Zensar Technologies: Setting the stage right

12 Annual Global Investor Conference

BSE Sensex

29,045

S&P CNX

8,953

Zensar Technologies

TP: INR1,300 (+29%)

Buy

Company update | Sector: Technology

CMP: INR1,005

Setting the stage right…

Stock Info

Bloomberg

Equity Shares (m)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

M.Cap. (INR b)

M.Cap. (USD b)

Avg Val, INRm

Free float (%)

Financial Snapshot (INR b)

Y/E Dec

2016

2017E

2018E

…With focused execution in Digital, Cloud and IMS

ZENT IN

44.6

1136/755

-11/0/14

45.7

0.7

71.0

52.1



37.2

6.2

4.4

98.0

27.3

448.0

23.9

29.5

20.8

10.3

2.2

6.0

2.0

Net Sales

EBITDA

PAT

EPS (INR)

Gr. (%)

BV / Sh (INR)

ROE (%)

ROCE (%)

Payout (%)

Valuations

P /E (x)

P / BV (x)

EV/EBITDA

Div. Yield (%)

29.6

4.3

3.1

68.2

17.0

314.4

24.0

28.5

17.6

14.8

3.2

10.2

1.2

32.2

4.8

3.5

77.0

12.3

373.8

22.3

27.1

21.3

13.1

2.7

8.3

1.6

ZENT has been taking several transformation measures post the recent investor and

leadership change. The key ingredients of its strategy are: [1] Focus on Digital, [2]

Attention towards 65 key accounts, and [3] Rejigging presence in Infrastructure

Management (IM) towards Services and Cloud.

While the first two are revenue drivers, the third leg of its strategy is a driver of

margins. Progress in these areas has been substantial, but simultaneous pruning of

low-yield accounts and trimming of the Product business is likely to limit revenue

growth at 5% in FY17.

The churn in the portfolio lays a better foundation for growth beyond FY17, driving

our estimate of 12% revenue growth in FY18. This should be seconded by margin

expansion from scaling up of newer areas and reconstitution of IM portfolio.

Favorable Digital skew…:

Digital constitutes 27% of ZENT’s revenue, amongst the

highest in the industry, facilitated by acquisition of Professional Access (PA). All

segments in Digital grew in the range of 21-37% YoY in FY16, and will continue with

similarly significant contribution to overall growth. PA is the third largest

implementer of Oracle Commerce globally. Its success with large retailers provides

ZENT with marquee clients that can be mined extensively.

…limiting pressure on Legacy:

On the 77% revenue from Application Services,

strong Digital presence and high proportion of Maintenance revenue have capped

the risk on portfolio from cloud shift of on-site implementation. Less than 20% of

the portfolio is likely to be at risk from cloud migration and smaller deal sizes. Also,

ZENT’s bet on the Oracle Cloud ecosystem has been paying off – Oracle’s strides in

SaaS and PaaS are reflected in its 65% YoY growth in these areas.

IM restructuring, a key margin lever:

The management’s three-pronged strategy for

the IM business is likely to lead to higher revenue from Services (60% v/s 40%

earlier), higher profitability in MVS and reduction of the Product portfolio (10% v/s

30% earlier). This will aid expansion of margins in the IM business from 5% in FY16

to ~10% in FY17 (~115bp improvement in overall EBITDA), providing headroom for

reinvestments in focus areas and also for booking some gains in the P&L.

Continued strategy execution offers re-rating potential:

We expect 5% revenue

growth in FY17 because of pruning of non-core areas. That said, execution progress

in focus areas lends confidence on gradual growth improvement (12% estimate for

FY18). Despite reinvestments, portfolio reconstitution and revenue growth revival

will potentially aid margin expansion of ~200bp over the next two years. Given

ZENT’s improved positioning and our expectation of consequent improvement in

financials, we see potential for growth acceleration and stock re-rating. Maintain

Buy,

with a price target of INR1,300, which discounts forward earnings by 13x.

