Tata Consultancy Services

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1 FY13 Annual Report Analysis Tata Consultancy Services Reuters: TCS.BO; Bloomberg: TCS IN Better Working Capital Management Drives Cash Flow Tata Consultancy Services (TCS) was able to convert its strong 25% YoY EBIT growth in FY13 to robust operating cash flow (OCF) growth of 66.5% YoY owing to better working capital management, with debtor days declining. Vertical-wise, retail again drove revenue and profits, while the UK and Latin America drove the geographies. TCS added a gross nearly 70,000 employees in FY13. Average revenue/employee grew 9.4% in rupee terms, but fell 3.4% in US dollar terms. Return on equity (RoE) stood at a healthy 37.9% in FY13 (a 118bps rise). From a related party perspective, TCS had transactions with 35 fellow Tata Group companies apart from Tata Sons. As regards its stock, we retain our Hold rating on it with a target price of Rs1,512, implying a PE of 17.5x FY15E EPS. Better working capital management drives conversion of EBIT growth to OCF: TCS strong 25% EBIT growth in FY13 translated into a robust 66.5% YoY growth in OCF aided by better working capital management, mainly lower debtor and unbilled revenue days as well as higher trade payables, with OCF rising to Rs116.1bn. Retail drives verticals, UK and Latin America the geographies, services broad-based: Vertical-wise, retail drove revenue growth (41% versus 29% total revenue) and profits (a 146bps expansion), while geographically, the UK (44.3%) and Latin America (40.3%) were the growth drivers. From a service line perspective, all services with the exception of asset leverage solutions clocked growth rates of 23-51%, implying broad-based revenue growth. Employee addition: TCS added a gross of nearly 70,000 employees in FY13. Laterals accounted for 33.3% of gross addition. Trailing 12-month (TTM) attrition rate for the year declined to 11.6% from 12.8% in FY12, the second successive year of decline. The employee base stood at 276,169. We expect TCS to add around 50,000 employees (gross) in FY14E. Operating metrics: TCS average revenue/employee stood at Rs2.45mn (US$44,945) in FY13 (9.4% growth in rupee terms,3.4% fall in US dollar terms). Improving revenue productivity is critical for Indian IT firms including TCS, as is the need to add an element of non-linearity to revenue. Costs/employee fell 3.2% in US dollar terms, as TCS was able to keep employee costs under control through scale and bulge mix. As regards return ratios, RoE stood at 37.9% in FY13, a growth of 118bps due to higher asset turnover ratio. Related party transactions: TCS had transactions with 35 Tata Group companies in FY13, apart from holding company Tata Sons, relating to revenue, interest, loans and advances, debtors, creditors, purchase of goods and services, and inter-corporate deposits. In most cases, the pecuniary value of its transactions with these entities is in low single digits with respect to the total. Outlook and Valuation: While TCS has been able to achieve growth considerably above that of the industry, outperforming peers like Infosys and Wipro, we believe its valuation is not attractive enough to acquire the stock at current levels. TCS stock currently trades at a price-to-earnings (PE) multiple of 17x FY15E EPS. We retain our Hold rating on the stock with a target price of Rs1,512, implying a PE of 17.5x FY15E EPS. Y/E March (Rsmn) FY11 FY12 FY13 FY14E FY15E Revenue 373, , , , ,719 YoY EBITDA 111, , , , ,665 EBITDA Adj. PAT 87, , , , ,140 YoY FDEPS (Rs) RoE RoCE P/E (x) EV/EBITDA (x) Source: Company, Nirmal Bang Research 7 June 2013 HOLD Sector: Information Technology CMP: Rs1,472 Target Price: Rs1,512 Upside: 3% Harit Shah harit.shah@nirmalbang.com Key Data Current Shares O/S (mn) 1,957.2 Mkt Cap (Rsbn/US$bn) 2,878.6/ Wk H / L (Rs) 1,598/1,055 Daily Vol. (3M NSE Avg.) 1,492,433 One Year Indexed Stock Performance Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 TATA CONSULTANCY Price Performance 1 M 6 M 1 Yr TCS Nifty Index (0.8) (0.2) 18.5 Source: Bloomberg NSE CNX NIFTY INDEX Please refer to the disclaimer towards the end of the document.

