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

Apr-Jun 2013 Earnings Preview
Tata Consultancy Services
Rating
Accumulate
Price (Rs) 1,507
Target Price (Rs) 1,550
M/Cap (Rs bn) 2,948.8
Shares o/s (m) 1,957.2
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 629,895 726,608 820,663
EBITDA 180,872 212,353 232,221
Margin (%) 28.7 29.2 28.3
PAT 139,414 163,724 181,547
EPS (Rs) 71.2 83.7 92.8
Growth (%) 29.7 17.4 10.9
RoE (%) 37.9 35.5 31.9
PE (x) 21.2 18.0 16.2
P / BV (x) 7.2 5.8 4.7
EV / E (x) 15.9 13.3 11.9
We expect TCS to report 3.7% QoQ volume growth aided by retail, energy & utility
and Manufacturing sector, with no improvement in the pricing front. EBITDA margin
is expected to expanded by 36bps due to wage hike. We expect cross-currency to
have negative impact of 0.7% on growth. The management is likely to stay with its
positive commentary on the demand outlook.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q4
FY13
QoQ gr.
(%)
Q1
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 174,704 164,301 6.3 148,687 726,608 629,895 15.4
EBITDA 50,175 46,599 7.7 43,328 212,353 180,872 17.4
Margin (%) 28.7 28.4 36 bps 29.1 29.2 28.7 51 bps
Reported PAT 37,329 35,695 4.6 32,806 163,724 139,414 17.4
PAT (Excl. Ex Items) 37,329 35,695 4.6 32,806 163,724 139,414 17.4
Operating Metrics
Volume (persons month) 629,390 606,934 3.7 547,096 2,558,737 2,244,506 14.0
Pricing (US$ / Hr) 33.5 33.5 0.0 33.4 34.5 33.8 2.0
Revenue (US$ m) 3,131 3,040 3.0 2,728 13,456 11,568 16.3
SW. Devp. (% of s ales) 54.8 54.8 (5)bps 55.3 54.8 53.9 91 bps
SG&A (% of Sales ) 17.0 17.3 (31)bps 16.0 16.0 17.4 (142)bps
Tech Mahindra
Rating
Accumulate
Price (Rs) 1,046
Target Price (Rs) 1,100
M/Cap (Rs bn) 133.3
Shares o/s (m) 127.5
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 68,731 78,353 85,405
EBITDA 14,243 14,887 15,800
Margin (%) 20.7 19.0 18.5
PAT 12,877 14,887 16,312
EPS (Rs) 101.0 116.7 127.9
Growth (%) 17.6 15.6 9.6
RoE (%) 29.2 28.7 26.8
PE (x) 10.4 9.0 8.2
P / BV (x) 2.8 2.4 2.0
EV / E (x) 9.6 8.9 7.9
Tech Mahindra will not have any inorganic contribution in the quarter. We expect no
major ramp-down on BT (-0.3% QoQ decline) and non-BT account growing at 0.9%
QoQ, hence, resulting in a growth in organic revenue. The margin is likely to
expanded by 37bps for the quarter due to currency depreciation. We expect strong
quarter for Satyam to have a bearing on the bottom-line. We expect a road-map for
integration with Satyam.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q4
FY13
QoQ gr.
(%)
Q1
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 19,835 19,072 4.0 15,434 78,353 68,731 14.0
EBITDA 4,026 3,801 5.9 3,302 14,887 14,243 4.5
Margin (%) 20.3 19.9 37 bps 21.4 19.0 20.7 (172)bps
Reported PAT 3,992 3,773 5.8 3,384 14,887 12,877 15.6
PAT (Excl. Ex Items) 3,992 3,773 5.8 3,384 14,887 12,877 15.6
Operating Metrics
Rev from BT 4,911 4,768 3.0 5,556 19,857 20,902 (5.0)
Rev. from Non BT Clients 14,924 14,304 4.3 9,878 58,496 47,829 22.3
Revenue (US$ mn) 355 353 0.6 281 1,425 1,263 12.8
SW. Devp. (% of s ales) 64.2 63.5 66 bps 62.7 64.2 63.1 108 bps
SG&A (% of sales ) 15.5 16.5 (103)bps 15.9 16.8 16.2 65 bps
July 8, 2013 123