Shareholding pattern (%)

As on

Promoter

Public

Others

Relative to Index

Jun-16 Mar-16 Dec-15

47.94

52.06

47.84

52.16

47.94

52.06

Sagar Lele

(Sagar.Lele@MotilalOswal.com); +91 22 6129 1531

Ashish Chopra

(Ashish.Chopra@MotilalOswal.com); +91 22 6129 1530

September 2016

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Zensar Technologies

12 Annual Global Investor Conference

Higher Digital, lower Legacy and revamped Infrastructure Management >>

WIP in FY17 and reasons for outperformance in FY18



ZENT has been going through a portfolio reconstitution since the new investor

and new leadership got on board. While these corrective measures are likely to

be implemented through FY17, the portfolio is likely to be in much better shape

in FY18, enabling industry-leading growth.

The key drivers of this outperformance are going to be: [1] 30% of total revenue

from Digital, [2] Lower exposure to Legacy because of higher Digital,

Maintenance and Cloud revenue (<20% of total revenue), and [3] Reconstitution

of Infrastructure Management (IM) revenue to Services and Cloud (20% of total

revenue).

While Digital has been growing at ~30% YoY, and IMS and Cloud have been

gaining scale, there is a simultaneous pruning of low-yield accounts and

Products business in IM. This has been leading to lower growth in FY17.

However, with this exercise far into implementation by the end of FY17, the

base would be set right for 12% YoY growth in FY18.

Exhibit 1: Portfolio reconstitution to aid growth FY18 onwards

Organic revenue (USDm)

Growth (YoY, %)

12.0

4.9

4.2

(1.7)

(0.7)

399

FY15

427

FY16

4.9

389

FY13

383

FY14

475

FY17E

532

FY18E

Source: MOSL, Company

This would naturally lead to better margins, given better profitability in Digital and

pruning of lower profitability MVS and Products businesses in Infrastructure

Management, and termination of low-yield accounts.

We expect these measures to result in headroom for the company to reinvest into

the business to augment capabilities in newer areas, and sales and marketing

functions. However, once the newer areas gain critical mass, margins are expected

to follow suit.

Take for instance, the IM business. Restructuring is likely to result in flat revenue in

FY17. However, the portfolio is likely to undergo a change to

Services:Maintenance:Products::60:30:10 in FY17 from 40:30:30 in FY16. This is

likely to improve profitability in the IM business from ~5% in FY16 to ~10% in FY17,

and further improvement is likely in FY18, as the MVS business gets on track.

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Exhibit 2: Restructuring of IM business – a key margin driver

EBITDA margin (%)

14.9

14.4

13.9

16.5

EBITDA margin change (YoY, bp)

160

14.7

13.7

(81)

FY13

FY14

FY15

FY16

FY17E

FY18E

FY13

FY14

FY15

FY16

FY17E

FY18E

Source: MOSL, Company

Vector #1: Well-placed in Digital

ZENT has been shifting its business model from traditional IT services to Digital by

realigning its focus on Digital transformation/enterprise. Traction in Digital has been

evidently moving the needle in its overall performance. Contribution of Digital as a

% of revenue has risen from 5% in FY14 to 27% in FY16, and the company expects it

to reach 30% in FY17. The contribution of Digital to total revenue is among the

highest in the industry, and could help ZENT to record industry-leading growth.

Exhibit 3: Portfolio favorably skewed towards Digital

Digital revenue (USDm)

Digital (% of total revenue)

36%

27%

13%

2,154

TCS

17%

30%

15%

12%

KPIT

1,252

WPRO

256

MTCL

122

ZENT

104

PSYS

NITEC

Source: MOSL, Company

In Digital, ZENT has carved out a niche through its focus on eCommerce enablement.

The presence in this area was brought about by its acquisition of Professional Access

(PA) in August 2014. This contributes to half of ZENT’s Digital revenue. The

remainder is contributed by Other Digital Services, and the cross-over between

Legacy and Digital.

