21 May 2019
4QFY19 Results Update | Sector: Technology
Tech Mahindra
BSE SENSEX
38,970
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
S&P CNX
11,709
TECHM IN
985
761.2 / 10.9
846 / 613
-3/1/0
2529
64.1
CMP: INR773 TP: INR890 (+15%)
Buy
Communication and Enterprise swap momentums
A contrasting year for revenues and margins:
For FY19, TECHM’s USD
revenue grew 4.2% YoY, EBITDA increased 34% YoY and PAT was up 13%
YoY. Including the buyback of INR19.6b, the total payout for the year stood
at 74.5%. For 4QFY19, USD revenue grew 1.9% YoY (our estimate: +3.5%
YoY), EBITDA increased 16% YoY (our estimate: 23%) to INR16.4b, while PAT
declined 7% YoY (our estimate: -1% YoY) to INR11.3b.
4QFY19 dragged by Enterprise:
Communications
(42.7% of revenue)
surprised positively with sequential growth of 4.4% versus our estimate of
~3%. This was supported partly by seasonality in its products subsidiary
Comviva, which was sanguine versus tepid expectations. However,
Enterprise
(57.3% of revenue) disappointed with a sequential decline of
2.2% in revenue versus our estimate of 1.5% growth. Revenue declined in
four of the five verticals in Enterprise. The vertical was marred by the
deferral of Healthcare projects into 1Q/2QFY20 and the 3Q base effect for
Manufacturing and Retail. Profitability was impacted by a one-time non-
recurring expense in SGA, excluding which, the EBITDA margin was 18.7%
versus our estimate of 19.1%.
Expect traction to shift from Enterprise to Communications:
TECHM’s
earlier outlook was of mid-single-digits growth in Communications and 8-
10% growth in Enterprise. However, while the overall growth rate may
remain in high-single-digits, Communications will likely be better, while
Enterprise may soften. Three quarters of healthy growth, coupled with a
strong order book, drive confidence in Communications. For margins,
TECHM expects to maintain current levels at the least, despite 1QFY20
facing headwinds from wage hikes, visa costs and Comviva seasonality.
Subsidiary companies’ margins and utilization remain levers over the near
term, while offshore revenue percentage is a medium- to long-term lever.
Valuation view:
We cut our revenue estimates for FY20/21 by ~1pp, mainly
on the back of the 4Q miss and the softer outlook on Enterprise. We were
already building in a gradual improvement in Communications on the back
of service providers’ 5G investments. We continue estimating an EBITDA
margin band of 18-18.5%. Our earnings estimates are little changed post the
results. Over FY19-21, we expect USD revenue CAGR of 8% and earnings
CAGR of 13%. Our TP of INR890 (15% upside) discounts forward earnings by
14.5x, the average multiple over the last five years. Maintain
Buy.
Financials & Valuations (INR b)
2019 2021E
Y/E Mar
347.4
372.3
Net Sales
63.4
67.4
EBITDA
43.6
48.1
PAT
48.2
54.0
EPS (INR)
12.8
12.1
Gr. (%)
228.7
240.4
BV/Sh (INR)
22.0
23.1
RoE (%)
18.7
19.8
RoCE (%)
16.0
14.3
P/E (x)
3.4
3.2
P/BV (x)
2021E
410.2
75.4
54.3
61.1
13.2
273.1
24.2
21.0
12.6
2.8
Estimate change
TP change
Rating change
Ashish Chopra
– Research analyst
(Ashish.Chopra@MotilalOswal.com); +91 22 6129 1530
Research Analyst: Anmol Garg
(Anmol.Garg@MotilalOswal.com); +91 22 7193 4271 /
Mohit Sharma
(Mohit.Sharma@MotilalOswal.com)
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.
 Motilal Oswal Financial Services
Tech Mahindra
Quarterly Performance (Consolidated)
Y/E March
1Q
Revenue (USD m)
1,138
QoQ (%)
0.6
Revenue (INR m)
73,361
YoY (%)
6.0
GPM (%)
28.0
SGA (%)
15.3
EBITDA
9,347
EBITDA Margin (%)
12.7
EBIT Margin (%)
9.4
Other income
4,106
Interest expense
370
ETR (%)
25.4
PAT excl. BT amort & EOI
7,985
QoQ (%)
35.8
YoY (%)
21.7
EPS (INR)
9.0
Headcount
1,15,990
Util excl. trainees (%)
77.0
Attrition (%)
17.0
Offshore rev. (%)
36.3
FY18
FY19
FY18
FY19
Est.
Var.