2 Cash flow Strong profit growth, improved working capital management boost OCF TCS posted strong growth in operating profit (EBIT) in FY13 of 25% YoY at Rs180.4bn. This, along with improved working capital management, led OCF to grow at a robust pace of 66.5% YoY at Rs116.1bn. As stated earlier, TCS working capital management improved in FY13 compared with FY12 because of better debtor management. The IT major s debtor days witnessed an improvement from 86 days in FY12 to 82 days in FY13. On the unbilled revenue front, unbilled revenue days rose slightly to 18 from 17 in FY12. Thus, overall debtor and unbilled revenue days declined from 103 in FY12 to 100 in FY13, the key reason for improved working capital management. Cash inflow from the current liabilities side, mainly trade payables, also ensured that this was 74% higher than in FY12 (Rs23.3bn against Rs13.4bn in FY12). It should be noted that in FY12, debtor and unbilled revenue days rose significantly to 103 days from 93 days in FY11 and taxes paid also surged nearly 80% YoY at Rs40.7bn, which was the key reason for the slow 6% YoY growth in OCF, despite a healthy 29% YoY growth in EBIT. Thus, in FY13, significant improvement in working capital management ensured that healthy EBIT growth also translated into strong OCF growth. Vertical revenue split In FY13, it was the retail and consumer packaged goods (CPG) vertical that registered the highest growth for TCS, an impressive 41.1% YoY at Rs84bn, the second successive year in which this vertical posted the highest growth for the IT major. In US dollar terms, the vertical topped US$1.50bn in revenue (US$1.54bn). This was led by transformational infrastructure and managed services deals in both traditional and emerging technologies, and good traction for its full-service capabilities among its major customers. The retail and CPG vertical has been a major outperformer for TCS over the past few years, having clocked an impressive compounded annual growth rate (CAGR) of 31.8% in US dollar revenue over the period FY07-FY13, which is considerably above the company s average CAGR of 18.0% over the same period (rupee revenue CAGR of 36.2% over the same period versus 22.5% company average). Retail and CPG accounted for 13.3% of consolidated revenue in FY13 as compared with 6.9% in FY07. Exhibit 1: Retail and CPG vertical Strong outperformer (Rsmn) 90, , , , , Retail and CPG revenue Percentage of revenue (RHS) 5 Source: Company, Nirmal Bang Research On the other hand, the key banking, financial services and insurance (BFSI) vertical grew 28.9% YoY at Rs271.5bn, which is in line with the company s average growth rate. In US dollar terms, the vertical nearly touched the US$5bn mark in revenue (US$4.98bn) and is by far the largest BFSI practice among all Indian IT companies. Revenue growth in this vertical was led by focus on large banks and financial institutions on both - cost optimisation and efficiency - and increased adoption of emerging technologies such as digital, channel integration, big data, analytics and social media. The manufacturing (MFG) vertical posted a healthy growth of 37.2% YoY at Rs52.2bn, while in US dollar terms it nearly touched US$1bn in revenue (US$958mn), with the US automotive and aerospace clients witnessing a strong growth during the year. Clients made incremental investments in product lifecycle management (PLM) solutions, business intelligence, analytics and big data, with the focus on product and service differentiation and reducing product cycle time. The telecommunications, media and entertainment (TM&E) vertical clocked a 21.5% YoY revenue growth at Rs75.4bn (US$1.4bn). This vertical grew well below the company average and continued to underperform, with key clients remaining under stress because of falling revenue growth and cost pressure. The Others segment including sectors such as life sciences and healthcare, energy and utilities, travel, transportation and hospitality (TT&H), and hi-tech grew 23.7% YoY at Rs146.9bn (US$2.7bn). Within this, it was the hi-tech (27.8% YoY growth) vertical that drove growth, led by investments in new technologies, platforms and the demand for transformational projects. 2 Tata Consultancy Services

