12 January 2015
Update | Sector: Technology
Tech Mahindra
BSE Sensex
27,458
S&P CNX
8,285
CMP: INR2,680
TP: INR3,100 (+16%)
Buy
Acquires Sofgen holdings Limited (SOFGEN)
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Access to BFSI customer base key rationale; EPS-neutral
TECHM IN
240.0
2,741/1,678
6/21/14
643.2
10.3
Acquires SOFGEN - Implementer of banking and wealth management
software
TECHM signed an agreement to acquire100% stake in Sofgen holdings Ltd, a
niche consulting and services company specializing in Private Wealth,
commercial and retail banking solutions. The consideration is USD30m, one-
third of which is in the form of earn-outs to be paid after two years.
Financial Snapshot (INR b)
Y/E Mar
2015E 2016E 2017E
229.0 293.4 338.2
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
RoE (%)
RoCE (%)
Payout (%)
P/E (x)
EV/EBITDA (x)
44.3
30.3
13.2
28.6
29.8
16.1
19.6
12.4
57.2
38.3
26.2
28.4
31.8
17.4
15.5
9.4
65.2
45.0
17.6
26.9
30.3
17.2
13.2
7.8
Acquisition adds ~USD45m to FY16 revenues, single digit margin
Sofgen’s expected revenue this year is USD45m and has EBITDA margin in high
single digits. The company has grown its top line in mid single digits in the past
couple of years. Sofgen revenues comprise of Temenos implementations (60%),
Avaloq implementations (30%) and a tax compliance reporting platform (10%).
Majority of these implementations are in Middle East, Africa and Europe.
137.0 172.9 203.4
Rationale: Access to tier-I Banking and wealth management customers
The key rationale of the acquisition lies in the customer access facilitated to
TECHM. Sofgen’s services have been limited to platform migration and
implementation of the solution at the customer site. The acquisition enhances
TECHM’s capability to offer more end to end services in the BFSI vertical which
encompasses both run-the-business and change the business propositions like
Digital service transformations, IMS.
Shareholding pattern (%)
As on
Dec-14 Sep-14 Dec-13
Promoter
36.0
36.2
36.5
DII
10.6
10.8
15.1
FII
39.6
39.1
32.6
Others
13.7
14.0
15.8
FII Includes depository receipts
Stock Performance (1-year)
Tech Mahindra
Sensex - Rebased
Our take: Long sought access to BFSI customers, but not yet in the US
market
While the acquisition has negligible impact on TECHM’s financials, its lends
access to some large BFSI accounts, something that the company has been
seeking for long. However, we see the transaction as only a small step towards
the larger goal of scaling BFSI segment – given that it still does not open up the
lucrative scale of US and large Europen banking clients for TECHM directly. It
remains to be seen how much scale TECHM can derive from providing
additional services to banking and wealth management customers in other
regions.
2,800
2,500
2,200
1,900
1,600
Valuation and view
The acquisition has 1% impact on top-line and negligible impact on TECHM’s
earnings. We expect TECHM to grow its USD revenue at a CAGR of 20.7% over
FY15-17 and EPS at a CAGR of 21.9% during this period. At 15.5x FY16E EPS, the
stock is above its 5-year average, justifiably given the improvement in revenue
growth and margins, following merger with Satyam and increasing irrelevance
of BT. Our Target Price of INR3,100 discounts FY17E EPS by 15x, following
expectation of sustained above-industry growth over the medium term.
Maintain
Buy.
Ashish Chopra
(Ashish.Chopra@MotilalOswal.com); +91 22 3982 5424
Siddharth Vora
(Siddharth.Vora@MotilalOswal.com); +91 22 3982 5585
Investors are advised to refer through disclosures made at the end of the Research Report.