2Q
3Q
4Q
1Q
2Q
3Q
4Q
4Q (% / bp)
1,179
1,209
1,244
1,224
1,218
1,261
1,268
4,771
4,971
1,288
-1.6
3.6
2.5
2.9
-1.6
-0.5
3.5
0.5
9.6
4.2
2.2%
51bp
76,064 77,760 80,545 82,763 86,298 89,437 88,923 3,07,730 3,47,421 90,810
-2.1
6.1
2.9
7.5
12.8
13.5
15.0
10.4
5.6
12.9
12.7 -234bp
29.3
30.8
31.9
30.7
34.0
33.1
33.1
30.0
32.8
33.0
9bp
14.7
14.6
14.3
14.3
15.3
13.8
14.7
14.7
14.5
13.9
78bp
11,057 12,638 14,119 13,569 16,186 17,226 16,387 47,161 63,368 17,360
-5.6
14.5
16.3
17.5
16.4
18.8
19.3
18.4
15.3
18.2
19.1
-69bp
11.0
12.7
13.8
13.0
15.3
16.1
15.4
11.8
15.0
15.9
-56bp
3,222
2,250
4,513
1,114
1,751
806
1,671 14,091
5,342
2,139
-21.9
386
341
527
305
388
358
281
1,624
1,332
344
-18.3
25.3
21.8
18.6
21.2
26.8
17.8
23.5
22.4
22.4
25.0
8,362
9,422 12,221
8,979 10,642 12,029 11,325 37,990
42,975
12,092
-6.3
4.7
12.7
29.7
-26.5
18.5
13.0
-5.9
0.5
29.7
10.1
107.9
12.4
27.3
27.7
-7.3
38.3
13.1
-1.1
9.4
10.6
13.7
10.1
11.9
13.5
12.6
42.6
47.7
13.5
1,17,225 1,15,241 1,12,807 1,13,552 1,18,391 1,21,842 1,21,082 1,12,807 1,21,082 1,25,491
-3.5
81.0
83.0
84.0
81.0
81.0
82.0
82.0
81.1
81.5
81.9
10bp
16.0
17.0
18.0
19.0
20.0
21.0
21.0
35.9
34.2
33.0
33.4
35.5
34.5
34.8
34.8
34.5
34.7
10bp
Revenue miss, dragged by Enterprise
TECHM’s 4QFY19 revenue grew 0.5% QoQ to USD1267.5m – a 1.6% miss to our
estimate of USD1,288m.
This implies that CC revenue was flattish during the quarter, considering our
assumption of ~70bp tailwind from cross currencies.
Communications surprised with QoQ growth of 4.4% (the only silver lining)
compared to our estimate of ~3%.
However, Enterprise revenue disappointed, with a decline of 2.2% QoQ
compared to our estimate of 1.5% growth. Revenues declined in four out of the
five verticals in Enterprise.
Exhibit 1: Revenue growth declined due to Enterprise segment
10.0
6.1
4.3
1,032
1,072
10.6
10.3
10.0
Revenue (USD m)
10.0
8.3
YoY (%)
7.6
3.3
4.3
1.9
1,268
1,116 1,131 1,138 1,179 1,209 1,244 1,224 1,218 1,261
Source: MOFSL, Company
EBITDA margin below estimate on higher SGA
21 May 2019
EBITDA margin shrank 90bp QoQ to 18.4%, 70bp miss to our estimate of 19.1%.
EBITDA miss was mainly on account of SGA, which increased 90bp QoQ to 14.7%
compared to our estimate of 13.9%. SGA included one-time expenses, adjusted
for which EBDITA was 18.7%.
Gross margin at 33.1% (flat QoQ) was in line.
2
 Motilal Oswal Financial Services
Tech Mahindra
PAT was INR11.3b (-6% QoQ, -7% YoY) – 6% below our estimate, mainly due to
the operational miss.
Exhibit 2: Margins contracted on account of higher SGA
EBITDA margin (%)
15.7
15.0
12.0
16.3
14.6
SGA (% of sales)
17.5
16.4
14.3
18.8
19.3
18.4
14.9
14.6
14.9
15.7
14.9
15.3
12.7
14.5
14.7
14.3
15.3
13.8
14.7
Source: MOFSL, Company
Exhibit 3: Utilization lever played out well
Utilization (incl Trainees)
82.0
83.0
81.0
81.0
81.0
81.0
78.0
78.0
77.0
77.0
77.0
83.0
83.0
Utilization (excl trainees)
84.0
84.0
81.0
81.0
84.0
83.0
83.0
82.0
82.0
82.0
80.0
Source: Company, MOFSL
Continued growth in BPO, Telecom
In terms of verticals, Telecom grew by 4.4% QoQ – a continued improvement
was seen in the vertical after prolonged weakness.
Enterprise remained flat QoQ. Tech/Media/Entertainment grew 7.5% QoQ,
while rest of the segments declined.
Growth continued to be led by BPO, where revenue contribution inched up to
8.8% from 7.3% in 4QFY18.
Software professionals headcount continued to decline (-308 QoQ to 71,477).
BPO headcount, too, declined by 358 in the quarter to 43,081. Overall
headcount declined by 760 QoQ to 121,082.
