26 May 2017
4QFY17 Results Update | Sector: Technology
Mphasis
Neutral
BSE SENSEX
31,028
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
9,595
MPHL IN
Incrementally positive HP channel outlook
210
Digital Risk-led revenue miss:
MPHL reported a 0.9% QoQ decline (est. of
120.4 / 1.8
+1.1% QoQ) in revenue to USD222m. While the HP channel saw its third
622 / 425
consecutive quarter of stable performance and Direct Core revenue grew
6/-6/6
83
2.3% QoQ, performance was marred by ~10% QoQ decline in Digital.
39.6
Outlook of revenue growth in HP channel:
MPHL entered into a partnership
CMP: INR573
TP: INR600 (+5%)
Financials & Valuations (INR b)
2017 2018E
Y/E Mar
60.8
63.3
Net Sales
9.7
9.7
EBITDA
8.2
8.1
PAT
38.9
41.7
EPS (INR)
12.9
7.3
Gr. (%)
292.4
254.1
BV/Sh (INR)
13.2
14.0
RoE (%)
12.4
13.5
RoCE (%)
14.7
13.7
P/E (x)
2.0
2.3
P/BV (x)
2019E
70.3
11.1
8.7
45.0
7.9
271.2
15.7
15.5
12.7
2.1
Estimate change
TP change
Rating change
with DXC Technologies for application modernization, extending the
relationship with HP/DXC, driving the company’s outlook of revenue growth
in the segment in FY18. Also, the company announced in-roads into the
Blackstone portfolio of companies, winning its first deal in 4Q and another
three post that. Direct Core should continue growing above industry
average. However, overall revenue continues to be weighed upon by Digital
Risk and Direct Emerging (17% of revenue).
Margin stability:
In 4Q, EBIT margin shrunk 10bp to 14.6%, despite pressure
in Digital Risk. PAT at INR1.9b declined 5.4% QoQ. Hedge gains on the top
line and lower amortization costs drove 180bp FY17 margin expansion. Also,
current hedges provide visibility of higher gains in FY18 over FY17, assuming
INR/USD at present levels.
Valuation and view:
Direct International (ex. Digital Risk) has been growing
above industry, and drag on overall performance from HP has finally
stopped. However, volatility in Direct Emerging and Digital Risk has been
keeping overall revenue growth under check, and a weak exit implies FY18
too should be soft, despite better quarterly execution. We expect
revenue/earnings CAGR of 7.7/7.6% over FY17-19E. Our target price of
INR600 discounts FY19E EPS by 13x, factoring in incremental business in
DXC, potential in Blackstone companies and a likely strong payout.
Neutral.
FY17
Jun 16
224
-0.2
15,176
-2.6
28.1
11.8
2,463
16.2
15.3
711
27.5
2,166
6.0
14.0
10.3
22,284
-90
23.9
19.1
FY16
Dec 16
224
-0.3
15,361
1.3
27.8
12.3
2,396
15.6
14.7
617
28.5
2,044
-5.6
17.7
9.7
22,018
-266
24.0
20.6
Mar 17
222
-0.9
15,059
-0.7
28.7
12.8
2,384
15.8
14.6
485
27.5
1,934
-5.4
0.7
8.8
21,979
-39
926
-2.2
60,879
5.1
26.6
11.8
8,970
14.7
13.5
1,954
27.1
7,242
6.9
34.5
22,324
-11735
FY17E
894
-3.5
60,763
-0.2
28.2
12.2
9,688
15.9
15.0
2,385
27.8
8,187
13.0
38.5
21,979
-345
Est. Var. (% /
Mar 17
bp)
227.1
-2.4
1.1
-197bp
15,064
0.0
-0.6
-3bp
27.1
158bp
11.7
106bp
2,315
3.0
15.4
46bp
14.5
14bp
566
-14.3
27.5
1bp
1,973
-2.0
-3.5
2.7
10.2
21,529
2.1
-489.0
Quarterly Performance (Consolidated)
Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA
EBITDA Margin (%)
EBIT Margin (%)
Other i ncome
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Net Addi ti ons
HP Cha nnel rev. (%)
Fi xed Pri ce (%)
Jun 15
234
1.7
14,945
0.3
26.2
11.9
2,115
14.1
12.7
440
29.2
1,658
-6.7
-5.1
8.3
34,159
100
28.8
12.3
FY16
Sep 15 Dec 15
237
229
1.2
-3.4
15,575 15,167
6.3
7.5
26.9
25.6
11.9
11.3
2,345
2,166
15.1
14.3
13.9
13.2
492
456
26.4
27.7
1,900
1,736
14.6
-8.6
18.6
5.1
9.0
8.3
24,169 23,563
-9990
-606
26.5
24.2
14.0
19.2
Mar 16
225
-1.7
15,160
6.1
27.9
12.2
2,344
15.7
14.5
490
31.1
1,920
10.6
8.0
9.2
22,324
-1239
24.3
21.1
Jun 16
224
-0.3
15,167
1.5
28.1
12.0
2,445
16.1
15.2
572
27.7
2,043
6.4
23.2
9.7
22,374
50
23.4
19.8
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.