Tech Mahindra
EVENT: Acquires Sofgen holdings Ltd to expand its Core Banking Expertise
TECHM signed a definitive agreement to acquire100% stake in Sofgen holdings
Ltd, a niche consulting and services company specializing in Private Wealth,
commercial and retail banking solutions
Financial closure is expected in 4QFY15 post the receipt of regulatory approvals.
Sofgen will continue to operate as an independent entity after the acquisition
CONSIDERATION: ~USD30m EV @ EV/EBITDA of 7x, 0.7x Sales
TECHM will acquire 100% of Sofgen for a sub-USD30m total payout, 2/3
rd
of the
consideration will be paid upfront and 1/3
rd
is based on the earn outs over the
next two years.
Earn outs will be computed on the base of revenue and EBITDA growth of the
company.
Currently Sofgen is expected to do USD45m in revenues with high single digit
EBITDA margins.
Sofgen has USD4-5m of debt on its balance sheet, included in the consideration.
Rest of the consideration will go to the existing shareholders which is a mix of
senior management and some private investors.
Given one-third of the consideration is in the form of earn-outs over next two
years, Sofgen will continue to operate as an independent entity.
ABOUT SOFGEN: ~USD45m CY14E revenues, high single digit EBITDA margin
The company has 450+ employees with 20+ Tier1 client relationships
Sofgen revenues comprise of Temenos implementations (60%), Avaloq
implementations (30%) and a tax compliance reporting platform (10%).
Temenos has been the largest selling core banking solution worldwide in the
retail and commercial banking space. Sofgen has been a Temenos partner for
years.
Sofgen has the second largest pool of Avaloq consultants in the world, which is
one of the leading wealth management platforms used by Tier-I wealth
managers worldwide.
The tax compliance platform provided by Sofgen is used by a number of wealth
managers in Europe to provide tax compliance reporting to individual account
holders, primarily as a service which is a regulatory mandate in many parts of
Europe.
Sofgen’s client base is spread across Europe, Asia and APAC; which includes
number of leading commercial banks, wealth managers and global franchises.
Top 5 clients contribute 30% of revenues and Top 10 clients contribute 50% of
revenues
12 January 2015
2

Tech Mahindra
Exhibit 1: Temenos implementation drives majority revenue for Sofgen
Revenue break-up (%)
Tax compliance
IP, 10
Avaloq impl., 30
Temenos impl., 60
Source: Company, MOSL
RATIONALE: Customer access and address more areas of Sofgen customers’
spend
The key rationale of the acquisition lies in the customer access facilitated to
TECHM. Sofgen’s services have been limited to platform migration and
implementation of the solution at the customer site. The acquisition enhances
TECHM’s capability to offer more end to end services in the BFSI vertical which
encompasses both run-the-business and change the business propositions like
Digital service transformations, IMS.
Sofgen has various IPs, tools and accelerators which will help improve TECHMs
cycle time and reduce cost of implementations. Consultants (400+) of Sofgen
come with a higher degree of core banking knowledge which TECHM will need
time and experience to develop the capability organically.
TECHMs scale provides them to bid for larger deal sizes, and address 80-90% of
acquired client relationships’ client spend, compared to ~10% addressable by
Sofgen.
OUR TAKE: Long sought access to BFSI customers, but not yet in the US
market
While the acquisition has negligible impact on TECHM’s financials, its lends
access to some large BFSI accounts, something that the company has been
seeking for long.
However, we see the transaction as only a small step towards the larger goal of
scaling BFSI segment – given that it still does not open up the lucrative scale of
US and large Europen banking clients for TECHM directly.
It remains to be seen how much scale can TECHM derive from providing
additional services to banking and wealth management customers in other
regions.
CHANGE IN ESTIMATES: Marginal EPS dilution in FY15, accretion in FY16
Our revenue estimate for FY16 is up by 1pp, but our earnings estimate is largely
unchanged, factoring the financials of Sofgen and the consideration paid by TECHM.
Factoring high single digit EBITDA margins at Sofgen, the impact on the merged
entity is only 10bp.
12 January 2015
3

