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Apr-Jun 2013 Earnings Preview
CMC
Rating
Accumulate
Price (Rs) 1,303
Target Price (Rs) 1,430
M/Cap (Rs bn) 39.5
Shares o/s (m) 30.3
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 19,279 23,107 26,820
EBITDA 3,168 3,891 4,605
Margin (%) 16.4 16.8 17.2
PAT 2,302 3,022 3,450
EPS (Rs) 76.0 99.7 113.9
Growth (%) 51.7 31.3 14.2
RoE (%) 26.8 28.2 25.6
PE (x) 17.1 13.1 11.4
P / BV (x) 4.2 3.3 2.6
EV / E (x) 12.2 10.0 8.3
We expect revenue growth (in USD terms) of 0.8% QoQ. Higher subcontracting
expense and lower offshoring are likely to erode the currency gain at the margins.
Due to forex and asset translation loss, we expect PAT to grow by 10% QoQ. We
expect management guidance on the onset of offshoring, since onsite has gone up
~20 percentage point over the last eight quarters.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q4
FY13
QoQ gr.
(%)
Q1
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 5,449 5,240 4.0 4,523 23,107 19,279 19.9
EBITDA 872 818 6.6 752 3,891 3,168 22.8
Margin (%) 16.0 15.6 39 bps 16.6 16.8 16.4 41 bps
Reported PAT 675 613 10.0 584 3,022 2,302 31.3
PAT (Excl. Ex Items) 675 613 10.0 584 3,022 2,302 31.3
Operating Metrics
Revenue (US$ mn) 97.5 96.7 0.8 83.0 427.9 353.0 21.2
Rs/US$ 55.9 54.2 3.1 54.5 54.0 54.6 (1.1)
Gross Margin 38.0 45.8 (777)bps 37.6 37.7 37.7 2bps
Subcontracting Cost (as
% of Revenue)
35.0 29.6 535 bps
33.9 35.3 35.3 (1)bps
eClerx Services
Rating
Reduce
Price (Rs) 743
Target Price (Rs) 630
M/Cap (Rs bn) 21.6
Shares o/s (m) 29.1
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 6,605 7,598 8,581
EBITDA 2,568 2,801 3,029
Margin (%) 38.9 36.9 35.3
PAT 1,716 2,078 2,216
EPS (Rs) 59.1 71.5 76.3
Growth (%) 7.4 21.1 6.6
RoE (%) 44.5 43.3 37.9
PE (x) 12.6 10.4 9.7
P / BV (x) 5.0 4.1 3.4
EV / E (x) 7.5 6.5 5.7
We expect a strong volume growth of 4% QoQ for Q1FY14, resulting in USD term
growth of 3.5% QoQ. However, we expect realizations to stay flattish QoQ. We
anticipate margin decline due to the wage hike. Forex loss and revaluation of
financial asset would result in a decline in PAT.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q4
FY13
QoQ gr.
(%)
Q1
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 1,865 1,743 7.0 1,537 7,598 6,605 15.0
EBITDA 718 687 4.6 612 2,801 2,568 9.1
Margin (%) 38.5 39.4 (88)bps 39.8 36.9 38.9 (201)bps
Reported PAT 565 482 17.2 493 2,078 1,716 21.1
PAT (Excl. Ex Items) 565 482 17.2 493 2,078 1,716 21.1
Operating Metrics
Volume (persons month) 12,387 11,911 4.0 10,904 9,856 45,826 (78.5)
Utilization (%) 70.5 69.0 150 bps 68.0 75.0 74.0 100 bps
Re/$ Rate 55.8 54.0 3.4 54.7 54.0 54.4 (0.7)
Per. Exp. (as % of sales ) 45.0 45.2 (17)bps 42.4 46.8 44.7 206 bps
Revenue (US$ m) 33.4 32.3 3.5 28.1 140.7 121.5 15.8
July 8, 2013 117