Ashish Chopra
(Ashish.Chopra@MotilalOswal.com); +91 22 6129 1530
Sagar Lele
(Sagar.Lele@MotilalOswal.com); +91 22 6129 1531

Mphasis
Revenues led lower by Digital Risk
MPHL’s 4QFY17 reported revenue declined by 0.9% QoQ to USD222m, below
our estimate of 1.1% QoQ growth.
In INR terms, revenue declined 2.0% QoQ to INR15.1b. It clocked YoY decline of
0.7% in 4QFY17.
The company signed deals with a TCV of USD90m during the quarter, taking the
total for FY17 to USD365m in the Direct International business, a growth of 20%
YoY.
Of the deal wins in FY17, 61% were in new generation services, a 21% increase
over FY16.
Exhibit 1: Revenue decline led by Digital Risk
Revenue (USD m)
2.7
1.1
-3.4
-5.4
226
228
234
237
229
225
224
224
224
222
Growth (%)
-0.3
-0.2
-0.3
-0.9
0.8
-3.1
-4.2
-1.6
250
239
Source: MOSL, Company
Our expectation was driven by stability in the HP channel and Digital Risk, and
continued traction in the Direct International business.
HP channel grew for the third consecutive quarter at 0.6% QoQ. Prior to
2QFY17, this business had declined for 20 straight quarters.
In the Direct business, while revenue from developed markets grew by 2.3%
QoQ, the Direct Emerging business declined by 21.8% QoQ.
The Direct Emerging business has seen a consistent decline (partly stemming out
of a conscious effort to de-focus from it) since the last seven quarters. In
3QFY17, the Direct International business had seen a growth of 16.7% QoQ.
Digital Risk declined in revenue by 9.3% QoQ to USD29m.
Exhibit 2: HP channel sees growth after 20 quarters of decline
Revenues from HP channel - USDm (LHS)
(1.9)
(9.2)
(8.6)
(5.5)
(1.9) (3.5)
(4.8)
(5.5) (6.8)
QoQ growth - % (RHS)
1.9 0.5 0.6
(1.2)
(4.2)
(11.8)
(8.2)
(8.5) (8.9)
Mar 14*: 2M quarter, Jun-14 growth number normalized for comparison Source: MOSL, Company
26 May 2017
2

Mphasis
Exhibit 3: Bounce-back seen in the Direct International business
Revenues from Direct Internation (ex. Digital Risk) (USDm)
5.9
4.0
1.0
0.8
0.8
1.4
3.9
3.0
2.1
0.2
(0.6)
QoQ growth - % (RHS)
2.3
103.0
103.8
104.6
106.0
112.3
116.8
121.3
125.0
127.6
127.9
127.1
130.1
Source: MOSL, Company
Continued improvement in operating margins
EBIT margin declined by 10bp during the quarter to 14.6%, bettering our
expectation by 10bp (estimate of 14.5%; -20bp).
Gross margin expanded by 90bp QoQ to 28.7%, and SGA increased (as a
percentage of sales) to 12.8%. Together these two factors led to the 20bp QoQ
expansion in EBIT margins.