Tech Mahindra
Exhibit 2: Change in estimates
Revised
FY15E FY16E
INR/USD
USD Revenue - m
USD rev Gr.(%)
61.2
3,743
20.8
62.0
4,733
26.5
19.5
17.2
172.9
FY17E
62.0
5,454
15.2
19.3
17.1
203.4
Earlier
FY15E FY16E
61.2
3,743
20.8
19.5
16.8
137.0
62.0
4,686
25.2
19.6
17.3
172.6
FY17E
62.0
5,426
15.8
19.5
17.3
203.3
Change
FY15E
FY16E
0.0%
0.0%
0bp
0.0%
1.0%
125bp
FY17E
0.0%
0.5%
-56bp
EBIDTA Margin (%) 19.4
EBIT Margin (%)
16.7
EPS - INR
137.0
-10bp
-10bp
-22bp
-10bp
-11bp
-25bp
0.0%
0.2%
0.0%
Source: Company, MOSL
Valuation and view: Expect continued growth leadership with stable
margins
Please refer to our detailed report
on acquisition of LCC
Prospects of revenue growth at the top-end of the industry band remain
sanguine at TECHM due to multiple reasons:
1. Success in large deal wins is an encouraging indicator of TECHM’s
improving competitive prowess, even in the Enterprise segment. With
three large deal wins in Manufacturing beginning to come through,
prowess in Telecom will likely be compounded with Enterprise too,
keeping growth outlook sanguine.
2. Also, its expertise in the Telecom vertical has thus far overshadowed the
structural concerns in the client industry, as it continues to increase its
share within its top accounts.
3. Network management services have potentially expanded the
addressable market for TECHM, with directly addressable spend
standing at ~USD40b. Additionally, opportunity going forward comes
from increased adoption of offshore services by Continental Europe.
4. 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)
While the
integration of LCC
to TECHM’s numbers will dent the margins in the
near term (120bp impact on current base of 20%) along with wage hikes (150bp
impact), we expect the company to operate its margins in a band of 19-21%,
especially as the cost efficiencies at LCC help improve the margins from 8%
currently to 12%. The acquisition of Sofgen is only a small step towards the
company’s much coveted scale in BFSI, but access to tier-I accounts in emerging
economies can help drive some scale.
While cash flows generation has been a potential concern, TECHM’s
OCF/EBITDA should average ~55%, close to TCS’ 60%. Also, TECHM’s active
inorganic foray has ensured relatively better capital allocation v/s peers, and its
track record of successfully integrating companies keeps prospects of profitably
scaling into the big league sanguine.
We expect TECHM to grow its USD revenue at a CAGR of 20.7% over FY15-17
and EPS at a CAGR of 21.9% during this period. At 15.5x FY16E EPS, the stock is
above its 5-year average, justifiably given the improvement in revenue growth
and margins, following merger with Satyam and increasing irrelevance of BT.
Our Target Price of INR3,100 discounts FY17E EPS by 15x, following expectation
of sustained above-industry growth over the medium term. Maintain Buy.
12 January 2015
4

Tech Mahindra
Exhibit 3: TECHM 1-year forward PE chart
100
80
60
40
20
0
16.1
3.8
11.2
15.8
PE (x)
Median(x)
Peak(x)
Min(x)
78.8
Avg(x)
Exhibit 4: TECHM 1-year forward PB chart
20.0
15.0
10.0
5.0
0.0
1.2
4.3
3.0
3.9
PB (x)
Median(x)
Peak(x)
Min(x)
17.6
Avg(x)
Source: Company, MOSL
Source: Company, MOSL
Exhibit 5: Comparative valuation
Company Mkt capRating
(USD b)
TCS
78.7 Neutral
Infosys
37.9 Buy
Wipro
21.8 Neutral
HCL Tech
17.4 Buy
TechM
10.0 Buy
Cognizant 32.9 Not Rated
Tier-I Agg 198.9
TP Upside
(INR) (%)
2750
9.5
2500 20.6
625
12.9
2000 29.4
3100 19.4
EPS (INR)
FY15E FY16E FY17E
110.8 129.9 151.3
108.7 120.1 137.9
34.5
39.3
44.6
105.5 114.3 127.8
137.0 172.9 203.4
2.3
2.8
3.3
FY15E
22.7
19.1
16.0
14.7
19.5
23.1
19.2
P/E (x)
FY16E
19.3
17.3
14.1
13.5
15.5
19.4
16.5
FY17E
16.6
15.0
12.4
12.1
13.2
16.1
14.2
FY15E
35.8
26.2
23.1
32.7
28.8
20.6
27.9
RoE (%)
FY16E
34.4
24.8
22.6
29.4
28.3
19.8
26.6
FY14-17E CAGR (%)
FY17E USD rev. EPS
32.8
15.6
15.7
24.6
10.4
14.0
21.9
10.6
12.1
26.6
13.4
12.3
26.8
20.5
18.9
19.6
17.3
18.4
25.4
Source: MOSL, Company
12 January 2015
5