Betting on success of Oracle Commerce…

Oracle Commerce is an eCommerce platform for online retailers, which spans across

multiple channels, and facilitates purchasing transactions. PA is one of the largest

Oracle ATG and Endeca partners in the world (implementation and maintenance). It

is an Oracle Platinum partner with presence in the US, the UK, Latin America, Middle

East and Africa. The company works with several large and mid-sized retailers in

these geographies to build and implement their eCommerce strategies.

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Exhibit 4: Revenue break-up of PA (by service line and vertical; % of revenue)

Others, 0.3

BFS and Others, 3.9

public

sector, 5.2

Maintenanc

support,

46.1

Implement

ation, 53.7

Retail and

telecom,

90.8

Source: MOSL, Company

Oracle Commerce combines ATG and Endeca – two companies Oracle acquired.

ATG's solutions enable enterprises to provide a cohesive online customer

experience with sophisticated merchandising, marketing, content personalization,

automated recommendations, and live-help services. Endeca was recognized as a

pioneer of faceted search, particularly in the context of electronic commerce and

online libraries.

Oracle Commerce has a dominant market share among eCommerce platforms for

online retailers. The other dominant players in the market are IBM WebSphere, SAP

Hybris and Magento. Other players in the market with a lower share include Digital

River, Elastic Path, Apttus and CloudCraze.

Oracle Commerce has seen particularly high success in larger retailers. Some of the

largest retailers using the Oracle Commerce platform are Neiman Marcus,

Walgreens, Macy’s, Express, CVS, Kohl’s, Blue Nile, American Eagle, OfficeMax and

Chico’s.

Exhibit 5: Oracle Commerce rated highly by Forrester and Gartner

Source: Forrester, Gartner

September 2016

Zensar Technologies

12 Annual Global Investor Conference

…In the fast-growing commerce suite technology market

The market for commerce suite technology is mature, yet it is set to almost double

from USD1.2b in 2014 to USD2.1b in the US alone by 2019. Although adoption of

commerce technology in B2C verticals is already largely saturated, much of the

anticipated growth over the next five years will be driven by re-platforming

activities, as established online retailers look to fortify the scalability of their

technology and branded manufacturers increase their focus on direct-to-consumer

digital channels.

Exhibit 6: 12% CAGR expected in the US commerce platform market

Commerce suite technology market in the US (USDb)

2.1

1.2

2014

2019

Source: Forrester

Other Digital solutions are now up and running

While eCommerce implementation comprises 50% of ZENT’s Digital revenue, the

balance comes from other Digital and cross-over services. The company’s

perspective on Digital is divided into two parts:

Enterprise Digital

– (1) Digital agility (front-end), (2) cross-over of Digital and

IT/business processes (cloud and hybrid infra/IT), and (3) stability of the core

systems (ADM, back-end systems with APIs built in).

CMO-led Digital solutions

– ZENT launched CMO-centric services on April 1, 2016. It

sees a massive opportunity in tapping CMO budgets, with solutions around

marketing analytics, digital analytics, content and creative solutions.

The company has seen strong growth across services in Digital, and is poised for

further acceleration in FY17, given the progress it has made in building and

launching new solutions over the current year. Given the 27% contribution of Digital

to overall revenue, organic growth has the potential to accelerate further.

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Exhibit 7: Strong growth across the Digital solution stack

FY16 Growth (YoY, %)

Company

Big data &

analytics

Cloud

Design

Digital

B2C

B2B

experience marketing Commerce Commerce

services

Cyber

security

Source: MOSL, Company

Vector #2: Decreasing threat of cannibalization

ZENT broadly classifies its revenue between Application Services and Infrastructure

Management, not giving a further break-down between Application Development,

Application Management, Package Implementation, Testing and BPO. This has been

leading to a seemingly high perception of risk from the movement of on-premise

applications to cloud, and from the foray of Digital in traditional application

development. However, a further dissection (based on disclosure and guesstimates)

gives more clarity on portfolio risks.

