRC US IT unit of Otis Elevator 13

Oct 2016 Augment IQ India Big Data Platform NA

Nov 2017 Syncordis Europe To enhance core banking implementation capabilities 23

Jan 2019 Ruletronics US Pega-systems Implementation partner 8

Feb 2019 NIELSEN + PARTNER Germany Temenos WealthSuite Specialist 32

Jul 2019 Lymbyc Solutions India AI Machine Learning and Advanced Analytics co with proprietary product ldquoLenirdquo 54

Mindtree Acquisition

Jan 16 Magnet 360 US Salesforce platform 50

Jul 15 Relational Solutions Inc US IT solutions ndash CPG 10

Jul 15 Bluefin Solutions UK IT solutions SAP HANA solutions 635

Jan 15 Discoverture Solutions US PampC Insurance 15




Challenges to the merger Notwithstanding the immense benefits and synergies we acknowledge that the merger of the two companies is easier on paper than in reality We foresee multiple challenges to the merger and for the merged entity

Work culture LTI and MTCL operate in different work environments MTCL was lsquoborn digitalrsquo and is known to be highly result-oriented ndash offering its employees flexible working hours and adequate infrastructure (for example laptops for every developer) LTI on the other hand is probably more process-oriented and have a much more disciplined work environment ndash especially being part of the larger LampT group Integrating the two work cultures could be a long drawn out and painful process and could lead to significant attrition

Employee pyramid The employee pyramid in both companies is different Getting it to even out would be a difficult task and is sure to lead to the exits of a few key individuals At the same time as two people from each entity fight for the same role in the merged entity few senior management people are also likely to leave the organization

Common assets Both companies operate in the same geographies with the US and the UK being the primary ones Northern Europe having a higher share than other parts of Europe and APAC and Middle East completing the RoW pie Both of them would have common assets in those geographies (primarily SampM staff) many of whom would become redundant after integration Relocating them to other regionsverticals would be difficult to manage and would lead to attrition in the pre-stabilisation period

Top management And finally one of the biggest issues would be ndash who will run the merged entity We believe that the recent five-year extension of Mr Sanjay Jalona as CEO of LTI is an indication of him being preferred for the top job While this might be in the best interest of the merged entity keeping the lsquoother sidersquo happy and preventing attrition could prove a key challenge

Top client concentration and its contribution to growth

One of the primary concerns about MTCL has been the lopsided growth from its top client ndash Microsoft (MS) The client contributes to 22 of MTCLrsquos current revenue (FY20) and constituted 49 of its incremental revenues in FY20 It has reported strong growth quarter after quarter and leads to concerns about the high revenue concentration MTCLrsquos lopsided growth driven by it top-client has been a concern FY15 FY16 FY17 FY18 FY19 FY20

Total revenue ($ mn) 584 714 780 847 1001 1089

Top Client revenue ($ mn) 55 79 109 140 199 242

of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215

of Incremental revenue 182 184 460 457 383 489


While we acknowledge the risk we note that MTCL is not yet among MSrsquos top-3 vendors MTCL works across multiple functions for MS including its fastest growing Azure business Its business with MS continues to expand in

Data analytics amp support for new applications

Infrastructure support for any new products

Cloud ops ndash helping migrate to Azure platform and post migration support

Other enterprise IT offerings like testing automation and engineering We believe that as MS benefits from higher cloud adoption in a post-Covid world MTCL would continue to benefit from its growth Also post-merger MS will form only 9 of the revenue of the merged entity ndash still being its largest client but with lower revenue contribution This ensures that even if in the worst-case scenario the account deceleratesdeclines at some point ndash its impact on overall revenue and growth will be limited and could be recuperated from growth in other accounts



How to play this merger theme ndash LTIMTCLboth Having established the validity of the merger hypothesis and significant probability of making handsome returns in the process we now come to the execution part of the hypothesis We believe investors can play the hypothesis through either of the two stocks ndash or both if they donrsquot mind doubling down on the hypothesis Both LTI and MTCL are trading at similar valuations (LTI 18x MTCL 17x FY22 PE) ndash and hence offer very little differentiation in terms of road to the eventual return realization However we note the following proscons with the stocks BUY LampT Infotech ndash CMP Rs 1880 Target Rs 2120 Pros

Stable revenuemargin profile More certainty of financials reduces the downside in case of external shock

Management of the merged LTI+MTCL entity is likely to comprise of more people from LTIrsquos senior management team than MTCL

Cons

Few variables so lower probability of unexpected positive surprise or better than expected performance

Most expensive stock in the midcap space (and largecap too excluding TCS) Also LTI is slightly more expensive than MTCL so potential for rerating is limited

Higher exposure (15) to the lsquosegment of concernrsquo (EnergyUtilities) impacted by Covid-19 (due to low crude prices)

BUY Mindtree ndash CMP Rs 909 Target Rs 1050 Pros

Multiple margin levers so there is a high probability of better-than-expected margin expansion as seen in Q3Q4Y20 results

Slightly cheaper than LTI trading at 17x FY22PE (vs 18x for LTI) so there is slightly higher scope for rerating

Cons

More volatile performance than LTI hence higher downside in case of external shock

Higher exposure (17) to the most impacted vertical (TravelTransport) by Covid-19 ndash the company also has 2 TTL clients in its top-10 clients list

High dependency on top client which contributed to 49 of incremental growth in FY20

BUY BOTH LampT Infotech amp Mindtree Pros

Diversification across the two companies will help protect the downside in case one of the two face some temporary challenges (internalexternal)

Cons

Akin to putting all your eggs in the same basket (the merger hypothesis)

Duplicity of investment ndash as both stocks trading at almost similar valuations will offer the same upside



Financials and Recommendations We maintain our estimates for all companies under coverage However we upgrade our multiples for a few on better growth visibility andor better market environment We upgrade our target multiple for

All largecaps (excl TechM) ndash as they will continue to be preferred over midcaps owing to their diversified business profile

LampT Infotech and Mindtree ndash on the back of our thesis in this report of the combined LTI+MTCL entity breaking into the top-5 club over next two years

Recommendation summary CMP Mkt Cap Old Target New Target Price Upside Rating Rs Rs bn Multiple Multiple Target (Rs)

TCS 2036 7635 220 250 2420 19 BUY Infosys 713 3101 180 200 870 22 BUY Wipro 218 1310 100 120 220 1 NEU HCL Tech 578 1568 130 140 640 11 BUY Tech Mahindra 536 475 90 - 440 -18 SELL

LampT Infotech 1880 327 180 200 2120 13 BUY LampT Tech 1335 139 130 - 1140 -15 NEU MindTree 909 149 180 190 1050 16 BUY Cyient 217 24 60 - 165 -24 SELL NIIT Tech 1372 85 150 - 1315 -4 NEU Persistent 584 46 100 - 500 -14 NEU Mphasis 859 166 140 - 970 13 BUY Hexaware 323 96 140 - 330 2 NEU

Valuation snapshot

________ROE ()________ _________PE (x)__________ ________PB (x)__________ ______Div Yield ()______

Companies FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E

TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21

Financial snapshot USD Revenue growth () EBIT margins () EPS growth ()