Tech Mahindra
Story in charts
Exhibit 6: Telecom prowess reflected in vertical mix
Retail,
Travel,
Logistics, 6
BFSI, 10
Tech,
Media, Ent,
8
Manufactur
ing, 18
Source: Company, MOSL
Telecom, 5
2
5.4
985
FY09
(0.9)
977
FY10
8.9
1063
FY11
8.8
1156
FY12
2633
FY13
17.7
3098
FY14
20.8
Vertical mix (%)
Others, 6
Exhibit 7: Scale and diversity lent by Satyam acquisition
Revenue (USD m)
YoY Growth (%)
127.7
3743
FY15E
Source: Company, MOSL
Exhibit 8: Active on the acquisition front – building scale and competencies
STANDALONE TECHM
Mahindra Satyam
Hutchison Global Services
Comviva
MAHINDRA SATYAM
Complex IT (Brazil)
COMBINED ENTITY
Mahindra Engineering Services
BASF Business Service Consult
Fix Stream
Lightbridge Communications Corp.
Sofgen holdings Ltd
Time
Apr-09
Sep-12
Sep-12
Feb-13
Nov-13
Feb-14
Apr-14
Nov-14
Jan-15
Valuation
(USD m)
1,133
67
95
45
121
NA
10
240
~30
Revenue
(USD m)
481 (FY11)
170
70
45
42
NA
NA
430
45
Employees
48,000
11,500
1,500
500
1,300
60
NA
5,700
450
Source: Company, MOSL
Exhibit 9: Strong execution reflected in much
improved efficiency
24.5
20.4
16.7
EBITDA margin (%)
21.4
22.2
19.4
Exhibit 10: Incremental Deal TCV keep
growth outlook sanguine
500
Deal TCV (USD m)
190
220
270
250
270
FY10
FY11
FY12
FY13
FY14
FY15E
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
Source: Company, MOSL
Source: Company, MOSL
12 January 2015
6

Tech Mahindra
Exhibit 11: 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 Utilziation (excluding trainees) (%)
Receivable Days (DSO)-Including Unbilled
Borrowings (USD m)
Cash and Cash Equivalent (USD m)
Capital Expenditure (USD m)
47.6
52.4
48.2
51.8
48.3
51.7
48.4
51.6
51.0
49.0
51.0
49.0
52.0
48.0
53.0
47.0
54.0
46.0
55.0
45.0
1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15
46
33
21
45
34
21
43
35
22
42
33
25
45
32
23
44
33
23
47
31
22
45
31
24
47
31
22
49
31
20
44
19
13
11
6
7
45
19
13
11
7
5
46
18
12
11
7
6
48
19
12
10
6
5
48
19
12
9
6
6
47
19
12
9
7
6
47
19
11
10
7
6
49
18
11
10
6
6
50
18.5
9.5
10
6
6
52
18
8
10
6
6
484
96
475
95
475
92
516
94
567
97
576
95
605
92
629
88
632
99
649
97
188
73
39
21
7
200
74
43
21
9
206
77
48
22
9
205
70
42
24
9
215
74
46
25
10
223
77
48
26
10
239
75
47
25
11
239
75
52
27
11
242
80
51
29
11
245
86
50
30
12
17
40
10
12
15
41
10
13
14
39
11
12
13
37
13
11
12
37
12
11
36
12
13
37
12
12
38
13
12
37
13
12
40
11
12
52,416
18,229
5,647
76,292
17
75
80
98
164.4
572.7
18.8
52,375
28,611
5,920
86,906
16
74
78
96
201.7
628.1
16.2
53,072
26,379
6,195
85,646
16
76
78
98
199.2
676
15.5
52,126
24,699
6,284
83,109
16
77
79
96
213.6
673.9
41.9
53,337
23,269
6,457
83,063
14
76
78
97
125.7
615.4
41.2
55,432
23,225
6,577
85,234
14
75
77
102
53.5
522.7
23.8
57,601
23,213
6,585
87,399
15
75
77
100
55.3
559.7
21.2
60,997
21,830
6,614
89,441
15
74
78
64,095
21,936
6,698
92,729
16
72
75
66,175
22,433
6,701
95,309
18
73
76
96
102
102
60.6
14.3
10.2
600.6
609.7
556
44.6
43.6
38.5
Source: Company, MOSL
12 January 2015
7

