MINDTREE LTD Q4 FY14 Detail · PDF file MINDTREE LTD S&P BSE SENSEX SYNOPSIS MindTree Ltd...

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  • CMP 1430.00

    Target Price 1585.00

    ISIN: INE018I01017

    APRIL 17 th

    2014

    MINDTREE LIMITED Result Update: Q4 FY14

    BUYBUYBUYBUY

    Index Details

    Stock Data

    Sector IT

    BSE Code 532819

    Face Value 10.00

    52wk. High / Low (Rs.) 1724.95/782.70

    Volume (2wk. Avg.) 21000

    Market Cap (Rs. in mn.) 59488.00

    Annual Estimated Results (A*: Actual / E*: Estimated)

    YEARS FY14A FY15E FY16E

    Net Sales 30316.00 36379.20 41836.08

    EBITDA 6600.00 7488.74 8359.45

    Net Profit 4512.00 5113.35 5756.54

    EPS 108.20 122.92 138.38

    P/E 13.22 11.63 10.33

    Shareholding Pattern (%)

    1 Year Comparative Graph

    MINDTREE LTD S&P BSE SENSEX

    SYNOPSIS

    MindTree Ltd is a global information technology

    solutions company with revenues of over USD 500

    million.

    FY14 has been a momentous year for Mindtree. It

    crossed half a billion dollars in revenues, USD 100

    million in operating profits and INR 100 of EPS.

    In Q4 FY14, the company’s net profit jumps to Rs.

    984.00 mn against Rs. 789.00 mn in Q4 FY14, an

    increase of 24.71%.

    Revenue for the quarter rose by 34.50% to Rs. 8237.00

    mn from Rs. 6124.00 mn, when compared with the

    prior year period.

    EBIDTA is Rs. 1474.00 mn as against Rs. 1164.00 mn in

    Q4 FY13, which is shown a growth of 26.63%.

    As on March 31st, 2014, Company has 207 active

    customers $5 million clients grow to 24; $1 million

    clients grow to 73.

    The Company has recommended a Final Dividend of

    50% for the year ended March 31, 2014 and a Special

    Dividend of 50% for completion of 15 years in

    business.

    The Company has also recommended an issue of bonus

    shares in the ratio of 1:1.

    Mindtree has announced a strategic alliance with

    Pegasystems Inc., to develop and optimize custom BPM

    solutions.

    In FY14, the Company has no short term debts and

    long term debts reduced by 16% to Rs. 27 mn from Rs.

    32 mn in FY13.

    Net Sales and PAT of the company are expected to

    grow at a CAGR of 21% and 19% over 2013 to 2016E

    respectively.

    PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND

    Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

    Mind Tree Ltd 1430.00 59488.00 108.20 13.22 3.63 250.00

    Mphasis Ltd 418.00 88270.80 25.20 16.67 2.37 170.00

    Oracle Financial Services Software Ltd 3160.00 263960.10 134.91 23.25 3.62 0.00

    HCL Technologies Ltd 1428.00 995860.30 69.61 20.45 9.73 600.00

  • Recommendation & Analysis - ‘BUY’

    FY14 has been a momentous year for Mindtree. It crossed half a billion dollars in revenues, USD 100 million in

    operating profits and INR 100 of EPS. For Q4 FY14, MindTree Ltd reported revenue of Rs. 8237.00 mn from Rs.

    6124.00 mn in the prior year period, registered a growth of 34.5% y-o-y and decline of 4.2% q-o-q. The

    company’s net profit jumps to Rs. 984.00 mn against Rs. 789.00 mn in Q4 FY14 (growth of 11% q-o-q / 24.71%

    y-o-y). Profit before interest, depreciation and tax is Rs. 1474.00 mn as against Rs. 1164.00 mn in the

    corresponding period of the previous year, which is shown a growth of 26.63%.

    As on March 31st, 2014, Company has 207 active customers $5 million clients grow to 24; $1 million clients grow

    to 73. Amongst the key businesses, the growth was well spread across IT services and PE Services (now Hi-Tech

    vertical). BFSI increased by 44% y-o-y. Travel and Transportation increased by 33% y-o-y. Infrastructure

    Management & Tech Support has posted a growth of 24% y-o-y. In FY14, the Company has no short term debts

    and long term debts reduced by 16% to Rs. 27 mn from Rs. 32 mn in FY13.

    MindTree has delivered broad-based growth in FY14, higher than in FY13. We expect that the company surplus

    scenario is likely to continue for the next years, will keep its growth story in the coming quarters also. Over

    FY2012-15E, we expect the company to post a CAGR of 21% and 19% in its top-line and bottom-line respectively.