FY20 FY21 FY22 FY20 FY21 FY22 FY20 FY21 FY22

TCS 54 -40 80 246 240 252 27 -21 147 Infosys 83 -30 91 213 207 216 115 -42 144 Wipro 17 -48 76 173 166 175 140 -55 137 HCL Tech 151 01 90 196 187 194 93 -04 116 Tech M 43 -49 86 116 104 115 -46 -127 198

LampT Infotech 130 00 120 161 154 165 03 03 211 LampT Tech 88 -50 102 165 158 168 65 -72 189 MindTree 87 -34 100 101 114 126 -163 138 266 Cyient -53 -182 71 92 52 76 -294 -359 378 NIIT Tech 123 00 106 131 122 135 94 -15 228 Persistent 43 -29 63 92 96 99 02 15 109 Mphasis 108 -32 81 160 153 162 136 -78 185 Hexaware 171 11 98 139 121 131 94 -70 186



LampT INFOTECH COMPANY UPDATE

Financials (LampT Infotech)

Income Statement YE Mar Rs mn FY19 FY20 FY21E FY22E

Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804

Employee expenses -61643 -73589 -77824 -87694

Other Operating expenses -13980 -14905 -15722 -17375

EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453

Others (Minorities Associates) 0 0 0 0

Net Profit 15157 15199 15241 18453

Growth 305 03 03 211

Net Profit (adjusted) 15157 15199 15241 18453

Wtd avg shares (m) 174 174 174 174

US$ Revenues FY19 FY20 FY21E FY22E

US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760

Balance Sheet YE Mar Rs mn FY19 FY20 FY21E FY22E

Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446

Loans amp advances 3854 2422 2795 3300

Other current assets 0 0 0 0

Total current assets 31849 35215 35335 44489

Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088

Non-current assets 5641 8020 7022 8139

Total assets 66692 88248 92270 107941 abcd

Current liabilities 13981 19415 15664 17885

Provisions 3335 14600 12700 13265

Total current liabilities 17316 34015 28364 31150

Non-current liabilities 430 182 182 182

Total liabilities 17746 34197 28546 31332

Paid-up capital 174 174 174 174

Reserves amp surplus 48772 53877 63550 76435

Shareholdersrsquo equity 48946 54051 63724 76609

Total equity amp liabilities 66692 88248 92270 107941

Source Company PhillipCapital India Research Estimates

Cash Flow YE Mar Rs mn FY19 FY20 FY21E FY22E

Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337

Chg in working capital -2870 12056 -4616 -3151

Total tax paid -4771 -5726 -5080 -6151

Cash flow from operating activities 14109 29085 13787 18638

Capital expenditure -4011 -13105 -4061 -4737

Chg in investments -4759 -4784 -4000 -4000

Chg in marketable securities 0 0 0 0

Other investing activities 0 0 0 0

Cash flow from investing activities -8770 -17889 -8061 -8737

Free cash flow 5339 11196 5726 9901

Equity raised(repaid) 2 0 0 0

Debt raised(repaid) 0 0 0 0

Dividend (incl tax) -5686 -5242 -5568 -5568

Other financing activities 862 -4852 0 0

Cash flow from financing activities -4822 -10094 -5568 -5568

Net chg in cash 20279 20024 20322 24603

Valuation Ratios

FY19 FY20 FY21E FY22E

Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211

Book NAVshare (INR) 2813 3106 3662 4403

CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320

Return ratios Return on assets () 253 203 175 189

Return on equity () 310 281 239 241

Return on capital employed () 321 258 217 228

Turnover ratios Asset turnover (x) 43 40 35 35

SalesTotal assets (x) 16 14 13 13

SalesNet FA (x) 116 75 56 61

Working capitalSales (x) 01 01 01 01

Receivable days 921 924 866 884

Payable days 225 617 487 496

Working capital days 530 354 455 474

Liquidity ratios

Current ratio (x) 23 18 23 25

Quick ratio (x) 23 18 23 25

Interest cover (x) 1638 213 200 242

Dividend cover (x) 31 31 27 33

Total debtEquity () - 06 05 04

Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08

PriceBook (x) 67 61 48 40

Yield () 15 15 17 17

EVNet sales (x) 34 30 26 23

EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138


MINDTREE COMPANY UPDATE

Financials (Mindtree)


Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126

Other Operating expenses 893 948 1208 1517

Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748

Gross fixed assets 9669 14092 14892 15692

Add Capital WIP 297 136 136 136

Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863



Chg in investments -772 288 -2000 0


Free cash flow 1171 11115 2958 7071


Debt raised(repaid) -4 -5 0 0




Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130






SalesNet FA (x) 72 64 54 57



Payable days 131 141 143 143


Liquidity ratios




Total debtEquity () 00 - - -

Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119



Stock Price Price Target and Rating History (LampT INFOTECH)

Stock Price Price Target and Rating History (MINDTREE)

N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500

J-18 F-18 A-18 M-18 J-18 A-18 S-18 N-18 D-18 F-19 M-19 M-19 J-19 J-19 S-19 N-19 D-19 J-20 M-20 A-20

S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400

J-17 J-17 A-17 O-17 N-17 J-18 F-18 A-18 M-18 J-18 A-18 O-18 N-18 J-19 F-19 M-19M-19 J-19 A-19 S-19 N-19 D-19 F-20 M-20M-20



Rating Methodology We rate stock on absolute return basis Our target price for the stocks has an investment horizon of one year We have different threshold for large market capitalisation stock and Midsmall market capitalisation stock The categorisation of stock based on market capitalisation is as per the SEBI requirement

Large cap stocks Rating Criteria Definition

BUY gt= +10 Target price is equal to or more than 10 of current market price

NEUTRAL -10 gt to lt +10 Target price is less than +10 but more than -10

SELL lt= -10 Target price is less than or equal to -10

Mid cap and Small cap stocks Rating Criteria Definition




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This report is issued by PhillipCapital (India) Pvt Ltd which is regulated by the SEBI PhillipCapital (India) Pvt Ltd is a subsidiary of Phillip (Mauritius) Pvt Ltd References to PCIPL in this report shall mean PhillipCapital (India) Pvt Ltd unless otherwise stated This report is prepared and distributed by PCIPL for information purposes only and neither the information contained herein nor any opinion expressed should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security investment or derivatives The information and opinions contained in the report were considered by PCIPL to be valid when published The report also contains information provided to PCIPL by third parties The source of such information will usually be disclosed in the report Whilst PCIPL has taken all reasonable steps to ensure that this information is correct PCIPL does not offer any warranty as to the accuracy or completeness of such information Any person placing reliance on the report to undertake trading does so entirely at his or her own risk and PCIPL does not accept any liability as a result Securities and Derivatives markets may be subject to rapid and unexpected price movements and past performance is not necessarily an indication of future performance