Tech Mahindra
Exhibit 12: Operating Metrics
1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15
Rupee USD Rate
Period closing rate
Period average Rate
Proportion of Revenues From 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
55.61
54.81
52.86
54.69
55
54.36
54.29
53.96
59.39
56.57
62.61
62.91
61.81
61.92
59.92
61.46
60.18
59.87
61.5
60.94
51
22
6
8
13
50
22
6
8
14
47
24
7
9
14
47
23
7
8
14
50
19
8
7
15
48
20
9
7
17
49
18
9
7
17
49
16
10
8
17
50
16
10
7
17
52
16
10
6
16
285.7
84.12
666.5
53.02
278.4
86.25
747.9
54.39
276.6
88.04
910.3
55.64
262.8
89.89
911
56.93
267.9
91.58
1081.6
58.22
244.2
92.4
899.3
58.9
211
94.2
771
59.5
170.5
95.3
783.9
60.6
144.3
97.1
1046.8
61.6
123.3
99.9
1224.2
63
7.1
4.7
4.7
4.7
22.2
-25.2
4.7
7.1
-0.8
-3.3
4.7
4.7
25.7
4.7
8.0
9.2
3.5
-6.0
-11.3
-13.8
3.5
3.7
3.7
3.7
-6.7
3.7
24.5
3.7
2.5
4.7
4.7
4.7
22.1
4.7
4.7
4.4
4.4
-4.3
15.9
4.4
4.4
4.4
8.7
-1.2
4.3
4.3
-10.6
4.3
4.3
5.8
6.5
-10.5
3.7
3.7
3.7
3.7
9.4
2.4
-11.4
5.2
5.2
5.2
5.2
2.4
7.9
4.7
4.7
0.1
7.8
9.7
4.7
1.0
-2.5
17.6
3.5
11.1
0.6
-4.6
3.7
2.4
8.0
4.7
4.7
11.5
-2.0
-0.2
4.4
-0.1
4.3
13.8
4.3
8.3
3.7
-5.0
3.7
9.7
5.2
-4.3
5.2
-7.6
7.3
4.7
-2.2
-0.4
15.2
-3.9
-1.9
22.3
-4.3
3.7
-4.3
1.9
4.7
23.7
7.3
4.4
-3.7
7.1
13.0
4.3
0.9
3.7
3.7
13.8
-11.0
5.2
-41
10,382
273
10,614
697
-2,232
275
-1,260
-946
-1,680
89
-2,537
1,211
-1,430
173
-46
2,095
-44
120
2,171
2,169
-12
8
2,165
3,396
-1,383
29
2,042
3,098
106
84
3,288
2,080
497
3
2,580
Source: Company, MOSL
12 January 2015
8