PAT declined by 5.4% QoQ to INR2.04b, compared to our estimate of INR1.95b,
on account of the margin beat.
Exhibit 4: Margins aided by hedge gains
EBIT Margin (%)
14.8
13.0
7.9
5.2
13.0
12.5
5.9
12.7
6.6
13.9
6.2
13.2
6.1
S&M as % of Sales
14.3
6.7
15.2
15.3
14.7
6.9
14.6
7.0
5.9
6.5
6.5
Source: MOSL, Company
Exhibit 5: HP seized to decline, while Digital Risk was under pressure
HP Channel
Direct Channel
Digital Risk Rev. (USD m)
54 59 60 63 64 64 64
65 69 71 73
76 76 77 76 76 76
46 41 40 37 36 36 36
35 31 29 27
24 24 23 24 24 24
Mar 14*: 2 Month quarter
Source: Company, MOSL
26 May 2017
3

Mphasis
Takeaways from Management Commentary
Another dimension to the HP channel:
Revenue from the HP channel has been
seeing stability post the MSA signed last year. MPHL announced a new
partnership with DXC Technologies, as a solution partner to transform and
modernize applications for public, private and hybrid cloud. The two companies
would work together to help clients accelerate the modernization of their
applications.
Direct Core to grow above industry:
The performance in Direct Core has been
impacted recently by restructuring in one of the top clients. This impact is likely
to continue in the near-term. However, despite this, the company expects
above-market growth for FY18 in this segment. The growth is likely to be led in
2H as new deal wins start to ramp up.
Blackstone portfolio offers large opportunity:
The Blackstone portfolio has 80
companies, with a combined annual technology spend of USD1.5b. MPHL has
identified 20 companies that fit a size/services/vertical criteria to initially target.
This quarter, it won one deal from this portfolio, and there are currently three
more in the pipeline.
Digital Risk soft:
Revenue in Digital Risk declined by 10% QoQ, led by pressures
in the US mortgage market, which led to a decline in volume in both, origination
and the refinancing. New deals wins have been robust as the company won a
contract with a large US bank with a TCV of USD50m. However, this would only
help seize the decline in the portfolio. Revenue in Digital Risk is expected to be
between USD28-30m per quarter through the rest of the year.
Maintained margin outlook:
MPHL maintained its 14-16% EBIT margin guidance
range. The company’s current outstanding hedges are expected to result in
more revenue in FY18 compared to the previous year, thereby protecting
margins at current levels.
Change in estimates
The lower-than-expected revenue growth performance in 4QFY17 has
hampered the exit rate for the year resulting in a lower expectation for FY18.
This has led to a cut in our estimates to the tune of 3.3/2.0% for FY18/19E. Our
expectation for FY18 is also shaped by the prolonged weakness seen in Digital
Risk despite strong deal wins.
Given the expected revenue and profitability pressure in Digital Risk, continued
investments in the business and improving revenue mix; over a two-year period
we expects margins to remain stable at 15%.
Consequently, our EPS estimates for FY18/19E have moved by -3.0/0.2%
respectively.
Revised
FY18E
66.3
942
14.6
41.7
Earlier
FY18E
67.6
975
14.7
43.0
Change
FY18E
-2.0%
-3.3%
-13bp
-3.0%
Exhibit 6: Change in estimates
FY17
67.1
894
15.0
38.5
FY19E
67.3
1,037
15.0
45.0
FY17
67.1
900
14.9
40.0
FY19E
68.5
1,058
14.5
44.9
FY17
0.0%
-0.7%
4bp
-3.7%
FY19E
-1.8%
-2.0%
47bp
0.2%
INR/USD
USD Revenue - m
EBIT Margin (%)
EPS - INR
Source: MOSL, Company
26 May 2017
4

Mphasis
Valuation and view
Our FY19 revenue estimate stands at USD1,037m and compares with FY13 (YE
October) annual revenues of USD1,025m. Revenues from the HP channel have
posted a decline for the last 20 quarters and now constitutes to ~23% of total
revenues. The contribution of the HP channel has significantly reduced in the
portfolio, and the company has laid its focus on the direct international channel,
which it aims to grow above industry average.