This report does not regard the specific investment objectives financial situation and the particular needs of any specific person who may receive this report Investors must undertake independent analysis with their own legal tax and financial advisors and reach their own conclusions regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realised Under no circumstances can it be used or considered as an offer to sell or as a solicitation of any offer to buy or sell the securities mentioned within it The information contained in the research reports may have been taken from trade and statistical services and other sources which PCIL believe is reliable PhillipCapital (India) Pvt Ltd or any of its groupassociateaffiliate companies do not guarantee that such information is accurate or complete and it should not be relied upon as such Any opinions expressed reflect judgments at this date and are subject to change without notice

Important These disclosures and disclaimers must be read in conjunction with the research report of which it forms part Receipt and use of the research report is subject to all aspects of these disclosures and disclaimers Additional information about the issuers and securities discussed in this research report is available on request

Certifications The research analyst(s) who prepared this research report hereby certifies that the views expressed in this research report accurately reflect the research analystrsquos personal views about all of the subject issuers andor securities that the analyst(s) have no known conflict of interest and no part of the research analystrsquos compensation was is or will be directly or indirectly related to the specific views or recommendations contained in this research report

Additional Disclosures of Interest Unless specifically mentioned in Point No 9 below 1 The Research Analyst(s) PCIL or its associates or relatives of the Research Analyst does not have any financial interest in the company(ies) covered in

this report 2 The Research Analyst PCIL or its associates or relatives of the Research Analyst affiliates collectively do not hold more than 1 of the securities of the

company (ies)covered in this report as of the end of the month immediately preceding the distribution of the research report 3 The Research Analyst hisher associate hisher relative and PCIL do not have any other material conflict of interest at the time of publication of this

research report 4 The Research Analyst PCIL and its associates have not received compensation for investment banking or merchant banking or brokerage services or for

any other products or services from the company(ies) covered in this report in the past twelve months 5 The Research Analyst PCIL or its associates have not managed or co-managed in the previous twelve months a private or public offering of securities for

the company (ies) covered in this report 6 PCIL or its associates have not received compensation or other benefits from the company(ies) covered in this report or from any third party in

connection with the research report 7 The Research Analyst has not served as an Officer Director or employee of the company (ies) covered in the Research report 8 The Research Analyst and PCIL has not been engaged in market making activity for the company(ies) covered in the Research report 9 Details of PCIL Research Analyst and its associates pertaining to the companies covered in the Research report

Sr no Particulars YesNo



1 Whether compensation has been received from the company(ies) covered in the Research report in the past 12 months for investment banking transaction by PCIL

No

2 Whether Research Analyst PCIL or its associates or relatives of the Research Analyst affiliates collectively hold more than 1 of the company(ies) covered in the Research report

No

3 Whether compensation has been received by PCIL or its associates from the company(ies) covered in the Research report No

4 PCIL or its affiliates have managed or co-managed in the previous twelve months a private or public offering of securities for the company(ies) covered in the Research report

No

5 Research Analyst his associate PCIL or its associates have received compensation for investment banking or merchant banking or brokerage services or for any other products or services from the company(ies) covered in the Research report in the last twelve months

No

Independence PhillipCapital (India) Pvt Ltd has not had an investment banking relationship with and has not received any compensation for investment banking services from the subject issuers in the past twelve (12) months and PhillipCapital (India) Pvt Ltd does not anticipate receiving or intend to seek compensation for investment banking services from the subject issuers in the next three (3) months PhillipCapital (India) Pvt Ltd is not a market maker in the securities mentioned in this research report although it or its affiliatesemployees may have positions in purchase or sell or be materially interested in any of the securities covered in the report

Suitability and Risks This research report is for informational purposes only and is not tailored to the specific investment objectives financial situation or particular requirements of any individual recipient hereof Certain securities may give rise to substantial risks and may not be suitable for certain investors Each investor must make its own determination as to the appropriateness of any securities referred to in this research report based upon the legal tax and accounting considerations applicable to such investor and its own investment objectives or strategy its financial situation and its investing experience The value of any security may be positively or adversely affected by changes in foreign exchange or interest rates as well as by other financial economic or political factors Past performance is not necessarily indicative of future performance or results

Sources Completeness and Accuracy The material herein is based upon information obtained from sources that PCIPL and the research analyst believe to be reliable but neither PCIPL nor the research analyst represents or guarantees that the information contained herein is accurate or complete and it should not be relied upon as such Opinions expressed herein are current opinions as of the date appearing on this material and are subject to change without notice Furthermore PCIPL is under no obligation to update or keep the information current Without limiting any of the foregoing in no event shall PCIL any of its affiliatesemployees or any third party involved in or related to computing or compiling the information have any liability for any damages of any kind including but not limited to any direct or consequential loss or damage however arising from the use of this document

Copyright The copyright in this research report belongs exclusively to PCIPL All rights are reserved Any unauthorised use or disclosure is prohibited No reprinting or reproduction in whole or in part is permitted without the PCIPLrsquos prior consent except that a recipient may reprint it for internal circulation only and only if it is reprinted in its entirety

Caution Risk of loss in tradinginvestment can be substantial and even more than the amount margin given by you Investment in securities market are subject to market risks you are requested to read all the related documents carefully before investing You should carefully consider whether tradinginvestment is appropriate for you in light of your experience objectives financial resources and other relevant circumstances PhillipCapital and any of its employees directors associates group entities or affiliates shall not be liable for losses if any incurred by you You are further cautioned that tradinginvestments in financial markets are subject to market risks and are advised to seek independent third party tradinginvestment advice outside PhillipCapitalgroupassociatesaffiliatesdirectorsemployees before and during your tradinginvestment There is no guaranteeassurance as to returns or profits or capital protection or appreciation PhillipCapital and any of its employees directors associates andor employees directors associates of PhillipCapitalrsquos group entities or affiliates is not inducing you for tradinginvesting in the financial market(s) TradingInvestment decision is your sole responsibility You must also read the Risk Disclosure Document and Dorsquos and Donrsquots before investing

Kindly note that past performance is not necessarily a guide to future performance

For Detailed Disclaimer Please visit our website wwwphillipcapitalin IMPORTANT DISCLOSURES FOR US PERSONS This research report is a product of PhillipCapital (India) Pvt Ltd which is the employer of the research analyst(s) who has prepared the research report PhillipCapital (India) Pvt Ltd is authorized to engage in securities activities in India PHILLIPCAP is not a registered broker-dealer in the United States and therefore is not subject to US rules regarding the preparation of research reports and the independence of research analysts This research report is provided for distribution to ldquomajor US institutional investorsrdquo in reliance on the exemption from registration provided by Rule 15a-6 of the US Securities Exchange Act of 1934 as amended (the ldquoExchange Actrdquo) If the recipient of this report is not a Major Institutional Investor as specified above then it should not act upon this report and return the same to the sender Further this report may not be copied duplicated andor transmitted onward to any US person which is not a Major Institutional Investor

Any US recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report should do so only through Rosenblatt Securities Inc 40 Wall Street 59th Floor New York NY 10005 a registered broker dealer in the United States Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial instruments through PHILLIPCAP Rosenblatt Securities Inc accepts responsibility for the contents of this research report subject to the terms set out below to the extent that it is delivered to a US person other than a major US institutional investor