    Hence, we recommend ‘BUY’ for ‘MindTree Ltd’ with a target price of Rs. 1585.00 for medium to long term

    investment.

    QUARTERLY HIGHLIGHTS (STANDALONE)

    Results updates- Q4 FY14,

    MindTree Ltd is a global information technology

    solutions company to help business & societies

    Flourish, reported its financial results for the

    quarter ended 31st Mar, 2014.

    Months Mar-14 Mar-13 % Change

    Net Sales 8237.00 6124.00 34.50

    PAT 984.00 789.00 24.71

    EPS 23.60 19.01 24.12

    EBITDA 1474.00 1164.00 26.63

    The company’s net profit jumps to Rs. 984.00 million against Rs. 789.00 million in the corresponding quarter

    ending of previous year, an increase of 24.71%. Revenue for the quarter rose by 34.50% to Rs. 8237.00 million

    from Rs. 6124.00 million, when compared with the prior year period. Reported earnings per share of the

    company stood at Rs. 23.60 a share during the quarter, registering 24.12% increase over previous year period.

    Profit before interest, depreciation and tax is Rs. 1474.00 millions as against Rs. 1164.00 millions in the

    corresponding period of the previous year.

  • Break up of Expenditure

    Break up of Expenditure

    Rs. Millions

    Q4 FY14 Q4 FY13

    Employee Benefit Expenses 4869.00 3745.00

    Depreciation 223.00 155.00

    Other Expenses 1596.00 1216.00

    Segment Revenue

    Latest Updates

    • Mindtree has announced a strategic alliance with Pegasystems Inc. the leader in Business Process

    Management (BPM), to develop and optimize custom BPM solutions. The solutions will be based on

    Pegasystems’ Build for Change® technology platform.

    • Mindtree now provides application support and evolutionary maintenance services to SITA, the world's

    leading specialist in air transport communications and IT solutions, for its new Strategic Finance System

    (SFS) platform.

  • Multi-year and multi-million dollar wins with leading global clients:

    • Leading global provider of share registry, pension administration, compliance reporting and analytics

    solutions. Mindtree will provide application maintenance, testing and management reporting services

    • Leading Telecommunications Company, which is an existing client. Mindtree is selected as its managed

    services partner for maintenance of multiple datacenters that hosts its telecom business applications

    • Leading global insurance company. Mindtree is chosen to provide application development & maintenance,

    IMS and testing services

    • Leading global provider of governance, risk and compliance management solutions. Mindtree will support its

    cloud based platform

    • Customers

    207 active clients as of March 31, 2014 and $5 million clients grow to 24; $1 million clients grow to 73

    • Employees

    � Mind tree Ltd has 12,926 employees as of March 31, 2014

    � Added 397 employees during the quarter on a gross basis

    � Trailing 12 months attrition is at 12.7%

    Awards

    • Mindtree was ranked #1 under the categories ‘Best Managed IT/Software/Technology Company in Asia’ and

    the ‘Best Managed Company in India’ for 2013 by Euromoney’s Annual Asia Company Ranking

    • Mindtree is in the top 3 ranking in India, on all categories related to Corporate Governance & Investor

    Relations by Asiamoney

    Issue of bonus shares:

    On the occasion of 15th anniversary and revenues crossing a significant milestone of half a billion dollars, the

    Company recommended an issue of bonus shares in the ratio of 1:1, i.e. one additional equity share for every

    existing equity share. This is subject to shareholders approval.

  • Dividend announcement:

    • MindTree Ltd has recommended third interim dividend of 50% (Rs. 5/- per equity share of par value Rs. 10/-

    each) for the fourth quarter ending March 31, 2014.

    • The Company has also recommended a Final Dividend of 50% (Rs. 5 per equity share of par value Rs. 10/-

    each) for the year ended March 31, 2014 and a Special Dividend of 50% (Rs. 5 per equity share of par value

    Rs. 10/- each) for completion of 15 years in business.

    Revenue by Geography (Q4 FY14)

    Revenue by Service Offering (Q4 FY14)

  • Revenue Mix (Q4 FY14)

    Client Contribution to Revenue (Q4 FY14)

    COMPANY PROFILE

    MindTree was incorporated in the year 1999 by a group of 10 industrial professionals who came from

    Cambridge Technology Partners, Lucent Technologies and Wipro and this team was led by Ashok Soota. It has

    formed successful business and technology alliances with big companies like Microsoft, Hewlett Packard, Oracle,

    Bluetooth SIG, Intel, IBM, SAP, Orange, Sun Microsystems and many more.

    MindTree is a global information technology solutions co