Exhibit 8: Revenue composition by services (% of total revenue)

IMS - Services,

16%

IMS -

Maintenance, 8%

Application

Management

Services, 76%

Source: MOSL, Company

In Application Services (77% of revenue), 33% revenue is derived from the Oracle

ecosystem, of which 37% is Digital. This leaves 63% of the Oracle ecosystem (21% of

total revenue) exposed to Legacy.

In the rest of the Application Services business (44% of revenue), Digital forms ~15%

of total revenue, and assuming Testing and BPO together form ~8%, it leaves an

additional 21% of total revenue exposed to Legacy.

However, ZENT has a strong Maintenance presence (nearly half of the 42%), and has

made significant in-roads in Cloud implementation in its Oracle practice. Effectively,

this leaves less than 20% of total revenue exposed to on-premise implementation.

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Exhibit 9: Exposure to on-premise implementation is <20% of total revenue (1QFY17)

Application Services

Oracle

Commerce

Legacy

Digital

Legacy

Testing

BPO

Infrastructure Management

Maintenance

Services

Total

Revenue

(USD m)

114

Composition (% of

revenue)

77.2%

33.0%

12.3%

20.7%

14.9%

20.5%

4.4%

22.8%

8.1%

14.7%

100.0%

Source: MOSL

Moreover, ZENT has been betting big on the Oracle ecosystem (33% of total

revenue), and remains positive on the likelihood of Oracle’s success in the Cloud.

Revenue from Oracle’s SaaS and PaaS reached USD690m in 4QFY16, up 66% YoY in

USD terms and 68% CC. Year over year growth rates have steadily increased through

FY16, and Oracle expects the momentum to continue in 1QFY17, wherein its expects

SaaS and PaaS revenue to grow 75-80% YoY.

In FY16, while total revenue for Oracle was down 2% CC to USD37b, SaaS and PaaS

revenue was at USD2.2b, up 52% YoY CC. The company’s Executive Chairman and

CTO has mentioned Oracle of having a ‘fighting chance’ to be the first SaaS and PaaS

company to grow to USD10b in revenue.

The proportion of cloud revenue in ZENT’s Oracle piece would see a rapid expansion

of base, and contribute higher to incremental growth as this shift becomes more

rapid and profound at Oracle.

Exhibit 10: Oracle’s Cloud revenue growth increasing with scale

SaaS and PaaS (USDm)

Growth SaaS and PaaS (YoY, %)

56.7

33.8

34.1

65.9

1QFY16

2QFY16

3QFY16

4QFY16

Source: MOSL, Company

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Vector #3: Reconstitution of IMS offerings

ZENT has been de-focusing from the products business in Infrastructure

Management. The company intends to include the products bit only where it is

integral to the services portfolio of the organization. Revenue from Products has

gradually inched lower to 6% of total revenue in FY16 from 11% in FY13.

Moreover, the company’s focus is on IMS & Cloud, which would mean the Services

business in Infrastructure Management would grow, Maintenance would remain

stagnant and Products would decline.

Exhibit 11: Services – the focus area in IM

Services

MVS

Products

10%

30%

40%

IM composition at the end of FY16

60%

IM composition at the end of FY17E

Source: MOSL, Company

ZENT’s infrastructure business comprises of (1) MVS and (2) IMS & Cloud, which are

run separately as focused businesses. The company intends to grow its IMS & Cloud

business to 15% of total revenue over the next 12 months. The key focus areas in

this business are:



Hybrid IT:

Automated and orchestrated provisioning and management of public,

private and on-premise infrastructure – ZENT’s focus is on an integrated

platform across technologies and hosting models that will enable it to target the

G-1000.