The analyst whose name appears in this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority (ldquoFINRArdquo) and may not be an associated person of Rosenblatt Securities Inc and therefore may not be subject to applicable restrictions under FINRA Rules on communications with a subject company public appearances and trading securities held by a research analyst account Ownership and Material Conflicts of Interest Rosenblatt Securities Inc or its affiliates does not lsquobeneficially ownrsquo as determined in accordance with Section 13(d) of the Exchange Act 1 or more of any of the equity securities mentioned in the report Rosenblatt Securities Inc its affiliates andor their respective officers directors or employees may have interests or long or short positions and may at any time make purchases or sales as a principal or agent of the securities referred to herein Rosenblatt Securities Inc is not aware of any material conflict of interest as of the date of this publication Compensation and Investment Banking Activities



Rosenblatt Securities Inc or any affiliate has not managed or co-managed a public offering of securities for the subject company in the past 12 months nor received compensation for investment banking services from the subject company in the past 12 months neither does it or any affiliate expect to receive or intends to seek compensation for investment banking services from the subject company in the next 3 months Additional Disclosures This research report is for distribution only under such circumstances as may be permitted by applicable law This research report has no regard to the specific investment objectives financial situation or particular needs of any specific recipient even if sent only to a single recipient This research report is not guaranteed to be a complete statement or summary of any securities markets reports or developments referred to in this research report Neither PHILLIPCAP nor any of its directors officers employees or agents shall have any liability however arising for any error inaccuracy or incompleteness of fact or opinion in this research report or lack of care in this research reportrsquos preparation or publication or any losses or damages which may arise from the use of this research report

PHILLIPCAP may rely on information barriers such as ldquoChinese Wallsrdquo to control the flow of information within the areas units divisions groups or affiliates of PHILLIPCAP

Investing in any non-US securities or related financial instruments (including ADRs) discussed in this research report may present certain risks The securities of non-US issuers may not be registered with or be subject to the regulations of the US Securities and Exchange Commission Information on such non-US securities or related financial instruments may be limited Foreign companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in effect within the United States

The value of any investment or income from any securities or related financial instruments discussed in this research report denominated in a currency other than US dollars is subject to exchange rate fluctuations that may have a positive or adverse effect on the value of or income from such securities or related financial instruments

Past performance is not necessarily a guide to future performance and no representation or warranty express or implied is made by PHILLIPCAP with respect to future performance Income from investments may fluctuate The price or value of the investments to which this research report relates either directly or indirectly may fall or rise against the interest of investors Any recommendation or opinion contained in this research report may become outdated as a consequence of changes in the environment in which the issuer of the securities under analysis operates in addition to changes in the estimates and forecasts assumptions and valuation methodology used herein

No part of the content of this research report may be copied forwarded or duplicated in any form or by any means without the prior written consent of PHILLIPCAP and PHILLIPCAP accepts no liability whatsoever for the actions of third parties in this respect

PhillipCapital (India) Pvt Ltd Registered office 18th floor Urmi Estate Ganpatrao Kadam Marg Lower Parel (West) Mumbai ndash 400013 India



MampA in IT Services ndash we predicted it FIVE years ago Five years ago we published a report (read here) where we highlighted that most midcap IT companies will find it difficult to withstand competition in the rapidly evolving technology landscape and (hence) might look to sell themselves out over the next few years We had also hypothesized that IF one or more of these midcap IT companies could be merged (perhaps facilitated by PE owners) it could lead to the formation of a formidable IT company that could perform much better than its individual components and would also command a valuation premium We had analysed this by taking five niche midcap IT companies with significant PE presence We then created four hypothetical Integrated Entities (IEs) merging three different midcap companies from this set and then analysed the overall profile of these IEs with respect to clients revenue diversification and operating margins Our analysis had revealed that the hypothetical integration would have led to the formation of well-diversified full-service IT companies with a sizeable revenue base ones that were capable of maintaining their competitive edges in niche domains Their profiles would have been very similar to the profiles of the top-5 players which would have led to them being significantly rerated

We predicted MampA activity in the IT midcap space in 2014

Source PhillipCapital India Research We give ourselves a little pat for having predicted this highly hypothetical scenario five years ago (well ahead) accurately Over the last few quarters promoters of multiple midcap companies (Mindtree NIIT Tech KPIT) have exited their businesses In fact over the last four years multiple midcap IT companies have either merged with larger IT companies (iGate Geometric Polaris KPIT Syntel) or have sold significant promoter stake to PE investors (Hexaware Mphasis Zensar) In December 2019 we doubled down on this thesis and released the second part of our ldquoOne + One = Elevenrdquo report (read here) In that report we highlighted our expectations of further MampA activity in the sector and predicted mergers of LTI with Mindtree and Hexaware with NIIT Tech True to our thesis the CEO of LampT group Mr SNSubramanaiam talked about an eventual merger of the two entities in a year or two years (read here) We have long maintained the merger of LTI and MTCL to be an inevitability In this report we highlight how we believe this merger could pave way for the formation of an IT behemoth which could soon displace underperforming largecaps (like Wipro TechM) from the ldquoTop 5rdquo category and in the process would generate handsome returns for investors

HEXW139

NITEC82

KPIT94

POL91

Cyient12

INFO161

TCS193

HCLT145

Wipro139

TechM156

KNP115

HKN147

HKC144

NPC125

PE

(x)

Top 5 client concentration ()

Low

High

LowHigh












Employees 211000 15000 130000





Employees 47000 8800 13000




EVSales 17x 11x 22x





6x

12x

18x

24x

0

100

200

300

400

500

600

700

800

900

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14


















LTI USD Rev 1525 1525 1708 1913 2142

Yoy Growth 130 -00 120 120 120

EBIT 17561 17637 21398


PAT 15199 15241 18453

MTCL USD Rev 1089 1052 1158 1296 1452

Yoy Growth 87 -34 100 120 120

EBIT 7869 9003 11116


PAT 6309 7178 9091

LTI + MTCL USD Rev 2613 2577 2865 3209 3594

Yoy Growth 112 -14 112 120 120

EBIT 25430 26640 32514 38304 44859

EBIT Margins () 136 138 149 155 160

PAT 21508 22419 27543 32201 37813











TCS

CTSH

Infosys

HCLT

Wipro

TechM

LTI

Mphasis Hexaware

LTTS

Cyient

NIIT Tech

Persistent

MindTree LTI+MTCL

0

5

10

15

20

25

400 4000

PE

(x)