3 Exhibit 2: Vertical-wise revenue Retail and CPG, MFG lead growth in FY13 Industry vertical (Rsmn) FY12 FY13 Chg Banking, financial services and insurance 210, , Manufacturing 38,005 52, Retail and consumer packaged goods 59,545 84, Telecommunications, media and entertainment 62,047 75, Others 118, , Total 488, , Source: TCS Annual Report From an incremental revenue perspective, it was the BFSI vertical that contributed the maximum of 43.2% to FY13 incremental revenue of TCS, followed by Others with 20% incremental revenue share. Retail and CPG contributed 17.4%, with the balance coming from the MFG and TM&E verticals. Exhibit 3: Vertical-wise incremental revenue BFSI, retail and CPG lead growth in FY13 Industry vertical (Rsmn) FY13 incremental revenue Incremental revenue share Banking, financial services and insurance 60, Manufacturing 14, Retail and consumer packaged goods 24, Telecommunications, media and entertainment 13, Others 28, Total 140, Source: TCS Annual Report , Nirmal Bang Research Vertical-wise profitability In FY13, it was the retail and CPG vertical that outperformed, registering a 146bps YoY expansion in operating margin at 30.7%. In absolute terms, operating profit surged 48.1% YoY at Rs25.8bn for this vertical. The Others and MFG verticals also reported margin expansion, albeit much lesser, of 20bps and 19bps, respectively, in FY13 at 27.2% and 26.1%, respectively. Operating profit for Others grew 24.6% YoY at Rs39.9bn, while in case of MFG it grew 38.2% YoY at Rs13.6bn. However, this was negated by a steep decline in margins of 461bps YoY registered by the TM&E vertical. TM&E margin fell to 25.8% in FY13 (30.5% in FY12), with operating profit in absolute terms growing just 3.1% YoY at Rs19.5bn. Thus, over the past two financial years, operating margin crashed nearly 900bps for this vertical - a result of slow revenue growth and investments made to drive future revenue growth. The key BFSI vertical reported a 131bps decline in margins at 29.5%, with operating profit in absolute terms growing 23.4% YoY at Rs80.1bn. Overall, operating profit margin declined 86bps at 28.4%, with operating profit in absolute terms rising 25% YoY at Rs179bn. Exhibit 4: Vertical-wise profitability Retail and CPG outperforms again Particulars Operating profit (Rsmn) Change Operating margin Change Industry vertical FY12 FY13 FY12 FY13 (bps) Banking, financial services and insurance 64,931 80, (131)bps Manufacturing 9,859 13, bps Retail and consumer packaged goods 17,421 25, bps Telecommunications, media and entertainment 18,896 19, (461)bps Others 32,028 39, bps Total 143, , (86)bps Source: TCS Annual Report , Nirmal Bang Research Geographic revenue split In FY13, it was the UK and Latin American geographies that grew ahead of company average (44.3% YoY and 40.3% YoY revenue growth, respectively). UK revenue rose to Rs107.6bn in FY13, while Latin America revenue touched Rs21.1bn. European revenue (excluding UK), due partly to the economic problems plaguing the region, grew below the company average % YoY at Rs59.8bn. The key North American (NA) market grew 27.4% YoY at Rs332.2bn, slightly below the company average. India grew 16.4% YoY at Rs48.9bn, Asia Pacific grew 27.1% YoY at Rs47bn and Middle East and Africa grew 28.4% YoY at Rs13.4bn. 3 Tata Consultancy Services