Next-gen end-user experience:

Focusing on predictive analytics and mobility –

ZENT combined Aternity, Nano Heal, Lakeside and Service Now to build a

predictive end-user management solution, which spans over user interface and

backend systems.

Network security:

Design, implement and manage comprehensive IT security

frameworks.

Unified IT management:

Driven by automation, orchestration and analytics.

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Exhibit 12: IM portfolio growing in the right areas (USD revenue growth, YoY, %)

Maintenance

-2%

-8%

-16%

-13%

-15%

2QFY16

-17%

3QFY16

Services

1QFY16

-21%

4QFY16

1QFY17

Source: MOSL, Company

Maintenance revenue for ZENT mainly stems from the acquisition of Akibia in

November 2010. The proposition was for ZENT to provide total infrastructure

outsourcing and for it to become the single point of contact for all infrastructure

support. The profitability of this business has been hampered because of scale.

The fixed costs in this business are high because of limited manpower requirement,

fixing of the supply chain, and the fact that warehouses are already set up. Any

uptick in revenue would thus result in disproportionate increase in profitability. The

company has recently hired new leadership for this segment, with a head who has

prior experience in turning around a similar business.

All these measures (focus on scaling up Services + reduction of Products +

profitability resurrection in Maintenance) are likely to result in flat revenue in FY17.

However, margins have the potential to improve from ~5% in FY16 to ~10% in FY17,

giving ample room for reinvestments in other parts of the business without hurting

company-level margins.

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Valuation and view



Execution for next leg of growth is in progress:

Post the leadership change at

ZENT, execution has become fast-tracked, with several steps taken toward

realigning the organization with its growth engines. In line with this, several

services/solutions have been launched, sales function has been augmented and

there is a renewed focus on client mining and large deals. These initiatives are

currently in the investment mode and likely to start adding to growth along with

Digital and IMS.

Riding the Digital wave:

Digital accounts for 27% of ZENT's revenue and has

been seeing growth of 21-37% YoY. Half of Digital is constituted by eCommerce

implementation, where capabilities have increased post ZENT's acquisition of

Professional Access, which in FY16 grew by 25% YoY. The rest of Digital revenue

comes from other Digital and cross-over services. Moreover, with increased

emphasis on Enterprise Digital and CMO-led solutions, Digital will only get a

further boost from current levels.

Re-constitution to continue for the better:

ZENT had earlier laid focus on

achieving the Diamond partnership with Oracle. However, elevation from

Platinum partnership is a function of the work around Oracle's installed base,

and not cloud services. Oracle has a managed cloud partner program, on which

ZENT has turned its attention as this better aligns with changing market

dynamics, Oracle's strategy and ZENT's focus areas. Moreover, the realignment

of focus in infrastructure management toward IMS & Cloud too marks a step in

this direction.

Aggressive consolidation of non-core business:

Over the last two years, ZENT

has cut out non-core geographies, verticals and service lines. Since the

leadership change, the company has renewed focus on strategic accounts, and is

in the process of cutting its long tail of low-yield and non-scalable accounts.

Over the last two quarters itself, the number of active customers has come

down to 183 from 217.

Expect rebound in revenue growth:

On account of ongoing restructuring, we

expect revenue growth of 5% in FY17. However, with the implementation of

growth engines well in progress, we expect a revival in revenue growth to 12%

in FY18.

Margin comfort for FY17-18E:

Revenue growth pick-up, profitability

improvement in the IMS business, and current investments should lead to a

210bp EBITDA margin expansion over FY16-18. EBIT margins in the IMS business

(18% of revenue) can improve from 6% in FY16 to 14% in FY18, led by higher

revenues from 'IMS and Cloud' and the restructuring in the MVS business. This

alone has the potential to improve overall margins by 150bp. We expect an EPS

CAGR of 20% over FY16-18.