USD revenue ($ mn) - 700 3000 8000 20000

Financials 333

IT 147

Oil amp Gas 143

FMCG 106 Auto 56

Industrials 41

TCS 52 Infosys 64


Tech Mahindra 08

Nifty

IT


Nifty IT break-up





TCS 68 62 462 8 7 13

Infosys 51 41 117 8 8 10

Wipro 8 3 68 1 2 5

HCL Tech 34 23 531 13 11 14





TCS 22032 323400 30 38 7635

Infosys 12781 167640 47 25 3101

Wipro 8256 97234 14 17 1310

HCL Tech 9936 110940 79 21 1568

Tech Mahindra 5182 40330 25 18 500

LTI 1525 15199 82 28 327

MindTree 1089 6309 49 20 149

LTI + Mindtree 2613 21508 68 25 476

of TechM 50 53 - - 97




TCS FY06 FY08 20 3QFY06 1QFY08 60 101





Average

40 134 53







466 10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 549 558 567 576 595

16 586 595 605 615 634

17 623 633 643 653 674

18 659 670 681 691 714

20 732 744 756 768 793


10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 18 20 22 24 28

16 26 28 30 32 36

17 34 36 38 40 45

18 42 44 46 49 53

20 57 60 62 65 70




466 10 11 12 13 15

FY2

2

EBIT

Mar

gin

s

13 550 558 567 576 594

14 586 596 605 614 634

15 623 633 643 653 674

16 659 670 681 691 714

17 696 707 718 730 753


10 11 12 13 15

FY2

2

EBIT

Mar

gin

s 13 18 20 22 24 28

14 26 28 30 32 36

15 34 36 38 40 45

16 42 44 46 49 53

17 49 52 54 57 62









Key verticals

BFSI 691 231 922 35

Manf 257 - 257 10

EampUTTL 173 181 354 14

Retail 171 231 402 15


Others 60 - 60 2

Geographies

US 1051 814 1865 71 EU 240 184 424 16 India 125 44 169 6

ROW 108 47 155 6

Horizontals

ADM 551 132 683 26

IMS 176 270 446 17


Digital 310 416 726 28


Testing - 198 198 8






LTI + MTCL 35 - 24 10 15 - 7 7 2 71 16 12


35

21

45

10

0

17

14

17

11

15

21

11

24

41

11

2

0

4

0 10 20 30 40 50 60 70 80 90 100

LTI + MTCL

MTCL

LTI












LTI + MTCL 9 24 33 67


7

4

3

6

3 3

1

6 6

5

0

2

4

6

8


No

of

clie

nts

in t

op

-25

LTI Mindtree

13 22

9

19 13

15

14 10

9

54 55 67

0

20

40

60

80

100

LTI MTCL LTI + MTCL










Total 31437 21911 53348










LTI 220 220 219 215

MTCL 220 216 212 211


LTI 805 789 792 793

MTCL 772 770 770 765


LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree


















-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No




























Employees 211000 15000 130000





Employees 47000 8800 13000




EVSales 17x 11x 22x





6x

12x

18x

24x

0

100

200

300

400

500

600

700

800

900

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14


















LTI USD Rev 1525 1525 1708 1913 2142

Yoy Growth 130 -00 120 120 120

EBIT 17561 17637 21398


PAT 15199 15241 18453

MTCL USD Rev 1089 1052 1158 1296 1452

Yoy Growth 87 -34 100 120 120

EBIT 7869 9003 11116


PAT 6309 7178 9091

LTI + MTCL USD Rev 2613 2577 2865 3209 3594

Yoy Growth 112 -14 112 120 120

EBIT 25430 26640 32514 38304 44859

EBIT Margins () 136 138 149 155 160

PAT 21508 22419 27543 32201 37813











TCS

CTSH

Infosys

HCLT

Wipro

TechM

LTI

Mphasis Hexaware

LTTS

Cyient

NIIT Tech

Persistent

MindTree LTI+MTCL

0

5

10

15

20

25

400 4000

PE

(x)

USD revenue ($ mn) - 700 3000 8000 20000

Financials 333

IT 147

Oil amp Gas 143

FMCG 106 Auto 56

Industrials 41

TCS 52 Infosys 64


Tech Mahindra 08

Nifty

IT


Nifty IT break-up





TCS 68 62 462 8 7 13

Infosys 51 41 117 8 8 10

Wipro 8 3 68 1 2 5

HCL Tech 34 23 531 13 11 14





TCS 22032 323400 30 38 7635

Infosys 12781 167640 47 25 3101

Wipro 8256 97234 14 17 1310

HCL Tech 9936 110940 79 21 1568

Tech Mahindra 5182 40330 25 18 500

LTI 1525 15199 82 28 327

MindTree 1089 6309 49 20 149

LTI + Mindtree 2613 21508 68 25 476

of TechM 50 53 - - 97




TCS FY06 FY08 20 3QFY06 1QFY08 60 101





Average

40 134 53







466 10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 549 558 567 576 595

16 586 595 605 615 634

17 623 633 643 653 674

18 659 670 681 691 714

20 732 744 756 768 793


10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 18 20 22 24 28

16 26 28 30 32 36

17 34 36 38 40 45

18 42 44 46 49 53

20 57 60 62 65 70




466 10 11 12 13 15

FY2

2

EBIT

Mar

gin

s

13 550 558 567 576 594

14 586 596 605 614 634

15 623 633 643 653 674

16 659 670 681 691 714

17 696 707 718 730 753


10 11 12 13 15

FY2

2

EBIT

Mar

gin

s 13 18 20 22 24 28

14 26 28 30 32 36

15 34 36 38 40 45

16 42 44 46 49 53

17 49 52 54 57 62









Key verticals

BFSI 691 231 922 35

Manf 257 - 257 10

EampUTTL 173 181 354 14

Retail 171 231 402 15


Others 60 - 60 2

Geographies

US 1051 814 1865 71 EU 240 184 424 16 India 125 44 169 6

ROW 108 47 155 6

Horizontals

ADM 551 132 683 26

IMS 176 270 446 17


Digital 310 416 726 28


Testing - 198 198 8






LTI + MTCL 35 - 24 10 15 - 7 7 2 71 16 12


35

21

45

10

0

17

14

17

11

15

21

11

24

41

11

2

0

4

0 10 20 30 40 50 60 70 80 90 100

LTI + MTCL

MTCL

LTI












LTI + MTCL 9 24 33 67


7

4

3

6

3 3

1

6 6

5

0

2

4

6

8


No

of

clie

nts

in t

op

-25

LTI Mindtree

13 22

9

19 13

15

14 10

9

54 55 67

0

20

40

60

80

100

LTI MTCL LTI + MTCL










Total 31437 21911 53348










LTI 220 220 219 215

MTCL 220 216 212 211


LTI 805 789 792 793

MTCL 772 770 770 765


LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree


















-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No



































LTI USD Rev 1525 1525 1708 1913 2142

Yoy Growth 130 -00 120 120 120

EBIT 17561 17637 21398


PAT 15199 15241 18453

MTCL USD Rev 1089 1052 1158 1296 1452

Yoy Growth 87 -34 100 120 120

EBIT 7869 9003 11116


PAT 6309 7178 9091

LTI + MTCL USD Rev 2613 2577 2865 3209 3594

Yoy Growth 112 -14 112 120 120

EBIT 25430 26640 32514 38304 44859

EBIT Margins () 136 138 149 155 160

PAT 21508 22419 27543 32201 37813











TCS

CTSH

Infosys

HCLT

Wipro

TechM

LTI

Mphasis Hexaware

LTTS

Cyient

NIIT Tech

Persistent

MindTree LTI+MTCL

0

5

10

15

20

25

400 4000

PE

(x)