There has been significant addition to visibility post the announcement of
Blackstone’s acquisition of HPE’s stake and a revenue commitment by HP to the
tune of USD990m in cumulative revenue over a five-year period. This resulted in
the first quarter of growth in the HP channel in five years in 2QFY17.
Additionally, the company has expanded this relationship by signing a
partnership agreement with DXC Technologies.
However, that doesn’t change the fact that overall revenue growth still would
remain under pressure in FY18; largely led by continued pressure in Digital Risk,
poor exit rate for FY17 and volatility in performance in the Direct Emerging business.
Digital Risk tends to be highly dependent on transaction volumes in the US
mortgage market. While the interest rate reversal cycle in the US provides some
optimism to spend in the BFSI vertical, it negatively impacts mortgage volumes,
resulting in some drag for Mphasis; and impacting predictability.
With strong deal wins, and the hive-off of the domestic BPO business, we
estimate MPHL to post growth at a CAGR of 7.7% over FY17-19E. Revenue
growth confidence would be the single most important factor for a re-rating.
However, with uneven growth seen in Digital Risk since its acquisition,
predictability had been low. With the improved revenue mix, MPHL has
significant scope to improve its margin profile. It has been maintaining its 14-
16% operating margin band as the revenue mix continues improving.
Impressive execution in Direct International business lends visibility of above-
industry growth in ~55% of MPHL’s business. Our target price of INR600
discounts FY19 EPS by 13x. Neutral.
Momentum gain in Direct International channel
Continued uptick in operating margin
Pick up in quarterly deals TCV
Continued volatility in Direct Channel emerging markets
Failure to grow Direct International channel faster than industry growth
Volatility in Digital Risk
Exhibit 7: MPHL 1-year forward PE chart
38
26
14
2
11.8
3.3
11.8
1.0
PE (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
27.5
Key Triggers
Key risks
Exhibit 8: MPHL 1-year forward PB chart
5.5
4.0
13.1
2.5
1.7
1.2
2.2
PB (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
4.5
1.9
Source: Company, MOSL
Source: Company, MOSL
26 May 2017
5

Mphasis
Story in charts
Exhibit 9: Situation at HP improving sequentially…
HP Revenues
-5.9
-17.0
-22.4
455
157
325
-13.8
-26.1
241
-11.1
65.9
56.5
% Change
Exhibit 10: Direct business volatile because of Emerging
revenue and Digital Risk
Direct Channel (%)
44.4
36.8
HP Channel (%)
34.5
27.6
23.4
-19.9
731
586
214
34.1
43.5
55.6
63.2
65.5
72.4
76.6
5MFY14* comparison normalized to be comparable
Exhibit 11: India revenue has been volatile
21.4
3.4
-10.4
India Revenue
-1.1 -0.5 1.7
-24.3
-9.6
% Change
15.1
-3.8 -2.1
-15.7
Exhibit 12: Portfolio issues have dragged EPS lower year
after year
12.5
-4.8
-19.0
48.6
39.4
37.5
35.3