4 Exhibit 5: UK, Latin America drive growth Geography (Rsmn) FY12 FY13 Chg North America (NA) 260, , United Kingdom (UK) 74, , Europe (excluding the UK) 49,283 59, India 42,023 48, Asia Pacific 36,979 46, Latin America 15,056 21, Middle East and Africa 10,423 13, Total 488, , Source: TCS Annual Report From an incremental revenue perspective, the NA geography contributed the maximum of 50.7% to FY13 incremental revenue, followed by the UK (23.4%), Europe excluding the UK (7.4%) and Asia Pacific (7.1%), with the balance accounted for by India, Latin America and the Middle East and Africa. Exhibit 6: Geography-wise incremental revenue NA, UK and Europe lead in FY13 Geography (Rsmn) FY13 incremental revenue Incremental revenue share North America 71, UK 33, Europe (excluding the UK) 10, India 6, Asia Pacific 10, Latin America 6, Middle East and Africa 2, Total 140, Source: TCS Annual Report , Nirmal Bang Research Service line revenue split From a service line perspective, in FY13 it was the consulting, IT infrastructure services and business process outsourcing (BPO) businesses that drove growth, registering revenue growth rates of 51.5% YoY, 47% YoY and 45.5% YoY, respectively. These businesses registered revenue of Rs19.1bn, Rs72.3bn and Rs78.5bn, respectively. The IT major s largest business application development and maintenance (ADM) - grew 23.2% YoY (Rs269.6bn), assurance services grew at a healthy 33.3% YoY at Rs48.6bn, engineering and industrial services grew 28.6% YoY at Rs29bn, and enterprise solutions grew 25.1% YoY at Rs95.8bn. Asset leverage solutions, the product business, witnessed revenue decline of 9.5% YoY at Rs17bn. Thus, in FY13 all TCS service lines, with the exception of asset leverage solutions, achieved over 20% YoY revenue growth, reflecting broad-based growth. For FY14E, we have factored in a 14.3% YoY US dollar revenue growth compared with 13.7% YoY achieved in FY13, as the IT major continues to wtiness strong traction among its clients, with discretionary spending likely to add further to revenue momentum. Exhibit 7: Service line revenue Broad-based growth Service line (Rsmn) FY12 FY13 Chg Application development and maintenance 218, , Business process outsourcing 53,961 78, Enterprise solutions including business intelligence 76,572 95, IT infrastructure services 49,192 72, Assurance services 36,435 48, Engineering and industrial services 22,585 29, Asset leverage solutions 18,797 17,008 (9.5) Consulting 12,600 19, Total 488, , Source: TCS Annual Report From an incremental revenue perspective, it was the ADM business that contributed the maximum in FY13 of 36.0%, followed by BPO (17.4%), IT infrastructure services (16.4%) and enterprise solutions (13.6%). 4 Tata Consultancy Services

5 Exhibit 8: Service line incremental revenue ADM leads in FY13 Service line (Rsmn) FY13 incremental revenue Incremental revenue share Application development and maintenance 50, Business process outsourcing 24, Enterprise solutions including business intelligence 19, IT infrastructure services 23, Assurance services 12, Engineering and industrial services 6, Asset leverage solutions (1,788) (1.3) Consulting 6, Total 140, Source: TCS Annual Report , Nirmal Bang Research Employee perspective TCS had a total of 276,196 employees on its rolls at the end of FY13. The IT major hired nearly 70,000 employees in FY13 (69,728), marginally lower than the gross addition witnessed in FY12 (70,400). Laterals accounted for 33.7% of the gross addition. Net hires stood at 37,613, again slightly lower than the FY12 net addition figure of 39,969. Trailing 12-month (TTM) attrition rate for the year declined to 11.6% from 12.8% in FY12, the second successive year of decline, which is a positive sign. Exhibit 9: Lateral hires, cost/employee (US$) 32,500 (% of gross hires) 50 30, , , , ,000 Employee Cost/employee Lateral hires (RHS) 10 Source: Company, Nirmal Bang Research We expect TCS to recruit nearly 50,000 employees (gross) and around 24,000 employees (net) in FY14E. From an utilisation perspective, we expect this to remain within a range and expect 82.5% utilisation in FY14E (81.7% in FY13). TCS has been able to keep the utilisation rate at a higher level as compared with its peers owing to its greater scale and we expect the IT major to sustain over 80% utilisation rate going forward. Key operating metrics and ratios TCS average revenue per employee stood at Rs2.45mn (US$44,945) in