USD revenue ($ mn) - 700 3000 8000 20000

Financials 333

IT 147

Oil amp Gas 143

FMCG 106 Auto 56

Industrials 41

TCS 52 Infosys 64


Tech Mahindra 08

Nifty

IT


Nifty IT break-up





TCS 68 62 462 8 7 13

Infosys 51 41 117 8 8 10

Wipro 8 3 68 1 2 5

HCL Tech 34 23 531 13 11 14





TCS 22032 323400 30 38 7635

Infosys 12781 167640 47 25 3101

Wipro 8256 97234 14 17 1310

HCL Tech 9936 110940 79 21 1568

Tech Mahindra 5182 40330 25 18 500

LTI 1525 15199 82 28 327

MindTree 1089 6309 49 20 149

LTI + Mindtree 2613 21508 68 25 476

of TechM 50 53 - - 97




TCS FY06 FY08 20 3QFY06 1QFY08 60 101





Average

40 134 53







466 10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 549 558 567 576 595

16 586 595 605 615 634

17 623 633 643 653 674

18 659 670 681 691 714

20 732 744 756 768 793


10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 18 20 22 24 28

16 26 28 30 32 36

17 34 36 38 40 45

18 42 44 46 49 53

20 57 60 62 65 70




466 10 11 12 13 15

FY2

2

EBIT

Mar

gin

s

13 550 558 567 576 594

14 586 596 605 614 634

15 623 633 643 653 674

16 659 670 681 691 714

17 696 707 718 730 753


10 11 12 13 15

FY2

2

EBIT

Mar

gin

s 13 18 20 22 24 28

14 26 28 30 32 36

15 34 36 38 40 45

16 42 44 46 49 53

17 49 52 54 57 62









Key verticals

BFSI 691 231 922 35

Manf 257 - 257 10

EampUTTL 173 181 354 14

Retail 171 231 402 15


Others 60 - 60 2

Geographies

US 1051 814 1865 71 EU 240 184 424 16 India 125 44 169 6

ROW 108 47 155 6

Horizontals

ADM 551 132 683 26

IMS 176 270 446 17


Digital 310 416 726 28


Testing - 198 198 8






LTI + MTCL 35 - 24 10 15 - 7 7 2 71 16 12


35

21

45

10

0

17

14

17

11

15

21

11

24

41

11

2

0

4

0 10 20 30 40 50 60 70 80 90 100

LTI + MTCL

MTCL

LTI












LTI + MTCL 9 24 33 67


7

4

3

6

3 3

1

6 6

5

0

2

4

6

8


No

of

clie

nts

in t

op

-25

LTI Mindtree

13 22

9

19 13

15

14 10

9

54 55 67

0

20

40

60

80

100

LTI MTCL LTI + MTCL










Total 31437 21911 53348










LTI 220 220 219 215

MTCL 220 216 212 211


LTI 805 789 792 793

MTCL 772 770 770 765


LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree


















-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No



























TCS

CTSH

Infosys

HCLT

Wipro

TechM

LTI

Mphasis Hexaware

LTTS

Cyient

NIIT Tech

Persistent

MindTree LTI+MTCL

0

5

10

15

20

25

400 4000

PE

(x)