21 May 2019
3
 Motilal Oswal Financial Services
Tech Mahindra
Exhibit 4: Communication revenue seen getting better
Telecom (USD M)
1
-3
-3
1
1
-1
-2
-1
485
-2
-6
508 519 528 524 514 515 517 518
506 518 541
523 552 587 607 624 662 693 727 739 714 743
0
Telecom YoY (%)
5
16
12
8
7
728
Non-Telecom (USD m)
21
19 20 18 20
19
YoY (%)
19
0
Source: MOFSL, Company
Exhibit 5: Communication, TME lead growth
Verticals
Communication
Manufacturing
Tech | Media | Entertainment
BFSI
Retail | Transport | Logistics
Others
Total
Contr to
Rev. (%)
42.7
20.2
7.5
13.1
6.4
10.2
100.0
Growth -
QoQ (%)
4.4
-0.9
7.7
-1.7
-4.0
-9.3
0.4
4Qtr
CQGR (%)
1.1
1.6
1.1
0.7
1.3
-4.7
0.4
Source: Company, MOFSL
Growth during the quarter came from RoW (+5.6% QoQ), while the US (-1.6%)
and Europe (-0.5% QoQ) showed a downtrend.
Exhibit 6: Growth from RoW offset by a decline in the Americas, Europe
Geographies
Americas
Europe
ROW
Total
Contr to
Rev. (%)
46.4
28.6
24.9
100.0
Growth -
QoQ (%)
-1.6
-0.5
5.6
0.4
4Qtr
CQGR (%)
-0.1
-0.4
2.5
0.4
Source: Company, MOFSL
Performance across top clients was sanguine, with top-5 growing by 1.4% QoQ
(0.1% YoY), 6-10 clients growing by 2.8% QoQ (-0.3% YoY) and 11-20 growing by
6.2% QoQ (0.5% YoY).
Growth came from non-top accounts on account of higher digital penetration.
Digital now accounts 34% of revenues.
Exhibit 7: Growth coming from beyond top accounts
Client concentration (QoQ)
Top 5 clients
Top 6-10 clients
Top 11-20 clients
Contr to
Rev. (%)
22.8
9.2
13.1
Growth - QoQ
(%)
1.4
2.8
6.2
4Qtr
CQGR (%)
0.0
-0.3
0.7
Source: Company, MOFSL
21 May 2019
4
 Motilal Oswal Financial Services
Tech Mahindra
Takeaways from management commentary
Growth outlook
Earlier outlook was of mid-single-digits growth in Telecom and 8-10% in
Enterprise. However, while the overall growth rate may remain in high-single-
digits, the profile of growth will be more balanced.
There have been three quarters of growth in Communications along with
healthy deal wins. That will continue to grow in a meaningful way.
There is a strong funnel in Enterprise, and that could change the outlook
upwards if and when TECHM lands those deals.
Communications
There will be repurposing of capital as service providers move from 5G trials and
go on to modernize their systems.
Focus has been on large deals, larger relationships (potentially big spenders that
may not be in top-20 list today).
Positive outlook with the TCV of deal wins in the last three quarters.
Seasonality: Some of the deals won will be ramping up in 2Q and beyond. 1Q
will be muted. The performance will improve as we move through the year.
Seasonality will continue playing out on expected lines.
5G roll out
It is already a catalyst for demand. Early days yet, but should pick up some
speed towards the end of this year.
Regions such as the Middle East may latch on to 5G before Europe and some of
the others. Some deal wins in the last quarter may not directly qualify as 5G, but
the long-term orientation of those spends was to be 5G ready.
Samsung is an important relationship across the device and network footprint.
Working with them for the tie-ups they have in the US.
Industrial IoT will always be an opportunity. That will be a couple of cycles
behind the service providers. Network roll-outs will have to precede that trend.
Impact from US’ Huawei ban on 5G spending
Don’t perceive any impact from the recent developments in Huawei. Over the
next 12 months, anyways most of the 5G activities were to be headquartered
out of the US. TECHM is playing in the software leg, and don’t see much impact
on the business as of now. Huawei is not in TECHM’s top-20/30 customer list.
Enterprise
Higher 3Q base hurt growth in 4Q both in Manufacturing and in Retail. That was
compounded by deferral of projects in Healthcare into 1Q. All verticals declined
QoQ. TECHM executed a few not-so-profitable deals in 4Q, which also had an
impact.
The funnel is building up which TECHM should be able to convert. That will drive
better growth than the current outlook
BFS – lot of change-the-business work in the segment, which is project-centric in
nature. Continuing to build a proposition in the vertical.
21 May 2019
5
 Motilal Oswal Financial Services
Tech Mahindra
Focus on M&A remains. The fact that there was less M&A in FY19 was a function
of not finding the right target rather than change in direction or strategy.
Deal wins in Enterprise have been more spaced out. That is the reason for
volatility of growth there. The recovery will be gradual in 1Q and 2Q.
Margins and Attrition
4QFY19 had an element of a charge that is not expected to repeat. Normalized
margins are 18.7-18.8% - the sequential decline is owing to currency
movements.
Attrition has come down on a quarterly annualized basis (~200bp). Attrition is
much lower in the top talent. Initiatives such as career transformation programs
have helped contain it slightly.
Wage hikes have been announced and are effective from April 1st, 2019 – which
is higher than normal.
The goal would be to maintain or expand margin by leveraging various levers.