FY13, a growth of 9.4% YoY in rupee terms, but a decline of 3.4% YoY in US dollar terms. The decline in revenue productivity was due to significant hiring undertaken by the IT major, with the increase in rupee terms largely due to rupee depreciation. Going forward, we believe improving revenue productivity is critical for Indian IT firms including TCS as they focus on moving higher up the value chain more meaningfully into services like consulting, which enjoys significantly higher billing rates than the company average. This will add some element of nonlinearity to revenue, which has so far not been meaningful enough to drive revenue/employee on a sustainable uptrend. In FY14E, we expect TCS to report a 2.1% YoY increase in revenue/employee in US dollar terms due to sustained revenue momentum and lower hiring compared with FY13. 5 Tata Consultancy Services

6 Exhibit 10: Revenue/employee trend (Rs'000) 2,500 (US$) 60,000 2,350 55,000 2,200 50,000 2,050 45,000 1,900 40,000 1,750 Rupee revenue/employee US dollar revenue/employee (RHS) 35,000 Source: Company, Nirmal Bang Research On the other hand, cost/employee also declined 3.2% YoY in US dollar terms at US$22,743, while it rose in rupee terms by 9.6% YoY at Rs1.24mn. Thus, even though revenue productivity declined, TCS was able to use its significant scale and bulge mix to keep employee cost under control, with these largely flat as a percentage of revenue in FY13 on YoY basis (50.6% of revenue versus 50.5% in FY12). The IT major recruited a slightly higher percentage of gross hires as freshers in FY13 compared with FY12 (51.3% as against 46.5% in FY12) Exhibit 11: Cost/employee trend (Rs'000) 1,350 (US$) 32,500 1,280 30,500 1,210 28,500 1,140 26,500 1,070 24,500 1,000 Rupee cost/employee US dollar cost/employee (RHS) 22,500 Source: Company, Nirmal Bang Research In terms of ratios, TCS return on equity (RoE) stood at a healthy 37.9% in FY13, an 118bps rise from the 36.8% level in FY12. It should be noted that TCS RoE steadily declined over the past few years - from 55.8% in FY07 to 37.9% in FY13. However, most of the fall was in FY08 and FY09 (due to declining EBIT margin, lower asset turover ratio and lower leverage ratio). Since FY09, the IT major to its credit has been able to maintain a largely stable trend in RoE, as improving profitability and higher asset turnover off-set the rise in tax rate and falling leverage ratio. Going forward, we expect the RoE to fall due to lower asset turnover ratio and lower leverage ratio owing to strong cash accumulation (cash balance of Rs104.7bn in FY14E versus Rs67.5bn in FY13). 6 Tata Consultancy Services

7 TCS RoE: DuPont break-up Better profitability, asset turnover off-set higher tax, lower leverage Exhibit 12: PAT/PBT Tax burden ratio Exhibit 13: PBT/PBIT Interest burden ratio Source: Company, Nirmal Bang Research Exhibit 14: PBIT/sales Profit margin Source: Company, Nirmal Bang Research Exhibit 15: Sales/assets Asset turnover ratio Source: Company, Nirmal Bang Research Exhibit 16: Assets/equity Leverage ratio Source: Company, Nirmal Bang Research Exhibit 17: RoE Stable since FY Source: Company, Nirmal Bang Research 25 Source: Company, Nirmal Bang Research Related party transactions TCS had transactions with 35 fellow Tata Group companies in FY13, apart from holding company Tata Sons relating to revenue, interest income, loans and advances, debtors, creditors, purchase of goods and services, and inter-corporate deposits. In most cases, the pecuniary value of its transactions with these entities was in low single digits with respect to the total. Interest income (11.0% of the total), purchase of goods, services and facilities (12.1% of the total), investment in debentures (77.7% of the total) and intercorporate deposits matured (33.0% of the total) are the major items where the pecuniary value of the transactions is a reasonably significant percentage of the total. 7 Tata Consultancy Services