USD revenue ($ mn) - 700 3000 8000 20000

Financials 333

IT 147

Oil amp Gas 143

FMCG 106 Auto 56

Industrials 41

TCS 52 Infosys 64


Tech Mahindra 08

Nifty

IT


Nifty IT break-up





TCS 68 62 462 8 7 13

Infosys 51 41 117 8 8 10

Wipro 8 3 68 1 2 5

HCL Tech 34 23 531 13 11 14





TCS 22032 323400 30 38 7635

Infosys 12781 167640 47 25 3101

Wipro 8256 97234 14 17 1310

HCL Tech 9936 110940 79 21 1568

Tech Mahindra 5182 40330 25 18 500

LTI 1525 15199 82 28 327

MindTree 1089 6309 49 20 149

LTI + Mindtree 2613 21508 68 25 476

of TechM 50 53 - - 97




TCS FY06 FY08 20 3QFY06 1QFY08 60 101





Average

40 134 53







466 10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 549 558 567 576 595

16 586 595 605 615 634

17 623 633 643 653 674

18 659 670 681 691 714

20 732 744 756 768 793


10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 18 20 22 24 28

16 26 28 30 32 36

17 34 36 38 40 45

18 42 44 46 49 53

20 57 60 62 65 70




466 10 11 12 13 15

FY2

2

EBIT

Mar

gin

s

13 550 558 567 576 594

14 586 596 605 614 634

15 623 633 643 653 674

16 659 670 681 691 714

17 696 707 718 730 753


10 11 12 13 15

FY2

2

EBIT

Mar

gin

s 13 18 20 22 24 28

14 26 28 30 32 36

15 34 36 38 40 45

16 42 44 46 49 53

17 49 52 54 57 62









Key verticals

BFSI 691 231 922 35

Manf 257 - 257 10

EampUTTL 173 181 354 14

Retail 171 231 402 15


Others 60 - 60 2

Geographies

US 1051 814 1865 71 EU 240 184 424 16 India 125 44 169 6

ROW 108 47 155 6

Horizontals

ADM 551 132 683 26

IMS 176 270 446 17


Digital 310 416 726 28


Testing - 198 198 8






LTI + MTCL 35 - 24 10 15 - 7 7 2 71 16 12


35

21

45

10

0

17

14

17

11

15

21

11

24

41

11

2

0

4

0 10 20 30 40 50 60 70 80 90 100

LTI + MTCL

MTCL

LTI












LTI + MTCL 9 24 33 67


7

4

3

6

3 3

1

6 6

5

0

2

4

6

8


No

of

clie

nts

in t

op

-25

LTI Mindtree

13 22

9

19 13

15

14 10

9

54 55 67

0

20

40

60

80

100

LTI MTCL LTI + MTCL










Total 31437 21911 53348










LTI 220 220 219 215

MTCL 220 216 212 211


LTI 805 789 792 793

MTCL 772 770 770 765


LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree


















-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No























TCS 68 62 462 8 7 13

Infosys 51 41 117 8 8 10

Wipro 8 3 68 1 2 5

HCL Tech 34 23 531 13 11 14





TCS 22032 323400 30 38 7635

Infosys 12781 167640 47 25 3101

Wipro 8256 97234 14 17 1310

HCL Tech 9936 110940 79 21 1568

Tech Mahindra 5182 40330 25 18 500

LTI 1525 15199 82 28 327

MindTree 1089 6309 49 20 149

LTI + Mindtree 2613 21508 68 25 476

of TechM 50 53 - - 97




TCS FY06 FY08 20 3QFY06 1QFY08 60 101





Average

40 134 53







466 10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 549 558 567 576 595

16 586 595 605 615 634

17 623 633 643 653 674

18 659 670 681 691 714

20 732 744 756 768 793


10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 18 20 22 24 28

16 26 28 30 32 36

17 34 36 38 40 45

18 42 44 46 49 53

20 57 60 62 65 70




466 10 11 12 13 15

FY2

2

EBIT

Mar

gin

s

13 550 558 567 576 594

14 586 596 605 614 634

15 623 633 643 653 674

16 659 670 681 691 714

17 696 707 718 730 753


10 11 12 13 15

FY2

2

EBIT

Mar

gin

s 13 18 20 22 24 28

14 26 28 30 32 36

15 34 36 38 40 45

16 42 44 46 49 53

17 49 52 54 57 62









Key verticals

BFSI 691 231 922 35

Manf 257 - 257 10

EampUTTL 173 181 354 14

Retail 171 231 402 15


Others 60 - 60 2

Geographies

US 1051 814 1865 71 EU 240 184 424 16 India 125 44 169 6

ROW 108 47 155 6

Horizontals

ADM 551 132 683 26

IMS 176 270 446 17


Digital 310 416 726 28


Testing - 198 198 8






LTI + MTCL 35 - 24 10 15 - 7 7 2 71 16 12


35

21

45

10

0

17

14

17

11

15

21

11

24

41

11

2

0

4

0 10 20 30 40 50 60 70 80 90 100

LTI + MTCL

MTCL

LTI












LTI + MTCL 9 24 33 67


7

4

3

6

3 3

1

6 6

5

0

2

4

6

8


No

of

clie

nts

in t

op

-25

LTI Mindtree

13 22

9

19 13

15

14 10

9

54 55 67

0

20

40

60

80

100

LTI MTCL LTI + MTCL










Total 31437 21911 53348










LTI 220 220 219 215

MTCL 220 216 212 211


LTI 805 789 792 793

MTCL 772 770 770 765


LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree


















-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No























466 10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 549 558 567 576 595

16 586 595 605 615 634

17 623 633 643 653 674

18 659 670 681 691 714

20 732 744 756 768 793


10 11 12 13 15

Mu

ltip

le

(FY2

4 P

E) 15 18 20 22 24 28

16 26 28 30 32 36

17 34 36 38 40 45

18 42 44 46 49 53

20 57 60 62 65 70




466 10 11 12 13 15

FY2

2

EBIT

Mar

gin

s

13 550 558 567 576 594

14 586 596 605 614 634

15 623 633 643 653 674

16 659 670 681 691 714

17 696 707 718 730 753


10 11 12 13 15

FY2

2

EBIT

Mar

gin

s 13 18 20 22 24 28

14 26 28 30 32 36

15 34 36 38 40 45

16 42 44 46 49 53

17 49 52 54 57 62









Key verticals

BFSI 691 231 922 35

Manf 257 - 257 10

EampUTTL 173 181 354 14

Retail 171 231 402 15


Others 60 - 60 2

Geographies

US 1051 814 1865 71 EU 240 184 424 16 India 125 44 169 6

ROW 108 47 155 6

Horizontals

ADM 551 132 683 26

IMS 176 270 446 17


Digital 310 416 726 28


Testing - 198 198 8






LTI + MTCL 35 - 24 10 15 - 7 7 2 71 16 12


35

21

45

10

0

17

14

17

11

15

21

11

24

41

11

2

0

4

0 10 20 30 40 50 60 70 80 90 100

LTI + MTCL

MTCL

LTI












LTI + MTCL 9 24 33 67


7

4

3

6

3 3

1

6 6

5

0

2

4

6

8


No

of

clie

nts

in t

op

-25

LTI Mindtree

13 22

9

19 13

15

14 10

9

54 55 67

0

20

40

60

80

100

LTI MTCL LTI + MTCL










Total 31437 21911 53348










LTI 220 220 219 215

MTCL 220 216 212 211


LTI 805 789 792 793

MTCL 772 770 770 765


LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree


















-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No
























Key verticals

BFSI 691 231 922 35

Manf 257 - 257 10

EampUTTL 173 181 354 14

Retail 171 231 402 15


Others 60 - 60 2

Geographies

US 1051 814 1865 71 EU 240 184 424 16 India 125 44 169 6

ROW 108 47 155 6

Horizontals

ADM 551 132 683 26

IMS 176 270 446 17


Digital 310 416 726 28


Testing - 198 198 8






LTI + MTCL 35 - 24 10 15 - 7 7 2 71 16 12


35

21

45

10

0

17

14

17

11

15

21

11

24

41

11

2

0

4

0 10 20 30 40 50 60 70 80 90 100

LTI + MTCL

MTCL

LTI












LTI + MTCL 9 24 33 67


7

4

3

6

3 3

1

6 6

5

0

2

4

6

8


No

of

clie

nts

in t

op

-25

LTI Mindtree

13 22

9

19 13

15

14 10

9

54 55 67

0

20

40

60

80

100

LTI MTCL LTI + MTCL










Total 31437 21911 53348










LTI 220 220 219 215

MTCL 220 216 212 211


LTI 805 789 792 793

MTCL 772 770 770 765


LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree


















-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No





























LTI + MTCL 9 24 33 67


7

4

3

6

3 3

1

6 6

5

0

2

4

6

8


No

of

clie

nts

in t

op

-25

LTI Mindtree

13 22

9

19 13

15

14 10

9

54 55 67

0

20

40

60

80

100

LTI MTCL LTI + MTCL










Total 31437 21911 53348










LTI 220 220 219 215

MTCL 220 216 212 211


LTI 805 789 792 793

MTCL 772 770 770 765


LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree


















-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No



























Total 31437 21911 53348










LTI 220 220 219 215

MTCL 220 216 212 211


LTI 805 789 792 793

MTCL 772 770 770 765


LTI 183 184 177 165

MTCL 151 130 172 174


0

500

1000

1500

2000

2500

3000

Fres

her

Soft

war

eEn

gg

Sr S

oft

En

gg

Ass

o C

on

stlt

Co

nsu

ltan

t

Sen

ior

Co

nsl

t

Pro

ject

Lead

er

Pro

ject

Man

ager

Sr P

roje

ctM

gr

Rs

00

0

LTI Mindtree


















-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

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ere

d

Re

gist

ere

d

Me

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er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No

































-5

0

5

10

15

20


US$

Rev

enu

e gr

ow

th (

y

oy)


140

97

104

128

101

114

126

8

9

10

11

12

13

14

15


Annual EBIT Margins

116

131 136

129

64

93

120 125

6

7

8

9

10

11

12

13

14








LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No
























LTI + MTCL 24 12 17







cagr


LTI + MTCL 35 7 12 15 12 15














Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

er

Serv

ice

par

tne

r

Mp

n p

artn

er

Re

gist

ere

d

Re

gist

ere

d

Me

mb

er

Re

gist

ere

d

Re

gist

ere

d

Pla

tin

um

GSS

P

Go

ld

Pre

mie

r

Go

ld

Pre

mie

r

Pla

tin

um

Elit

e

Pla

tin

um

GSS

P

Go

ld

Ad

van

ced

Pre

mie

r

Par

tner

Pre

mie

r

Go

ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No































Revenue 70215





Total 44212 630 54668 579

Other Expenses









Total 15358 219 20957 222


54

58 58

63

48

50

52

54

56

58

60

62

64


LTI MTCL

3

8

4

2

4

8

1 2

0

1

2

3

4

5

6

7

8


ComputerConsumables

Lease Rentals

LTI MTCL













Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





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Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No






























