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Apr-Jun 2013 Earnings Preview
MindTree
Rating
Accumulate
Price (Rs) 850
Target Price (Rs) 940
M/Cap (Rs bn) 35.3
Shares o/s (m) 41.5
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 23,618 26,584 29,527
EBITDA 4,864 5,484 5,935
Margin (%) 20.6 20.6 20.1
PAT 3,393 3,889 4,291
EPS (Rs) 81.8 93.7 103.4
Growth (%) 53.6 14.6 10.3
RoE (%) 29.9 26.0 22.8
PE (x) 10.4 9.1 8.2
P / BV (x) 2.7 2.1 1.7
EV / E (x) 7.0 5.7 4.8
We expect MindTree to report USD growth of 3% QoQ, led by a growth in volumes
by 3.5%. We anticipate margin erosion by 99bps due to visa cost and on-boarding of
fresher. We expect PES to be stable and IT services to lead the growth. Moreover, at
the bottom-line, we expect 35% QoQ growth due to forex and asset translation gain.
We expect positive commentary from the management.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q4
FY13
QoQ gr.
(%)
Q1
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 6,518 6,124 6.4 5,630 26,584 23,618 12.6
EBITDA 1,173 1,163 0.9 1,174 5,484 4,864 12.8
Margin (%) 18.0 19.0 (99)bps 20.9 20.6 20.6 4 bps
Reported PAT 1,066 789 35.1 890 3,889 3,393 14.6
PAT (Excl. Ex Items) 1,066 789 35.1 890 3,889 3,393 14.6
Operating Metrics
Volume (persons month) 22,789 22,018 3.5 21,176 95,241 85,803 11.0
Realization (US$ / Hr) 28.8 28.8 0.2 28.1 29.1 28.6 1.8
Revenue (US$ m) 116.4 113.0 3.0 105.5 492.3 435.7 13.0
SW. Devp. (% of s ales) 60.6 61.2 (55)bps 61.1 60.5 60.4 10 bps
SG&A (% of sales ) 21.4 19.9 154 bps 18.0 18.8 19.0 (13)bps
NIIT Technologies
Rating
BUY
Price (Rs) 261
Target Price (Rs) 360
M/Cap (Rs bn) 15.6
Shares o/s (m) 59.6
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 20,213 23,171 26,214
EBITDA 3,296 3,664 3,973
Margin (%) 16.3 15.8 15.2
PAT 2,133 2,459 2,807
EPS (Rs) 35.8 41.2 47.1
Growth (%) 8.2 15.3 14.2
RoE (%) 21.3 21.1 20.8
PE (x) 7.3 6.3 5.5
P / BV (x) 1.4 1.2 1.1
EV / E (x) 4.0 3.5 3.0
We expect NIIT Tech to report rupee term revenue growth of 1.5% QoQ, led by a
growth in volumes by 1%. The quarter is likely to witness margin decline of 156bps
to 14.9% due to wage hike, and GIS revenue weakness. We expect order book to
show strong growth in the quarter. Moreover, we expect a steady performance in
manufacturing and TTSL vertical. The company is likely to show growth at bottomline
as forex and asset translation gain will push the bottom-line growth higher.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q4
FY13
QoQ gr.
(%)
Q1
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 5,453 5,372 1.5 4,696 23,171 20,213 14.6
EBITDA 812 884 (8.1) 751 3,664 3,296 11.1
Margin (%) 14.9 16.5 (156)bps 16.0 15.8 16.3 (50)bps
Reported PAT 605 565 7.1 576 2,459 2,133 15.3
PAT (Excl. Ex Items) 605 565 7.1 576 2,459 2,133 15.3
Operating Metrics
Volume (persons month) 3,244 3,212 1.0 2,958 15,181 13,375 13.5
Utilization 0.8 0.8 (0.3) 0.8 79.0 78.2 1.0
SW. Devp. (% of s ales) 67.0 65.6 136 bps 64.9 65.9 65.1 79 bps
SG&A (% of sales ) 18.1 17.9 1.1 19.1 18.3 18.6 (1.6)
July 8, 2013 121