8 Exhibit 18: Related party transactions Particulars (Rsmn) FY12 FY13 Revenue Tata Teleservices 3,097 2,695 Tata Teleservices (Maharashtra) Total 3,699 3,210 % of overall revenue Interest income Tata Sons Panatone Finvest Total 1,051 1,178 % of overall interest income Debtors, unbilled revenue, loans and advances, other assets Tata Sons 1,019 1,598 Tata Teleservices Tata Realty & Infrastructure 1, Total 3,491 3,203 % of overall debtors, unbilled revenue, loans and advances and other assets Creditors, advance billings, advances from customers Tata Sons 804 1,103 Tata Teleservices Total 974 1,265 % of overall creditors, advance billings and advances from customers Purchase of goods, services and facilities Tata Teleservices TC Travel and Services TT Holdings and Services 1,870 2,398 Total 2,557 3,186 % of overall purchase of goods and services Investments in debentures Tata Sons 7,786 7,674 Panatone Finvest 2,000 2,000 Total 9,786 9,674 % of overall investments in debentures Inter-corporate deposits placed Tata Realty & Infrastructure 1,200 0 Tata Autocomp Systems Tata Capital 0 1,500 Total 1,500 1,800 % of overall inter-corporate deposits placed Inter-corporate deposits matured Tata Sky Tata Autocomp Systems Tata Realty & Infrastructure 1, Tata Capital 0 1,500 Total 1,600 2,800 % of overall inter-corporate deposits matured Source: TCS Annual Report , Nirmal Bang Research 8 Tata Consultancy Services

9 Capital expenditure TCS incurred Rs26.3bn capital expenditure in FY13 (4.2% of revenue), a slight increase from Rs20.1bn in FY12 (4.1% of revenue). The capex was funded through internal accruals. The amount in capital work-inprogress stood at Rs19bn, mostly relating to the construction of facilities and delivery centres across various locations in India. Contingent liabilities and cash comparison TCS has considered a sum of Rs35.8bn as contingent liability, a major portion of which includes a sum of Rs27.6bn as income tax demand. TCS has also given Rs4.9bn as guarantees on behalf of its subsidiaries, namely Diligenta (UK). Against the contingent liability amount, TCS had cash and current investments to the tune of Rs77bn on its balance sheet. Tax rate flat in FY13, expect steady increase from FY14 TCS effective tax rate fell slightly to 22.3% in FY13 from 22.7% in FY12, partly due to a sum of Rs1.3bn claimed as MAT credit (nil in FY12). Going forward, we expect a 24% tax rate for TCS in FY14E. Exhibit 19: TCS effective tax rate FY14E Source: Company, Nirmal Bang Research Corporate governance TCS board of directors comprises 11 members, of whom 10 (90.9%) are non-executive directors and six (54.6%) are independent directors. None of the non-executive directors have any material pecuniary relationship or transactions with the company. As regards shareholding, Cyrus Mistry, chairman, holds 4.2mn shares, S. Ramadorai, vice chairman, holds 0.2mn shares, N. Chandrasekaran, CEO, holds 88,528 shares, Ishaat Hussain holds 1,740 shares and Phiroz Vandrevala holds 80,000 shares. Seven board meetings were held in FY13, with nine members attending all the meetings. Regards independent director compensation, as per the company s board compensation policy, the total compensation payable to independent directors, determined by the board should not exceed 1% of the company s net profit for the year, calculated as per the provisions of the Companies Act, In FY13, TCS paid out a sum of Rs124mn as commission to its independent directors, which is 0.09% of the IT major s FY13 reported net profit. This compares with a sum of Rs150mn paid out as commission in FY12, which amounts to 0.14% of FY12 reported net profit. 9 Tata Consultancy Services