Schaumburg IL

Hartford CT

Glendale WI

Tampa FL

Jupiter FL

Plano TX

Irving TX

Houston TX

Cincinnati OH

Pleasanton CA


Alpharetta GA

Bellevue WA

Chicago IL

Cleveland OH

Dallas TX

San Jose CA

Scottsdale AZ

Redmond WA

Gainesville FL

Minneapolis MN


Belfast NIreland

Madrid Spain

Espoo Finland

Oslo Norway


Cologne

Germany

Vianen

Netherlands





Toronto Canada


Dubai

Sydney AusSingapore

Tokyo JapanShanghai

China





Silv

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par

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Re

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Elit

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Pre

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Pre

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ld


Highest Level

Entry Level








operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No


























operations

TCS

















HCLT



AWS public cloud



Wipro







Tech

M






















































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No































































Total revenue ($ mn) 584 714 780 847 1001 1089


of Total revenue 94 110 140 165 199 222

YoY growth 377 436 385 282 424 215













Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No
























Cons







Cons






Cons











Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No



























Valuation snapshot



TCS 375 329 339 237 242 211 89 80 72 36 28 33

Infosys 255 219 223 179 186 163 45 41 36 25 28 31

Wipro 174 149 152 128 135 119 22 20 18 05 28 28

HCL Tech 215 182 174 141 141 127 30 26 22 14 14 14

Tech Mahindra 185 147 157 116 132 111 21 19 17 28 28 28

LampT Infotech 281 239 241 215 215 177 61 51 43 15 17 17

LampT Tech 296 231 228 167 180 152 50 42 35 16 17 17

MindTree 200 196 209 235 207 163 47 41 34 14 14 14

Cyient 134 81 104 68 106 77 09 09 08 71 24 47

NIIT Tech 188 169 184 185 187 153 35 32 28 23 24 26

Persistent 143 131 131 133 131 118 19 17 15 20 20 22

Mphasis 203 174 190 134 145 122 27 25 23 41 41 47

Hexaware 232 187 200 147 158 133 34 29 27 21 21 21










Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No























Net sales 94458 108786 114344 129804

Growth 29 15 5 14

Total income 94458 108786 114344 129804



EBITDA (Core) 18835 20292 20798 24734

Growth 508 77 25 189

Margin 199 187 182 191

Depreciation -1471 -2731 -3161 -3337

EBIT 17364 17561 17637 21398

Growth 588 11 04 213

Margin 184 161 154 165

Interest paid -106 -826 -884 -884

Other Income 3021 3289 3569 4090

Pre-tax profit 20279 20024 20322 24603

Tax provided -5122 -4825 -5080 -6151

Profit after tax 15157 15199 15241 18453


Net Profit 15157 15199 15241 18453

Growth 305 03 03 211


Wtd avg shares (m) 174 174 174 174


US$ Revenue ($ mn) 1349 1525 1525 1708

Growth 191 130 (00) 120

Re US$ (rate) 700 714 750 760


Cash amp bank 4150 5252 5410 9743

Debtors 23845 27541 27130 31446




Investments 17402 22186 26186 30186

Net fixed assets 9414 19788 20688 22088




Provisions 3335 14600 12700 13265










Pre-tax profit 20279 20024 20322 24603

Depreciation 1471 2731 3161 3337


Total tax paid -4771 -5726 -5080 -6151







Free cash flow 5339 11196 5726 9901






Net chg in cash 20279 20024 20322 24603

Valuation Ratios


Per Share data

EPS (INR) 871 874 876 1060

Growth 280 03 03 211


CEPS (INR) 956 1030 1058 1252

CFPS (INR) 939 1723 633 1007

DPS (INR) 279 280 320 320






SalesNet FA (x) 116 75 56 61



Payable days 225 617 487 496


Liquidity ratios






Net debtEquity () (85) (91) (80) (123)

Valuation

PER (x) 216 215 200 165

PEG (x) - y-o-y growth 08 778 723 08


Yield () 15 15 17 17


EVEBITDA (x) 172 159 144 120

EVEBIT (x) 186 184 170 138





Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No























Net sales 70215 77643 78918 87973

Growth 285 106 16 115

Total income 70215 77643 78918 87973


SGampA -15358 -16373 -15389 -17155

EBITDA (Core) 10645 10623 11857 14152

Growth 438 (02) 116 194

Margin 152 137 150 161

Depreciation -1641 -2754 -2854 -3035

EBIT 9004 7869 9003 11116

Growth 582 (126) 144 235

Margin 128 101 114 126


Pre-tax profit 9868 8288 9700 12121

Tax provided -2327 -1979 -2522 -3030

Profit after tax 7541 6309 7178 9091

Net Profit 7541 6309 7178 9091

Growth 323 (163) 138 266


Wtd avg shares (m) 164 164 164 164


US$ Revenue ($ mn) 1001 1089 1052 1158

Growth 183 87 (34) 100

Re US$ (rate) 701 713 750 760


Cash amp bank 2562 5870 6697 11638

Debtors 13356 14389 15573 17134




Investments 8036 7748 9748 9748



Net fixed assets 9966 14228 15028 15828


Total assets 41790 51566 56322 64359


Provisions 1399 1724 1686 1853




Paid-up capital 1642 1646 1646 1646






Pre-tax profit 9868 8288 9700 12121

Depreciation 1641 2754 2854 3035


Total tax paid -2216 -3101 -2560 -2863





Free cash flow 1171 11115 2958 7071






Net chg in cash -727 3308 827 4941

Valuation Ratios


Per Share data

EPS (INR) 460 385 438 555

Growth 323 (163) 138 266


FDEPS (INR) 460 385 438 555

CEPS (INR) 560 553 612 740

CFPS (INR) 387 1019 457 584

DPS (INR) 330 130 130 130









Payable days 131 141 143 143


Liquidity ratios





Net debtEquity () (77) (186) (183) (267)

Valuation

PER (x) 197 235 201 159

PEG (x) - y-o-y growth 06 (14) 15 06


Yield () 36 14 14 14


EVEBITDA (x) 137 134 116 94

EVEBIT (x) 162 181 153 119





N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No























N (TP 1420)

N (TP 1600) N (TP 1620)

N (TP 1640) N (TP 1700)

N (TP 1700)

N (TP 1760) N (TP 1800)

N (TP 1400) N (TP 1510)

B (TP 1890)

B (TP 1580)

B (TP 1910)

0

500

1000

1500

2000

2500


S (TP 380) S (TP 380)

N (TP 550)

N (TP 800)

N (TP 910) N (TP 1020) N (TP 1070)

N (TP 1020)

N (TP 900)

N (TP 930)

N (TP 700) B (TP 910)

B (TP 990) B (TP 890) B (TP 900)

200

400

600

800

1000

1200

1400





























No


No



No


No














































No


No



No


No



















INSTITUTIONAL EQUITY RESEARCH IT Services

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Transcript of INSTITUTIONAL EQUITY RESEARCH IT Services