However, it is expecting a softer margin in 1QFY20 given headwinds from
Comviva seasonality, wage hikes and H-1B fees.
Utilization and portfolio companies’ profitability remain levers to margins. In the
later quarters, offshore could be a lever.
Cash flow conversation was strong:
Free cash flow of USD173m at 109% of PAT was
the highest ever in the quarter. DSO was down to 102. Focus on cash generation
continues.
on the balance sheet based on the current hedging position.
Hedge gains at current currency rates:
TECHM realized USD50m of accumulated gains
BPS v/s IT Services
Momentum in BPS has been good – it grew by 5.3% QoQ and 25% YoY.
Within the IT portfolio, traditional is being replaced by Digital services. While
digital grew at ~40%, traditional declined 8-10%. This trend is expected to
continue going forward.
Deal wins:
TCV of deals won grew ~33% YoY in FY19. The pipeline remains strong
with 4QFY19 deal win TCV at USD408m.
Change in estimates
The quarter was marked by growth in Telecom and weakness in Enterprise.
Along with this, the company saw flattish deal wins during the quarter. Our
revenue estimates for FY20/21 are lower by ~1pp, mainly on the back of the 4Q
miss and the softer outlook on Enterprise. This marks our revenue growth for
FY20/21 as 7.5/8.7%.
With regards to margins, we believe that there is little room left for a further
improvement, given operational levers are now played out. Margin for FY20/21
to continue to be at similar level of 18.3%.
Taking these factors and adjusting yield on cash, forex gain, and tax rate, our
EPS estimate are largely unchanged for FY20/21.
21 May 2019
6
 Motilal Oswal Financial Services
Tech Mahindra
Exhibit 8: Change in estimates
INR/USD
USD Revenue - m
USD rev Gr.(%)
EBIDTA Margin (%)
EPS - INR
Revised
FY19 FY20E FY21E
69.9
70.0
71.0
4,971 5,319 5,777
4.2
7.0
8.6
18.2
18.1
18.4
48.2
54.0
61.1
FY19E
70.7
4,991
4.2
18.4
49.0
Earlier
FY20E
70.0
5,365
7.5
18.3
54.1
FY21E FY19E
71.0 -1.1%
5,830 -0.4%
8.7
-1bp
18.3
-18bp
60.7 -1.6%
Change
FY20E
FY21E
0.0%
0.0%
-0.9%
-0.9%
-47bp
-5bp
-16bp
11bp
-0.1%
0.7%
Source: Company, MOFSL
Valuation view
A foreword on the long term industry view:
Growth for Indian IT has gradually
picked up from levels of 6-7% 18 months ago, as Digital services proliferate, which
today have breached 30% of revenues for most prominent companies in the sector.
India will continue to remain the hotbed for talent supply en masse, making a case
for increasing shift of Digital business from onsite. That said, with Automation the
top priority of every Board, without exceptions, delineation of revenue growth with
headcount growth appears obvious – and the only lever to stem the decline in
profitability witnessed in recent years.
TECHM in that industry backdrop
Prowess in Communications:
TECHM has strong capabilities in Communications
(~43% of current revenue) and works with most of the major global service
providers. It has historically benefitted out of upswings in capital expenditure
triggered by adoption of new technology. With 5G implementation being the
next cycle of spending for service providers across the globe, 2019 looks like the
year that will see higher spends in the industry – benefitting TECHM directly,
albeit with a couple of quarters’ lag.
Sustained industry-level growth in Enterprise:
TECHM has been able to see
sustained growth in Enterprise, because of [1] success in large deal wins [2] less
baggage of traditional services, [3] small scale in most verticals and [4] sizeable
Engineering revenue. Industry-average growth has been maintained with the
advantage of base and limited legacy in all verticals. Sustenance of the same will
bode well for overall growth.
Basis the above, we expect TECHM to grow revenues marginally below the industry
as of today. However, any uptick in spend in Telecom would be reflected in better
performance for the company. Assuming a pick-up in spend in Telecom towards
FY20/21E, our earnings CAGR over the next two years is 12% for TECHM, in line with
industry, but with the potential of being higher.
Valuation and view
Restructuring of LCC and sluggish off-take in the large deals signings in
Communications have dragged TECHM’s revenue growth performance, and
more so the margins.
While Telecom recovery may be gradual, there are some structural strengths in
TECHM’s business to drive much improved growth over the medium-to-long
term:
1. Success in large deal wins and industry-average growth in the Enterprise
segment is an encouraging indicator of execution and business traction.
21 May 2019
7
 Motilal Oswal Financial Services
Tech Mahindra
2. Network management services have potentially expanded the addressable
market for TECHM, with directly addressable spend standing at ~USD40b.
5G will help drive the same.
3. TECHM also has a sizeable scale in Engineering services, and the
opportunity in the same can be leveraged, especially after the acquisition
of Mahindra Engineering Services (MES)
Profitability had taken a hit for TECHM over FY14-18, with a cumulative decline
in EBITDA margin of 780bp over FY14-17, improving by 90bp in FY18. This has
been reversed significantly as the company squeezed some of its operational
levers and underwent cost optimization, with FY19 EBITDA margin at 18.2%.