14.7
32.3
34.5
38.5
EPS
% Change
-0.1
-8.6
6.8
11.8
-5.8
5MFY14* comparison normalized to be comparable
Exhibit 13: 14-16% target EBIT margin band
EBIT Margin (%)
5.4
5.2
6.1
6.2
S&M (%)
6.9
6.4 6.7
Exhibit 14: Volatility in Digital Risk revenues
Digital Risk Rev. (USD m)
6.0
4.4
4.6
20.6 16.4 16.4 15.3 15.2 13.3 13.5 15.0 14.6 15.0
Source: Company, MOSL
26 May 2017
6

Mphasis
Operating metrics
Operating metrics
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17
Vertical Contribution (%)
Banking and Capital Markets
40.7
41.9
39.6
41.8
44.3
46.9
49.7
48.4
48.9
50.3
49.0
48.8
Insurance
12.8
13.4
14.9
15.3
15.5
15.2
15.7
16.1
15.2
14.5
15.0
14.6
IT, Commn & Entmt
16.8
16.9
16.9
15.6
14.3
12.7
10.0
10.7
10.2
9.6
9.7
10.7
Emerging Industries
29.7
27.8
28.6
27.3
25.8
25.2
24.6
24.8
25.7
25.7
26.3
25.9
Total
100
100
100
100
100
100
100
100
100
100
100
100
Revenue by Project Type (%)
TTM
87
86
83
86
88
86
81
79
80
81
79
81
FPP
13
14
17
14
12
14
19
21
20
19
21
19
Revenue by Delivery Location (%)
Onsite
45
46
43
47
49
49
51
51
51
52
51
51
Offshore
55
54
57
53
51
51
49
49
49
48
49
49
Secondary Market Segment (%)
HP Channel
36
36
35
31
29
27
24
24
23
24
24
24
Mature Market - Direct Channel
56
58
56
60
64
67
70
71
73
72
71
72
Emerging Market - Direct Channel
8
7
9
9
7
7
5
4
4
4
5
4
Service Type (%)
App Maintenance
28
29
29
29
29
30
33
34
36
35
37
37
App Development
22
24
25
25
25
24
23
25
23
24
23
24
Customer Service
5
6
6
6
5
4
2
2
2
2
2
2
Service/Technical Help Desk
3
3
2
2
2
2
2
2
2
2
2
2
Transaction Processing Service
5
6
7
7
7
7
7
7
7
7
6
7
Infra Management Services
20
18
20
17
15
15
15
14
14
14
14
14
Knowledge Processes
16
15
11
14
17
18
18
16
16
16
15
14
License Income
0
0
1
1
1
0
1
0
0
0
0
1
CLIENT METRICS
Client wins
BCM
9
1
2
4
5
5
5
6
1
3
1
1
Insurance
1
0
0
1
2
0
2
2
0
1
2
1
ITCE
1
2
0
2
0
0
0
1
2
1
1
1
Emerging industries
5
7
1
5
3
3
1
2
0
1
2
2
Total
16
10
3
12
10
8
8
11
3
6
6
5
Client wins Channels
Direct Channel
11
5
3
8
10
7
5
11
3
4
4
4
HP Channel
5
5
0
4
0
1
3
0
0
2
2
1
Total Client additions
16
10
3
12
10
8
8
11
3
6
6
5
Clients Contributing More than
USD1m
110
104
100
102
98
100
102
103
102
98
92
90
USD5m
42
41
42
39
36
39
35
35
28
27
30
36
USD10m
17
17
17
19
20
19
18
14
15
14
14
14
USD20m
10
10
8
9
8
7
8
8
9
9
8
7
Clients - Direct Channel
USD1m
57
52
49
57
58
61
63
64
65
64
59
57
USD5m
25
25
25
25
24
27
25
27
22
21
24
26
USD10m
12
12
12
14
15
15
14
11
12
12
12
12
USD20m
7
7
6
7
6
5
6
6
7
7
7
6
Clients - HP Channel
USD1m
53
52
51
45
40
39
39
39
37
34
33
33
USD5m
17
16
17
14
12
12
10
8
6
6
6
10
USD10m
5
5
12
5
5
4
4
3
3
2
2
2
USD20m
3
3
2
2
2
2
2
2
2
2
1
1
Source: MOSL, Company
26 May 2017
7

Mphasis
Financials and Valuations
Y/E Mar
INR/USD Rate
Revenues (USD m)
Total Delivery Headcount
Net Addition
Per Capita Productivity (USD)
HP Channel Revenue (%)
Direct Channel Revenue (%)
Key assumption
2012
53.0
1,036
36,640
-3,768
28,284
56.5
43.5
2012