10 Exhibit 20: Independent/non-executive director compensation details Independent/non-executive director commission (Rsmn) FY12 FY13 Chg R.N. Tata* (62.5) Cyrus Mistry** S. Ramadorai Aman Mehta V. Thyagarajan Prof. Clayton M. Christensen Dr. Ron Summer Laura M. Cha$ (62.5) Dr. Vijay Kelkar Ishaat Hussain Phiroz Vandrevala O. P. Bhatt# Total (17.3) % of reported net profit (0.05) Source: TCS Annual Reports and ; * Retired as director and chairman w.e.f. 28 December 2012; ** Appointed as director w.e.f. 2 April 2012 and chairman w.e.f. 28 December 2012; $ Ceased to be a director w.e.f. 29 June 2012; # Appointed as director w.e.f. 2 April Outlook and valuation We expect FY14 to be a challenging year for Indian IT sector in view of the challenging business environment and the worsening Eurozone crisis, and companies that have better revenue visibility and are able to drive higher volume growth will get a valuation premium compared with peers. TCS has been able to achieve considerably above-industry growth rate and has also been able to outperform peers like Infosys and Wipro despite its considerably larger size. However, we believe its valuation is not attractive enough to acquire the stock at current levels. TCS stock currently trades at a price-to-earnings (PE) multiple of 17x FY15E EPS. We retain our Hold rating on the stock with a target price of Rs1,512, implying a PE of 17.5x FY15E EPS. Rating track Date Rating Market price (Rs) Target price (Rs) 2 June 2011 Hold 1,175 1,224 1 July 2011 Hold 1,180 1, July 2011 Buy 1,124 1, August 2011 Hold September 2011 Hold 995 1, September 2011 Sell 1,060 1,019 9 November 2011 Sell 1,123 1, November 2011 Hold 1,062 1,114 2 January 2012 Hold 1,161 1, January 2012 Hold 1,104 1, March 2012 Hold 1,143 1, April 2012 Hold 1,059 1,200 4 June 2012 Hold 1,225 1, June 2012 Hold 1,259 1, July 2012 Buy 1,236 1,444 4 October 2012 Hold 1,322 1, October 2012 Hold 1,290 1,375 7 January 2013 Hold 1,299 1, January 2013 Hold 1,334 1,400 6 April 2013 Sell 1,481 1, April 2013 Hold 1,459 1, Tata Consultancy Services

11 Disclaimer Stock Ratings Absolute Returns BUY > 15% HOLD 0-15% SELL < 0% This report is published by Nirmal Bang s Research desk. Nirmal Bang has other business units with independent research teams separated by Chinese walls, and therefore may, at times, have different or contrary views on stocks and markets. This report is for the personal information of the authorised recipient and is not for public distribution. This should not be reproduced or redistributed to any other person or in any form. This report is for the general information for the clients of Nirmal Bang Equities Pvt. Ltd., a division of Nirmal Bang, and should not be construed as an offer or solicitation of an offer to buy/sell any securities. We have exercised due diligence in checking the correctness and authenticity of the information contained herein, so far as it relates to current and historical information, but do not guarantee its accuracy or completeness. The opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Nirmal Bang or any persons connected with it do not accept any liability arising from the use of this document or the information contained therein. The recipients of this material should rely on their own judgment and take their own professional advice before acting on this information. Nirmal Bang or any of its connected persons including its directors or subsidiaries or associates or employees or agents shall not be in any way responsible for any loss or damage that may arise to any person/s from any inadvertent error in the information contained, views and opinions expressed in this publication. Access our reports on Bloomberg Type NBIE <GO> Team Details: Name Id Direct Line Rahul Arora CEO rahul.arora@nirmalbang.com / 99 Hemindra Hazari Head of Research hemindra.hazari@nirmalbang.com / 18 Sales and Dealing: Neha Grover AVP Sales neha.grover@nirmalbang.com Ravi Jagtiani Dealing Desk ravi.jagtiani@nirmalbang.com , Sudhindar Rao Dealing Desk sudhindar.rao@nirmalbang.com , Pradeep Kasat Dealing Desk pradeep.kasat@nirmalbang.com /8101, Michael Pillai Dealing Desk michael.pillai@nirmalbang.com /8103, Nirmal Bang Equities Pvt. Ltd. Correspondence Address B-2, 301/302, Marathon Innova, Nr. Peninsula Corporate Park Lower Parel (W), Mumbai Board No. : /1 Fax. : Tata Consultancy Services