However, further improvement in margins would be a function of a material
pick-up in revenue from the Communications vertical and from better
performance in portfolio companies.
We expect TECHM to grow its revenues/EPS at a CAGR of 8/13% over FY19-21.
At 14.5x/12.7x FY20/21E, TECHM’s valuations remain below that of leading
peers such as TCS, INFO. Our revenue estimates for FY20/21E are lower by ~1pp,
mainly on the back of 4Q miss and a softer outlook on Enterprise. We were
already building gradual improvement in Communications, on the back of
service providers’ 5G investments. We continue to estimate EBITDA margin
band between 18-18.5%. Our earnings estimates are little changed post the
results. Our price target of INR890 (15% upside) discounts forward earnings by
14.5x, the average multiple over the last five years. Maintain Buy.
Key Triggers
Large deal announcements in Enterprise segment.
Continued momentum in Telecom.
Sustained margin improvement on account of measures taken.
Key Risks
Adverse visa-related regulations as TECHM’s proportion of local resources at
onsite is lower than peers.
Currency fluctuations given higher sensitivity to earnings v/s peers.
Further loss of Enterprise momentum.
Exhibit 10: TECHM 1-year forward P/B
Max (x)
-1SD
Exhibit 9: TECHM 1-year forward P/E
25.0
20.0
15.0
10.0
5.0
0.0
P/E (x)
Min (x)
Avg (x)
+1SD
21.1
16.4
12.8
9.2
6.0
4.0
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
3.4
14.8
6.9
4.5
2.0
1.7
2.7
2.0
0.0
3.4
Source: Company, MOFSL
Source: Company, MOFSL
Story in charts
21 May 2019
8
 Motilal Oswal Financial Services
Tech Mahindra
Exhibit 11: Communications vertical >40% of revenue
Retail,
Travel,
Logistics,
6.4
BFSI, 13.1
Tech,
Media, Ent,
7.5
Others,
10.2
Exhibit 12: Growth expected to turn around
17.7
18.2
USD Revenues
Growth (% YoY)
Telecom,
42.7
10.2
7.8
9.6
7.0
4.2
8.6
3,098
Manufactur
ing, 20.2
FY14
3,664
FY15
4,037
FY16
4,351
FY17
4,771
FY18
4,971
FY19
5,319
5,777
FY20E FY21E
Source: Company, MOFSL
Exhibit 13: While the fate of telecom vertical gets better…
Telecom revenues (USD m)
Telecom revenue growth YoY (%)
1.4
-2.6 -3.0
0.6
1.3
-0.7
-2.0
-1.2
-5.8
508 519 528 524 514 515 517 518 485 506 518 541
-1.9
0.1
4.6
Exhibit 14: …growth is declining in Enterprise
1QFY19
29
28
2QFY19
3QFY19
4QFY19
74
17
4
(18)
12
9
12
7
12
5
2
(1)
5
3
(7)
(2)
5
(4)
Source: Company, MOFSL
Exhibit 15: Significant margin improvement lately
EBITDA margin (%)
17.5
14.9 14.9
15.7
14.5
12.0
12.7
16.3
16.4
18.8
19.3
18.4
Exhibit 16: Lever of utilization utilized well so far
Utilization (incl Trainees)
82.0
83.0
81.0 81.0 81.0
81.0
78.0 78.0
77.0 77.0 77.0
83.0
83.0
Utilization (excl trainees)
84.0 84.0
84.0
81.0 81.0
83.0 83.0
82.0
80.0
82.0 82.0
Source: Company, MOFSL
21 May 2019
9
 Motilal Oswal Financial Services
Tech Mahindra
Exhibit 17: Operating metrics
Operating metrics
Revenue by geography (%)
Americas
Europe
Rest of World
Vertical Split (%)
Telecom
Manufacturing
Tech | Media | Entertainment
BFSI
Retail | Transport | Logistics
Others
Onsite-offshore mix (%)
Onsite
Offshore
Client metrics