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Key triggers



Pick-up in Financial Services vertical and in the US

Margin improvement despite investments

Significant increase in deal wins and deal pipeline

Key risk factors



Problems in top accounts

Risk from slower spend on ERP

Hindrances in structural recovery of margins

Exhibit 14: 1-year forward PB band

Avg(x)

14.6

11.8

4.0

3.0

2.0

4.9

1.0

0.0

0.4

PB (x)

Median(x)

Exhibit 13: 1-year forward PE band

6.1

1.1

PE (x)

Median(x)

Peak(x)

Min(x)

Peak(x)

Min(x)

Avg(x)

3.1

2.5

1.5

1.3

Exhibit 15: Comparative valuation

Mcap

USD b

Mphasis

1.7

Mindtree

0.6

KPIT Tech

0.4

Cyient

0.8

Hexaware

0.9

NIIT Tech

0.4

Persistent Sys.

0.7

Zensar

0.7

Company

Rating

Neutral

Buy

Neutral

Buy

Upside

EPS (INR)

(INR)

(%)

FY16 FY17E FY18E

570

4.8

34.5 38.1 42.4

550

6.8

35.9 29.9 39.6

160

22.1 14.1 13.7 16.0

550

15.5 30.7 34.2 41.6

230

15.0 12.9 13.6 16.1

530

34.5 45.8 41.3 53.4

710

16.0 37.2 37.7 47.4

1,300

30.0 68.2 77.0 98.0

FY16

15.8

14.4

9.3

15.5

8.6

16.5

14.7

P/E (x)

FY17E

14.3

17.2

9.5

13.9

14.7

9.5

16.2

13.0

FY18E

12.8

13.0

8.2

11.4

12.4

7.4

12.9

10.2

FY16

12.3

27.4

21.0

16.5

28.9

19.0

19.5

24.0

RoE (%)

FY17E

12.8

19.9

18.0

16.2

26.7

15.2

17.3

22.3

FY18E

14.0

23.1

17.5

17.4

26.9

17.4

20.0

23.9

FY16-18E CAGR (%)

USD rev.

EPS

6.1 11.0

13.1 5.0

4.3 6.6

12.9 16.4

11.2 11.7

7.8 8.0

19.5 12.9

8.4 19.8

Source: Company, MOSL

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Story in charts

Exhibit 16: Contribution of Digital to total revenue among

the highest in the industry

Digital revenue (USDm)

36%

27%

13%

2,154

TCS

17%

30%

15%

12%

KPIT

Source: MOSL, Company

Digital (% of total revenue)

Exhibit 17: 21-37% YoY growth in all areas of Digital in FY16

FY16 Growth (YoY, %)

1,252

WPRO

256

MTCL

122

ZENT

104

PSYS

NITEC

Source: MOSL, Company

Exhibit 18: Expect organic revenue growth to pick up…

Organic revenue (USDm)

Growth (YoY, %)

12.0

Exhibit 19: …Coupled with margin expansion…

EBITDA margin (%)

14.9

14.4

13.9

16.5

4.9

4.2

(1.7)

(0.7)

399

FY15

427

FY16

4.9

13.7

14.7

389

FY13

383

FY14

475

FY17E

532

FY18E

FY13

FY14

FY15

FY16

FY17E

FY18E

Source: MOSL, Company

Exhibit 20: …Assisted by portfolio reconstitution…

Maintenance

-2%

-8%

-16%

-13%

-15%

2QFY16

-17%

3QFY16

Services

Exhibit 21: …Compounding to earnings CAGR of 20%

Net profit (INRb)

36.1

27.3

17.0

10.0

1.7

2.4

FY14

11.4

2.6

FY15

3.1

FY16

12.3

3.5

FY17E

4.4

FY18E

Growth (YoY, %)

-21%

4QFY16

1QFY17

Source: MOSL, Company

1QFY16

FY13

Source: MOSL, Company

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Operating metrics

Exhibit 22: Operating metrics

1QFY15

Geographic Mix (%)

USA

Europe

ROW

Vertical Mix (%)