53,574
5.1
10,511
19.6
1,745
8,766
0
1,513
0
10,279
2,357
22.9
0
7,922
7,922
-4.6
2012
2,101
41,946
44,047
3,299
-1,015
46,331
11,401
9,041
2,360
150
25,192
22,970
0
12,102
4,216
6,652
13,953
8,765
5,188
9,017
46,331
2013
57.5
1,025
37,052
412
27,655
44.4
55.6
2013
57,963
8.2
10,335
17.8
1,446
8,889
0
1,062
0
9,951
2,514
25.3
0
7,437
7,437
-6.1
2013
2,101
47,243
49,344
5,600
-1,015
53,929
10,892
8,770
2,122
266
18,995
26,060
0
12,582
5,943
7,535
16,013
10,167
5,846
10,047
53,929
2014
58.7
427
35,663
-1,389
28,717
36.8
63.2
2014
25,939
7.4
4,397
17.0
504
3,893
0
389
0
4,282
1,191
27.8
0
3,091
3,091
-0.3
2014
2,101
49,049
51,150
5,555
-968
55,737
10,912
8,734
2,178
62
18,154
26,522
0
12,967
4,700
8,855
13,044
9,446
3,598
13,478
55,737
2015
61.3
944
34,059
-1,604
27,716
34.5
65.5
2015
57,949
-6.9
8,701
15.0
980
7,721
0
1,687
0
9,408
2,630
28.0
0
6,778
6,778
-8.6
2015
2,101
52,697
54,798
6,253
-826
60,225
10,055
8,499
1,556
318
14,431
35,014
0
11,371
13,311
10,332
12,875
7,145
5,730
22,139
60,225
2016
65.7
926
22,324
-11,735
41,465
27.6
72.4
2016
60,879
5.1
8,970
14.7
744
8,226
0
1,712
0
9,938
2,696
27.1
0
7,242
7,242
6.9
2016
2,102
60,828
62,930
5,338
-941
67,327
9,300
8,128
1,172
953
21,118
31,968
0
12,333
8,783
10,852
10,826
8,681
2,145
21,142
67,327
2017
67.1
894
21,979
-345
40,658
23.4
76.6
2017
60,763
-0.2
9,688
15.9
592
9,096
0
2,246
0
11,342
3,155
27.8
0
8,187
8,187
13.0
2017
2,104
59,420
61,524
2,760
-3,527
60,757
3,400
1,167
2,233
387
23,956
28,998
0
10,871
6,315
11,812
8,888
6,705
2,183
20,110
60,755
2018E
66.3
942
22,434
455
41,989
19.9
80.1
2018E
63,307
4.2
9,729
15.4
518
9,212
0
1,902
0
11,114
3,056
27.5
0
8,057
8,057
-1.6
2018E
2,104
51,356
53,460
1,560
-3,527
51,493
5,200
1,685
3,515
-13
12,926
30,852
0
11,885
7,155
11,812
9,856
7,330
2,526
20,996
51,493
2019E
67.3
1,037
24,334
1,900
42,606
16.9
83.1
2019E
70,277
11.0
11,094
15.8
558
10,537
0
1,452
0
11,988
3,297
27.5
0
8,692
8,692
7.9
2019E
2,104
54,957
57,061
360
-3,527
53,894
7,000
2,242
4,758
-413
12,926
33,455
0
13,144
8,498
11,812
10,901
8,107
2,794
22,554
53,894
Income Statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
(INR Million)
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
(INR Million)
26 May 2017
8

Mphasis
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/Sales
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios (%)
Fixed Asset Turnover (x)
Debtors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2012
37.5
46.0
209.6
17.0
45.3
15.3
12.5
2.7
1.8
9.0
3.0
19.1
17.7
34.7
20.6
86
2013
35.3
42.3
234.9
17.0
48.1
16.2
13.6
2.4
1.7
9.8
3.0
15.9
14.5
28.0
25.9
78
2014
14.7
17.1
243.5
7.0
47.6
16.2
14.0
2.4
1.7
9.8
2.9
14.8
5.5
8.8
29.0
74
2015
32.3
36.9
260.8
16.0
49.6
17.8
15.5
2.2
1.7
11.4
2.8
12.8
11.5
16.7
31.0
77
2016
34.5
38.0
299.4
20.0
58.0
16.6
15.1
1.9
1.6
10.7
3.5
12.3
11.2
17.0
44.6
71
2017
38.9
41.7
292.4
17.0
43.7
14.7
13.7
2.0
1.5
9.6
3.0
13.2
12.4
18.5