No. of active clients
% of repeat business
No. of Million $ clients
USD1m+
USD5m+
USD10m+
USD20m+
USD50m+
Client concentration (%)
Top client
Top 5 Clients
Top 6-10
Top 11-20
Headcount (end of period)
Software professionals
BPO
Sales and Support
Total
IT Attrition (LTM) (%)
IT Utilization (%)
IT Utilization (excluding trainees) (%)
Receivable Days (DSO)-Including Unbilled
Borrowings (USD m)
Cash and Cash Equivalent (USD m)
Capital Expenditure (USD m)
3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
46.7
29.4
23.9
45.1
29.6
25.3
46.8
29.8
23.4
45.3
30
24.7
46.9
29.8
23.3
47.4
29.6
23.0
48.2
30
21.9
47.0
29.6
23.4
47.4
28.9
23.7
46.4
28.6
24.9
47.3
18.4
6.4
13.1
7.6
7.1
46.3
19.2
6.2
14.1
6.5
7.7
45.2
19.3
6
14.4
6.8
8.3
43.7
19
5.9
14.1
7.2
9.9
42.8
19.1
6.5
13.3
7.1
11.3
41.6
19.3
7.3
13.0
6.2
12.6
39.6
20.1
7.2
13.6
6.1
13.4
41.5
20.1
7.3
13.5
6.5
11.2
41.1
20.5
7
13.4
6.7
11.3
42.7
20.2
7.5
13.1
6.4
10.2
63.9
36.1
64.3
35.7
63.7
36.3
64.1
35.9
65.8
34.2
67.0
33.0
66.6
33.4
64.5
35.5
65.5
34.5
65.2
34.8
837
93.4
843
93.5
864
97.2
885
95
903
92.9
913
88.4
926
98.5
930
97.4
935
94.6
938
88.7
356
128
65
38
14
354
134
71
36
14
377
139
74
41
14
390
147
81
40
14
389
154
83
40
16
392
156
85
44
16
396
154
86
47
16
407
157
86
45
17
416
157
88
46
18
425
156
83
50
20
27.8
10.6
12.1
26.6
11
11.4
25.9
10.4
12.2
24.8
10.3
11.1
23.2
10
11.8
23.2
9.5
13
21.9
10.6
13.7
23.3
9.4
12.9
22.6
9
12.4
22.8
9.2
13.1
80,858 82,403 78,996 75,587 73,460 72,437 72,462 72,534 71,785 71,477
29,372 28,414 30,332 35,287 35,496 34,190 34,700 39,407 43,439 43,081
6,865
6,876
6,662
6,351
6,285
6,180
6,390
6,450
6,618
6,524
1,17,095 1,17,693 1,15,990 1,17,225 1,15,241 1,12,807 1,13,552 1,18,391 1,21,842 1,21,082
18
77
83
102
211
728.9
28.1
17
77
81
95
210.7
830.2
42.8
17
77
81
104
320.7
931.8
22.5
16
81
81
106
320.7
913.2
70.6
17
83
83
105
341.5
950.1
25.6
18
84
84
102
367.7
1192.9
32.4
19
81
84
108
363.2
1228.7
27.7
20
81
83
112
353.3
1089.8
21.3
21
82
83
107
316
1251.8
31.6
21
82
82
102
288.5
1401.4
29.2
Source: Company, MOFSL
21 May 2019
10
 Motilal Oswal Financial Services
Tech Mahindra
Exhibit 18: Operating metrics
Operating metrics
Rupee USD Rate
Period closing rate
Period average Rate
Proportion of Revenues From Major Currencies
USD
GBP
EURO
AUD
Others
Consolidated Hedge Position
GBP In Mn
Strike rate (INR)
USD In Mn
Strike rate (INR)
Verticals (QoQ)
Telecom
Manufacturing
Tech | Media | Entertainment
BFSI
Retail | Transport | Logistics
Others
Total
Revenue by geography (QoQ)
Americas
Europe
Rest of World
Total
Client concentration (QoQ)
Top 5
Top 6-10
Top 11-20
Net additions
Software professionals
BPO
Sales and Support
Total
3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
67.92
67.7
48.6
12
11.5
4.4
23.5
64.85
66.47
45.9
12.3
11.4
4.6
25.8
64.57
64.44
48.6
12.1
11
4.8
23.4
247
97
878
72.6
-1.8
1.1
-2.6
2.8
5.3
8.4
0.6
4.4
1.3
-6.9
0.6
-2.0
-4.9
7.7
-3,407
1,918
-214
-1,703
65.28
64.45
46.9
12
11.2
4.9
24.9
260
95.4
646
72.2
0.2
2.0
1.9
1.5
9.7
23.6
3.4
0.3
4.3
9.4
3.6
-0.8
2.6
-5.7
-3,409
4,955
-311
1,235
63.87
64.35
47.4
11.4
11.9