Manufacturing

Retail and consumer services

Financial services

Emerging

Service Mix (%)

Application Management Services

Infrastructure Management Services

Maintenance

Services

Project Type (%)

Fixed price

Time & material

Revenue by delivery (%)

Onsite

Offshore

Client metrics

Client concentration (%)

Top 5

Top 6-10

Top 10

Top 11-20

Top 20

Client brackets

1 Million dollar +

5 Million dollar +

10 Million dollar +

20 Million dollar +

Other metrics

Repeat business (%)

Number of active clients

New clients added in the period

Employee metrics

Total headcount

Gross employees added during the period

Net employees added during the period

Utilization

Attrition

2QFY15

3QFY15

4QFY15

1QFY16

2QFY16

3QFY16

4QFY16

1QFY17

178

183

182

204

196

217

211

194

183

6,894

695

103

7,846

742

952

8,037

709

191

8,174

573

137

7,895

1,531

(279)

8,050

844

155

8,192

730

142

8,256

588

8,238

662

(18)

Source: Company, MOSL

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Financials and Valuations

Income Statement

Y/E March

Sales

Change (%)

Cost of Services

SG&A Expenses

EBITDA

% of Net Sales

Depreciation

Interest

Other Income

Forex

PBT

Tax

Rate (%)

Minority Interest

PAT

Net Income

Change (%)

Balance Sheet

Y/E March

Share Capital

Reserves

Net Worth

Minority Interest

Loan

Capital Employed

Applications

Gross Block

Less : Depreciation

Net Block

CWIP

Other LT Assets

Curr. Assets

Current Investments

Inventories

Debtors

Cash & Bank Balance

Loans & Advances

Other Current Assets

Current Liab. & Prov

Current Liabilities

Other liabilites

Provisions

Net Current Assets

Application of Funds

E: MOSL Estimates

FY11

11,383

19.5

7,906

1,948

1,529

13.4

294

305

1,502

184

12.3

1,318

3.3

FY12

17,825

56.6

12,337

3,224

2,263

12.7

333

527

2,364

777

32.9

1,587

20.4

FY13

21,145

18.6

14,809

3,444

2,892

13.7

332

100

332

-187

2,606

861

33.0

1,745

10.0

FY14

23,156

9.5

15,957

3,803

3,396

14.7

383

109

290

205

3,399

1,023

30.1

2,375

36.1

FY15

26,277

13.5

18,329

4,307

3,641

13.9

415

112

364

181

3,659

1,013

27.7

-1

2,646

11.4

FY16

29,643

12.8

20,366

5,015

4,262

14.4

454

106

181

407

4,289

1,169

27.3

-26

3,094

17.0

FY17E

32,173

8.5

22,440

4,931

4,802

14.9

467

133

337

358

4,896

1,398

28.6

-24

3,473

12.3

(INR Million)

FY18E

37,242

15.8

25,314

5,773

6,155

16.5

559

129

471

236

6,175

1,729

28.0

-24

4,422

27.3

(INR Million)

