will government's massive surge in investment ... - Myiris.com

Apr-Jun 2013 Earnings Preview
Polaris Financial Technology
Rating
Accumulate
Price (Rs) 112
Target Price (Rs) 135
M/Cap (Rs bn) 11.1
Shares o/s (m) 99.4
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 23,083 24,030 25,905
EBITDA 4,242 4,386 4,656
Margin (%) 18.4 18.3 18.0
PAT 1,941 2,232 2,503
EPS (Rs) 19.5 22.4 25.2
Growth (%) (11.9) 15.0 12.1
RoE (%) 15.2 15.6 15.5
PE (x) 5.7 5.0 4.4
P / BV (x) 0.8 0.7 0.6
EV / E (x) 2.0 1.7 1.3
We expect Sourcing and Intellect to grow at 3% and 0.8% QoQ, respectively, whereas
BPO revenue is likely to grow by 0.8% QoQ. We expect margins to expand by 75bps
due to currency depreciation. Also, we expect muted commentary on the deal
pipeline for Intellect and cautious tone on the overall demand environment due to
high exposure to BFSI vertical.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q4
FY13
QoQ gr.
(%)
Q1
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 5,856 5,547 5.6 5,816 24,030 23,083 4.1
EBITDA 1,025 929 10.3 1,105 4,386 4,242 3.4
Margin (%) 17.5 16.7 75 bps 19.0 18.3 18.4 (13)bps
Reported PAT 507 438 15.6 609 2,232 1,941 15.0
PAT (Excl. Ex Items) 507 438 15.6 609 2,232 1,941 15.0
Operating Metrics
FT Sourcing (US$ m) 82 80 3.0 82 350 324 8.0
FT Intellect (US$ m) 21.8 21.6 0.8 24.5 89.5 97.3 (8.0)
BPO (US$ m) 1.2 1.2 0.8 0.9 5.7 4.4 29.7
SW. Devp. (% of s ales) 64.0 64.4 (38)bps 62.9 63.6 63.1 46 bps
SG&A (% of sales ) 12.0 12.0 4bps 12.2 12.0 12.1 (8)bps
Persistent Systems
Rating
Accumulate
Price (Rs) 497
Target Price (Rs) 550
M/Cap (Rs bn) 19.9
Shares o/s (m) 40.0
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 12,945 14,699 16,976
EBITDA 3,352 3,766 4,113
Margin (%) 25.9 25.6 24.2
PAT 1,876 2,180 2,434
EPS (Rs) 46.9 54.5 60.8
Growth (%) 32.3 16.2 11.6
RoE (%) 20.2 19.7 18.9
PE (x) 10.6 9.1 8.2
P / BV (x) 2.0 1.7 1.4
EV / E (x) 6.0 4.9 4.3
We expect Persistent Systems to grow by 1% QoQ in USD terms. We expect margin
decline of 207bps due to visa cost and wage hike. We expect positive commentary
on deal pipeline for organic and inorganic IP-led growth. The management
commentary would hint towards an improving demand scenario in H2FY14.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q4
FY13
QoQ gr.
(%)
Q1
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 3,513 3,340 5.2 3,007 14,699 12,945 13.5
EBITDA 801 831 (3.6) 807 3,766 3,352 12.4
Margin (%) 22.8 24.9 (207)bps 26.8 25.6 25.9 (27)bps
Reported PAT 483 519 (7.0) 416 2,180 1,876 16.2
PAT (Excl. Ex Items) 483 519 (7.0) 416 2,180 1,876 16.2
Operating Metrics
Volume (persons month) 10,458 10,303 1.5 10,112 46,529 41,176 13.0
Realization (US$ /
person month)
3,750 3,769 (0.5) 3,345 3,734 3,686 1.3
Revenue (US$ m) 62.7 62.1 1.0 54.9 272.2 237.8 14.5
SW. Devp. (% of s ales) 72.0 71.3 74 bps 66.9 69.0 68.7 38 bps
SG&A (% of sales) 5.2 3.9 133 bps 6.3 5.3 5.4 (11)bps
July 8, 2013 122