4.9
24.5
241
94.2
577
72.2
0.4
3.1
13.0
-3.3
1.1
17.0
2.8
6.2
1.9
-3.3
2.5
-4.1
-0.5
9.0
-2,127
209
-66
-1,984
65.17
64.64
49.4
12.1
11.7
4.6
22.2
229
94.4
598
71
0.0
4.0
15.6
0.6
-10.1
14.8
2.8
4.0
2.2
1.6
2.9
2.9
-2.2
13.4
-1,023
-1,306
-105
-2,434
68.47
67.51
49.3
11.6
11.4
4.8
22.9
213
95.1
894
70.7
-6.4
2.5
-3.0
2.9
-3.2
4.6
-1.6
0.0
-0.3
-6.3
-1.5
-7.1
9.8
3.7
25
510
210
745
72.49
70.68
48.0
11.2
11.4
4.9
24.5
190
97
1069
71.9
4.3
-0.5
0.9
-1.2
6.0
-16.8
-0.4
-3.0
-1.8
6.3
-0.6
5.9
-11.7
-6.3
72
4,707
60
4,839
69.77
71.11
47.7
11.1
11
5.1
25.1
171
98.5
1084
72.8
2.5
5.6
-0.8
2.7
6.7
4.4
3.4
4.4
1.0
4.8
3.5
0.4
-0.9
-0.5
-749
4,032
168
3,451
69.16
70.32
47.8
12.3
10.2
4.8
26.9
233
99.7
934
72.9
4.4
-0.9
7.7
-1.7
-4.0
-9.3
0.6
-1.6
-0.5
5.6
0.4
1.4
2.8
6.2
-308
-358
-94
-760
226.7
201
100.2
99.8
1123.2 1030.2
72.5
72.9
1.7
-0.3
-7.5
18.6
16.3
8.7
4.1
0.6
3.0
13.1
4.1
1.5
-3.2
6.7
2,454
1,703
1,195
5,352
-0.8
5.8
-1.8
9.1
-13.3
9.9
1.5
-2.1
2.0
7.3
1.4
-3.0
5.2
-4.5
1,545
-958
11
598
Source: Company, MOFSL
21 May 2019
11
 Motilal Oswal Financial Services
Tech Mahindra
Financials and valuations
Key Assumptions
Y/E March
INR/USD Rate
Revenues (USD m)
Total Headcount
Net Addition
Per Capita Productivity (USD)
Utilization incl. Trainees (%)
IT Services (%)
2014
60.8
3,098
89,441
6,332
34,638
73.1
90.3
2015
61.4
3,664
1,03,281
13,840
35,471
69.9
91.7
2016
65.6
4,037
1,05,432
2,151
38,294
74.0
92.6
2017
67.0
4,351
1,17,693
12,261
36,971
73.4
93.1
2018
64.5
4,771
1,12,807
-4,886
42,291
80.1
92.8
2019
69.9
4,971
1,21,082
8,275
41,052
80.0
91.9
2020E
70.0
5,319
1,30,664
9,582
40,708
85.1
91.2
2021E
71.0
5,777
1,43,982
13,318
40,123
84.8
91.3
Income Statement
Y/E March
Sales
Change (%)
Employee Cost
Other Expenses
Total Expenses
EBITDA
% of Net Sales
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT
Minority Interest & EO items
PAT before EO
Change (%)
Effect of restructuring fees
PAT after RF before EO
Change (%)
2014
1,88,313
31.4
1,17,001
29,476
1,46,477
41,836
22.2
5,221
673
1,129
37,071
9,790
26.4
27,281
336
26,945
37.8
-1,117
25,828
41.8
2015
2,24,779
19.4
1,50,342
32,901
1,83,243
41,536
18.5
6,079
689
1,006
35,774
9,472
26.5
26,302
310
25,992
-3.5
0
25,992
0.6
2016
2,64,941
17.9
1,83,226
38,289
2,21,515
43,426
16.4
7,620
961
5,322
40,167
8,600
21.4
31,567
412
31,155
19.9
0
31,155
19.9
2017
2,91,408
10.0
2,05,661
43,904
2,49,565
41,843
14.4
9,781
1,286
6,836
37,612
9,785
26.0
27,827
357
27,470
-11.8
0
27,470
-11.8
2018
3,07,730
5.6
2,15,299
45,270
2,60,569
47,161
15.3
10,849
1,624
14,091
48,779
10,925
22.4
37,854
-136
37,990
38.3
0
37,990
38.3
2019
3,47,421
12.9
2,33,590
50,463
2,84,053
63,368
18.2
11,292
1,332
5,342
56,086
12,544
22.4
43,542
567
42,975
13.1
0
42,975
13.1
2020E
3,72,337
7.2
2,52,649
52,290
3,04,939
67,399
18.1
11,724
978
8,019
62,716
14,738
23.5
47,978
460
47,518
10.6
0
47,518
10.6
(INR M)
2021E
4,10,171
10.2
2,78,439
56,368
3,34,807
75,364
18.4
12,206
1,119
9,316
71,356
17,125
24.0
54,230
459
53,771
13.2
0
53,771
13.2
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Loans
Amount pending invest.