35.7
70
2018E
41.7
40.8
254.1
22.0
52.7
13.7
14.1
2.3
1.6
10.5
3.8
14.0
13.5
19.5
22.0
66
2019E
45.0
44.0
271.2
22.0
48.9
12.7
13.0
2.1
1.4
9.0
3.8
15.7
15.5
21.4
17.0
65
0.0
2012
10,511
1,513
3,862
-2,357
-40
13,489
-1,309
12,180
-7,427
-914
-9,650
1,307
353
0
-4,180
-2,520
1,319
2,897
4,216
0.0
2013
10,335
1,062
697
-2,514
0
9,580
-1,324
8,256
6,197
-12,887
-8,014
2,040
2,301
0
-4,180
161
1,727
4,216
5,943
0.0
2014
4,397
389
-4,674
-1,191
47
-1,032
-356
-1,388
841
634
1,119
436
-45
0
-1,721
-1,330
-1,243
5,943
4,700
0.0
2015
8,701
1,687
-50
-2,630
142
7,850
-614
7,236
3,723
84
3,193
903
698
0
-4,033
-2,432
8,611
4,700
13,311
0.0
2016
8,970
1,712
-3,531
-2,696
-115
4,340
-995
3,345
-6,687
-1,161
-8,843
5,934
-915
0
-5,044
-26
-4,529
13,310
8,782
0.0
2017
9,688
2,246
-1,436
-3,155
-2,586
4,757
-1,087
3,670
-2,838
8,873
4,948
-5,305
-2,578
0
-4,289
-12,172
-2,467
8,782
6,315
0.0
2018E
9,729
1,902
-46
-3,056
0
8,529
-1,400
7,129
11,030
0
9,630
-11,030
-1,200
0
-5,092
-17,322
837
6,315
7,152
0.0
2019E
11,094
1,452
-215
-3,297
0
9,034
-1,400
7,634
0
0
-1,400
0
-1,200
0
-5,092
-6,292
1,342
7,152
8,495
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
(INR Million)
26 May 2017
9

Mphasis
Corporate profile
Company description
MphasiS, an HP-EDS company is amongst the top IT
service providers from India. It has a balanced mix of
Application and BPO businesses, with good growth in
ITO business, and support of its US-based parent, HP-
EDS. Mphasis employs over 35,900 people.
Exhibit 1: Sensex rebased
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Mar-17
Promoter
DII
FII
Others
60.4
9.9
20.4
9.3
Dec-16
60.4
10.2
20.7
8.6
Mar-16
60.5
9.9
22.1
7.5
Source: Capitaline
Exhibit 3: Top holders
Holder Name
ABERDEEN GLOBAL INDIAN EQUITY LIMITED
BAJAJ ALLIANZ LIFE INSURANCE COMPANY
LTD
LIC OF INDIA MARKET PLUS 1 GROWTH
FUND
ICICI
PRUDENTIAL
LIFE
INSURANCE
COMPANY LTD
ICICI PRUDENTIAL VALUE DISCOVERY FUND
% Holding
4.9
2.3
1.6
1.4
1.1
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
D S Brar
A Sivaram Nair
Nitin Rakesh
Designation
Chairman
Company Secretary
Additional Director &
CEO
Exhibit 5: Directors
Name
Amit Dalmia
Dario Zamarian
Jan Kathleen Hier
Paul James Upchurch
Name
Amit Dixit
David Lawrence Johnson
Narayanan Kumar
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
S P Nagarajan
S R Batliboi & Associates
Type
Secretarial Audit
Statutory
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY18
FY19
MOSL
forecast
38.3
41.3
Consensus
forecast
39.4
42.4
Variation (%)
-2.8
-2.5
Source: Bloomberg
Source: Capitaline
26 May 2017
10

Mphasis
NOTES
26 May 2017
11

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Mphasis
Disclosure of Interest Statement
Analyst ownership of the stock
No
Served as an officer, director or employee -
No
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MPHASIS
26 May 2017
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