FY18E

446

19,767

20,213

1,378

21,630

9,739

-4,208

5,531

721

21,758

1,216

1,326

6,819

8,052

1,346

2,998

6,388

2,555

3,407

426

15,370

21,630

FY11

433

4,027

4,460

2,392

6,852

5,480

-2,007

3,473

744

5,558

246

836

1,876

1,100

916

584

2,973

997

1,682

294

2,585

6,852

FY12

434

5,325

5,759

2,755

8,514

6,045

-2,269

3,776

583

7,869

468

950

2,911

1,745

1,142

654

3,741

1,337

1,884

521

4,128

8,514

FY13

436

6,853

7,289

2,353

9,642

6,341

-2,372

3,969

545

8,035

417

1,049

3,354

1,420

856

937

2,931

1,059

1,556

315

5,104

9,642

FY14

438

9,017

9,455

2,032

11,498

6,503

-2,287

4,215

608

10,015

1,478

1,288

3,581

1,458

817

1,392

3,361

1,507

1,385

468

6,654

11,498

FY15

443

11,127

11,570

1,396

12,977

8,201

-2,728

5,474

617

11,240

931

1,226

4,539

1,960

880

1,704

4,368

1,305

2,426

637

6,872

12,977

FY16

446

13,812

14,258

1,878

16,175

8,889

-3,182

5,706

517

13,989

1,016

1,259

5,427

2,823

1,072

2,392

4,054

1,643

2,118

293

9,935

16,175

FY17E

446

16,420

16,866

1,628

18,533

9,289

-3,649

5,639

619

17,887

1,116

1,234

5,891

5,888

1,163

2,596

5,624

2,250

3,000

375

12,263

18,533

September 2016

Zensar Technologies

12 Annual Global Investor Conference

Financials and Valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

Book Value

DPS

Payout %

Valuation (x)

P/E

Cash P/E

EV/EBITDA

EV/Sales

Price/Book Value

Dividend Yield (%)

Profitability Ratios (%)

RoE

RoCE

RoIC

Turnover Ratios

Debtors (Days)

Fixed Asset Turnover (x)

Cash Flow Statement

Y/E March

CF from Operations

Cash for Working Capital

Net Operating CF

Net Purchase of FA

Free Cash Flow

Net Purchase of Invest.

Net Cash from Invest.

Proc. from equity issues

Proceeds from LTB/STB

Dividend Payments

Cash Flow from Fin.

Exchange difference

Net Cash Flow

Opening Cash Bal.

Add: Net Cash

Closing Cash Bal.

E: MOSL Estimates

FY11

30.5

37.3

103.3

3.5

11.5

FY12

36.6

44.2

132.7

7.0

19.1

FY13

40.2

47.8

167.9

8.0

20.0

FY14

54.7

63.6

217.9

10.1

18.4

FY15

61.0

70.5

266.6

11.2

18.4

FY16

68.2

78.2

314.4

12.0

17.6

(INR Million)

FY17E

FY18E

77.0

87.3

373.8

16.4

21.3

98.0

110.4

448.0

20.4

20.8

18.4

14.9

12.5

1.8

4.6

1.0

16.5

15.1

11.5

1.6

3.8

1.1

14.8

11.9

10.2

1.5

3.2

1.2

13.1

6.5

8.3

1.2

2.7

1.6

10.3

4.9

6.0

1.0

2.2

2.0

34.0

23.4

39.7

31.1

26.2

22.1

26.7

30.3

24.4

28.4

30.8

25.8

25.2

28.6

25.1

24.0

28.5

24.7

22.3

27.1

26.0

23.9

29.5

33.8

3.3

4.7

5.3

5.5

4.8

5.2

5.7

6.7

(INR Million)

FY18E

5,109

-943

4,166

-446

3,720

-102

-548

-379

-1,075

-1,454

2,165

5,888

2,165

8,052

FY11

1,014

392

1,406

-272

1,134

-3,129

-3,401

1,886

-138

1,759

-200

1,299

-200

1,100

FY12

2,281

-546

1,735

-263

1,472

-190

-452

-320

-329

-640

649

1,096

649

1,745

FY13

2,212

-1,152

1,060

-334

726

-247

-776

-379

-1,139

-318

1,739

-318

1,420

FY14

2,720

-625

2,094

-323

1,771

-961

-1,284

-422

-411

-774

1,413

1,458

FY15

2,823

382

3,206

-372

2,834

-1,448

-1,819

-395

-542

-874

512

1,448

512

1,960

FY16

3,805

-1,218

2,587

-423

2,164

-422

-375

-969

-1,302

863

1,960

863

2,823

FY17E

4,074

737

4,811

-396

4,415

-102

-498

-383

-865

-1,249

3,065

2,823

3,065

5,888

September 2016

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