Tech Mahindra
Financials and valuations
Key Assumptions
Y/E March
INR/USD Rate
Revenues (USD m)
Total Headcount
Net Addition
2012
47.5
2,463
74,116
2013
54.4
2,633
83,109
8,993
2014
60.8
3,098
89,441
6,332
2015E
61.2
3,743
108,032
18,591
2016E
62.0
4,733
124,648
16,616
2017E
62.0
5,454
143,155
18,507
Income Statement
Y/E March
Sales
Change (%)
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 (%)
Extraordinary Items (EO)
PAT after EO
2012
54,897
13.4
45,703
9,194
16.7
1,614
1,413
1,368
7,535
1,438
19.1
6,097
714
10,918
24.2
-1,618
9,299
31.1
679
9,978
2013
143,320
161.1
112,689
30,631
21.4
3,896
922
2,121
26,334
6,479
24.6
19,855
301
19,554
79.1
-1,340
18,214
95.9
0
18,214
2014
188,313
31.4
146,477
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
3,342
29,170
2015E
229,045
21.6
184,715
44,330
19.4
5,999
221
3,485
41,595
11,061
26.6
30,534
209
30,325
12.5
0
30,325
17.4
0
30,325
(INR Million)
2016E
2017E
293,420
28.1
236,221
57,199
19.5
6,874
403
2,083
52,006
13,521
26.0
38,484
200
38,284
26.2
0
38,284
26.2
0
38,284
338,166
15.2
272,983
65,183
19.3
7,378
276
3,599
61,129
15,893
26.0
45,235
200
45,035
17.6
0
45,035
17.6
0
45,035
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Loans
Amount pending invest.
Capital Employed
Fixed Assets
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: MOSL Estimates
12 January 2015
2012
1,275
42,032
43,307
0
11,266
54,573
6,868
35,876
998
20,437
13,172
2,418
4,845
2
11,235
9,202
54,573
2013
2,316
66,214
68,530
1,349
14,702
12,304
96,885
22,318
12,429
7,433
3,477
219
89,634
33,688
34,629
12,925
1,745
6,647
41,220
48,414
96,885
2014
2,335
89,469
91,804
1,453
8,420
12,304
113,981
28,606
12,194
9,137
3,830
157
105,472
43,486
33,202
14,544
2,525
11,715
45,415
60,057
113,981
2015E
2,781
117,177
119,958
1,546
9,511
12,304
143,319
41,039
12,194
9,256
4,042
115
118,693
58,092
22,266
17,030
6,731
14,574
46,271
72,421
143,319
(INR Million)
2016E
2017E
2,781
147,177
149,958
1,546
9,296
12,304
173,104
45,095
12,194
9,256
4,042
115
147,341
71,375
35,360
17,030
6,731
16,845
49,190
98,151
173,104
2,781
182,548
185,329
1,546
8,771
12,304
207,950
47,717
12,194
9,256
4,042
115
185,599
82,146
60,313
17,030
6,731
19,379
55,225
130,375
207,950
9

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
Turnover Ratios
Debtors (Days)
Fixed Asset Turnover (x)
Leverage Ratio
Debt/Equity Ratio(x)
2012
72.9
70.4
82.6
339.7
4.0
5.7
38.1
32.4
37.5
6.3
7.9
0.1
26.0
14.3
85
3.9
0.3
2013
95.2
92.8
110.7
320.0
5.0
5.9
31.5
24.2
17.2
3.7
8.1
0.2
32.6
35.3
60
5.8
0.2
2014
124.0
120.6
145.0
440.7
20.0
16.6
22.2
18.5
12.5
2.8
6.1
0.7
36.4
34.7
75
7.0
0.1
2015E
141.7
136.9
164.0
560.5
22.0
16.1
19.6
16.3
12.4
2.4
4.8
0.8
28.6
29.8
81
6.2
0.1
2016E
178.9
172.9
203.9
700.7
30.0
17.4
15.5
13.1
9.4
1.8
3.8
1.1
28.4
31.8
81
6.2
0.1
2017E
210.4
203.4
236.7
865.9
35.0
17.2
13.2
11.3
7.8
1.5
3.1
1.3
26.9
30.3
83
6.7
0.0
Cash Flow Statement
Y/E March
CF from Operations
Change in Working Capital
Net Operating CF
Net Purchase of FA
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: MOSL Estimates
2012
3,692
7,778
11,470
-2,836
-6,796
-9,632
-528
-961
-597
-2,086
-248
2,666
-248
2,418
2013
14,259
-7,608
6,651
-3,099
-1,940
-5,039
1,032
-7,036
-750
-6,754
32,211
2,418
32,211
34,629
2014
30,593
-12,302
18,292
-7,854
-5,103
-12,957
19
-1,305
-5,475
-6,762
-1,427
34,629
-1,427
33,202
2015E
33,060
-18,760
14,300
-21,829
3,485
-18,344
446
-1,264
-6,075
-6,892
-10,937
33,202
-10,937
22,265
(INR Million)
2016E 2017E
43,478
-12,635
30,843
-11,360
2,083
-7,917
0
-188
-8,284
-8,472
14,454
22,265
14,454
36,719
49,090
-7,271
41,819
-11,050
3,599
-6,401
0
249
-9,664
-9,415
26,003
36,719
26,003
62,722
12 January 2015
10

Tech Mahindra
NOTES
12 January 2015
11

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Tech Mahindra
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