Capital Employed
Assets
CWIP
Investments
Long term loans and adv
Deferred Tax Assets
Other non-current assets
Curr. Assets
Debtors
Cash & Bank Balance
Loans & Advances
Current Investments
Other Current Assets
Current Liab. & Prov
Net Current Assets
Application of Funds
E: MOFSL Estimates
2014
2,335
89,469
91,804
1,453
8,420
12,304
1,13,981
28,606
0
12,194
9,137
3,830
157
1,05,472
43,486
33,202
14,544
2,525
11,715
45,415
60,057
1,13,981
2015
4,804
1,17,682
1,22,486
1,604
11,287
12,304
1,47,681
40,329
5,677
12,987
12,755
3,901
306
1,22,526
52,059
24,049
18,728
8,041
19,649
50,800
71,726
1,47,680
2016
4,839
1,38,824
1,43,663
2,034
15,564
12,304
1,73,565
43,446
6,294
13,244
16,766
5,575
294
1,49,451
57,705
12,056
17,084
39,772
22,834
61,505
87,946
1,73,565
2017
4,388
1,59,984
1,64,372
4,641
23,761
12,304
2,05,078
63,590
3,729
3,319
9
2,674
24,079
1,63,265
53,377
20,013
26,122
33,820
29,933
55,587
1,07,678
2,05,078
2018
4,417
1,84,011
1,88,428
5,091
28,931
12,304
2,34,754
74,318
2,399
14,364
52
5,766
26,403
1,81,070
64,979
19,661
21,123
45,231
30,076
69,618
1,11,452
2,34,754
2019
4,437
1,98,407
2,02,844
4,777
23,193
12,304
2,43,118
68,904
2,763
14,076
43
6,091
26,934
2,15,658
69,586
20,427
29,930
65,899
29,816
91,351
1,24,307
2,43,118
2020E
4,379
2,03,907
2,08,286
4,777
23,101
12,304
2,48,469
71,180
2,763
17,576
43
6,091
26,934
2,13,482
79,416
17,612
32,522
46,119
37,813
89,600
1,23,882
2,48,469
(INR M)
2021E
4,379
2,32,159
2,36,538
4,777
23,009
12,304
2,76,628
74,974
2,763
21,076
43
6,091
26,934
2,51,684
88,221
39,294
36,127
46,119
41,922
1,06,936
1,44,747
2,76,628
21 May 2019
12
 Motilal Oswal Financial Services
Tech Mahindra
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Diluted 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)
Leverage Ratio
Debt/Equity Ratio(x)
2014
31.6
28.7
38.2
112.3
5.0
17.4
26.9
20.2
14.2
3.2
6.9
0.6
36.4
26.3
46.5
75
7.0
0.1
2015
30.2
29.6
36.1
142.2
6.0
20.3
26.1
21.4
15.4
2.8
5.4
0.8
24.5
20.5
30.0
78
6.0
0.1
2016
35.9
35.1
43.6
165.6
12.0
34.2
22.1
17.7
15.2
2.5
4.7
1.6
23.4
20.1
22.8
76
5.5
0.1
2017
31.4
32.0
41.9
187.9
9.0
28.2
24.2
18.5
16.2
2.3
4.1
1.2
18.4
15.2
14.8
70
5.0
0.1
2018
43.0
42.7
54.8
213.4
14.0
32.8
18.1
14.1
14.4
2.2
3.6
1.8
21.5
17.8
15.0
70
4.3
0.2
2019
48.5
48.2
60.3
228.7
14.0
29.0
16.0
12.8
10.6
1.9
3.4
1.8
22.0
18.7
20.0
71
4.7
0.1
2020E
54.9
54.0
67.3
240.4
22.0
40.7
14.3
11.5
9.8
1.8
3.2
2.8
23.1
19.8
20.5
73
5.1
0.1
2021E
62.1
61.1
75.0
273.1
25.0
40.9
12.6
10.3
8.4
1.5
2.8
3.2
24.2
21.0
22.6
75
5.4
0.1
Cash Flow Statement
Y/E March
CF from Operations
Change in Working Capital
Other adjustments
Net Operating CF
Net Purchase of FA
Free Cash Flow
Net Purchase of Invest.
Net Cash from Invest.
Inc./(Dec) in Equity
Proceeds from LTB/STB
Dividend Payments
Cash Flow from Fin.
Net Cash Flow
Opening Cash Balance
Add: Net Cash
Closing Cash Balance
E: MOFSL Estimates
2014
33,935
-12,302
21,634
-7,854
13,780
-8,539
-16,393
19
-1,305
-5,381
-6,668
-1,427
34,629
-1,427
33,202
2015
32,040
-8,874
23,167
-21,365
1,802
-9,050
-30,415
2,469
2,396
-6,771
-1,905
-9,154
33,202
-9,154
24,048
2016
34,439
5,456
39,895
-45,439
-5,544
10,611
-34,828
35
-3,469
-13,626
-17,060
-11,993
24,048
-11,993
12,056
2017
32,617
-17,243
15,910
31,284
-9,694
21,590
5,293
-4,401
-451
-9,196
-9,278
-18,925
7,958
12,056
7,958
20,013
2018
58,631
-7,832
-14,860
35,939
-10,166
25,773
-23,431
-33,597
251
6,493
-9,438
-2,694
-352
20,013
-352
19,661
2019
71,506
-10,574
-16,490
44,442
-8,046
36,396
-13,118
-21,164
359
-7,964
-14,907
-22,512
766
19,661
766
20,427
2020E
52,200
-22,169
9,999
40,030
-12,000
28,030
-7,444
-19,444
-58
-886
-22,458
-23,401
-2,815
20,427
-2,815
17,613
(INR M)
2021E
57,780
816
58,596
-12,500
46,096
3,632
-8,868
0
-1,027
-27,020
-28,047
21,682
17,613
21,682
39,294
21 May 2019
13
 Motilal Oswal Financial Services
Tech Mahindra
NOTES
21 May 2019
14
 Motilal Oswal Financial Services
Tech Mahindra
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOFSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
21 May 2019
15
 Motilal Oswal Financial Services
Tech Mahindra
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOFSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
21 May 2019
16