(PSYS IN) Rating: ACCUMULATE CMP: Rs560 TP: Rs725 October 22, 2018 Q2FY19 Result Update Change in Estimates Target Reco Change in Estimates Current Previous FY19E FY20E FY19E FY20E Rating ACCUMULATE ACCUMULATE Target Price 725 860 Sales (Rs. m) 34,385 38,622 35,356 40,918 % Chng. (2.7) (5.6) EBITDA (Rs. m) 5,800 6,473 5,881 6,753 % Chng. (1.4) (4.2) EPS (Rs.) 45.6 53.7 45.8 55.3 % Chng. (0.4) (2.9) Key Financials FY17 FY18 FY19E FY20E Sales (Rs. m) 28,783 30,336 34,385 38,622 EBITDA (Rs. m) 4,539 4,688 5,800 6,473 Margin (%) 15.8 15.5 16.9 16.8 PAT (Rs. m) 3,014 3,230 3,649 4,293 EPS (Rs.) 37.7 40.4 45.6 53.7 Gr. (%) 1.3 7.2 13.0 17.7 DPS (Rs.) 9.0 9.6 11.4 13.4 Yield (%) 1.6 1.7 2.0 2.4 RoE (%) 16.9 16.0 16.2 17.0 RoCE (%) 16.9 16.0 16.2 17.0 EV/Sales (x) 1.3 1.2 1.0 0.8 EV/EBITDA (x) 8.2 7.3 5.5 4.5 PE (x) 14.9 13.9 12.3 10.4 P/BV (x) 2.4 2.1 1.9 1.7 Key Data PERS.BO PSYS IN 52-W High / Low Rs.915 / Rs.536 Sensex / Nifty 34,134 / 10,245 Market Cap Rs.45bn/ $ 615m Shares Outstanding 80m 3M Avg. Daily Value Rs.351.78m Shareholding Pattern (%) Promoter s 30.43 Foreign 26.49 Domestic Institution 17.23 Public & Others 25.84 Promoter Pledge (Rs bn) - Stock Performance (%) 1M 6M 12M Absolute (30.4) (23.0) (15.3) Relative (24.9) (22.4) (19.6) Madhu Babu madhubabu@plindia.com 91-22-66322300 Rajat Gandhi rajatgandhi@plindia.com 91-22-66322246 Weak show puts company in tough spot for FY19 Steep Revenue miss: Persistent Systems delivered weak performance for. Revenues came at USD118.2mn down 4.4% QoQ and up 0.2% YoY and below our estimates (Ple: USD122mn). IBM alliance revenues (29.5% of total revenues) came at USD35mn down 12% QoQ and up 8% YoY. We note had ~USD6mn pass through revenue from IBM alliance business. Absence of the same led to steep sequential drop in the IBM alliance business. Services business (43% of total revenues) revenues were down 1% QoQ and 1.5% YoY. Digital business (22% of total revenues) declined by 1.7% QoQ. Management cited that shortfall in digital revenue was on account of closure of one of the projects and a shift in the business mix to offshore in select other projects. Management expects Digital Business revenues to recover in 2HFY19. Management also expect IBM alliance business to have strong quarter in 3Q owing to seasonality. Offshore shift aids margins: EBIDTA margin for came at 17.2% up 40bps QoQ and were above our estimates (Ple : 15.7%). Headwinds from wage hikes and strong headcount addition for the quarter were negated by tailwinds from rupee depreciation and offshore shift in mix of business. Headcount stood at 9300 which is a net employee addition of 400 employees for the quarter. Management cited that it faced execution issues in staffing few projects in. Hence, company has stepped up hiring in 2Q and expects net addition to remain strong in 3Q as well. Change in strategy key for revival? Persistent derives ~22% of total revenues from Digital in which caters predominantly to BFSI and Healthcare verticals. Persistent has predominantly focused on IP and Solution led approach in this business with competencies around Salesforce, Appian and Oracle. Hence, Persistent has high reliance on project led revenues in the Digital business. Lack of traditional Service offerings (Like Application Development and Maintenance, Testing, IMS etc) has limited Persistent s ability to mine the Enterprise clients. Hence, absence of annuity streams in leading to lower client mining and higher quarterly volatility in business as per our view. We believe any acquisition to boost Enterprise business and expand into Traditional Services could aid in better positioning. Please see our thematic on the stock (Click on the Link for Detailed Report) Valuation and View: Post 2Q revenue miss, we trim Persistent USD revenue assumptions to 4.7/9% for FY19/FY20E (vs 7.5/12% modeled earlier). Organic revenue growth for FY19 would be 3.8% and rest owing to full impact of Parx acquisition. Persistent s revenue growth for FY19 would be lowest among midcap peers. Hence, stock is likely to remain trading at cheap P/E multiples over the medium term. We trim our EPS estimates by 0.5/3% led by USD revenue growth downgrade. Our EPS estimates are Rs45.5/54/sh for FY19/FY20E. Stock trades at 10.6x FY20E EPS and 4.5x EV/EBIDTA. Net cash on balance sheet stands at Rs13.4bn (Rs168/sh) which is 30% of Mcap. We believe company should a do a buyback considering the strong cash position on the balance sheet and cheap valuations. Our target price is trimmed by 15% to Rs725/sh (13.5x FY20E EPS vs 15.5x earlier) led by P/E downgrade. Retain Accumulate. October 22, 2018 1
-4.5% -4.4% 0.0% 0.7% -1.8% 0.4% 5.0% 4.2% 5.5% 8.0% 12.0% 4.3% 4.6% -0.9% 3.6% 4.5% 3.8% 5.6% Persistent Systems Q1FY19: Consolidated P&L Rs mn QoQ 2QFY18 YoY Ple Var (ACT. Vs. Est) Sales (USD mn) 118.2 123.6-4.4% 118.1 0.1% 122.5-3.5% Sales 8355 8342 0.2% 7613 9.8% 8661-3.5% EBITDA 1437 1400.8 2.6% 1158.2 24.1% 1360 5.7% EBITDA Margins 17.2% 16.8% 15.2% 15.7% PAT 882 873.9 0.9% 825.9 6.8% 801 10.1% EPS (diluted) 11.0 10.9 0.9% 10.3 6.8% 10.0 10.1% Revenues below estimates: Revenues came at USD118.2mn down 4.4% QoQ and below our estimates (Ple: USD122.5mn). Revenues grew by 0.1 YoY for and hence remained tepid. 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% USD Revenue Growth QoQ 35.0% 30.0% 25.0% USD Revenue Growth YoY 20.0% 15.3% 15.0% 11.5% 13.7% 12.7% 10.2% 8.2% 8.7% 10.0% 5.0% 33.3% 26.8% 25.5% 22.8% 12.3% 11.3% 8.6% 7.8% 7.3% 9.4% IBM alliance revenues came at USD35mn down 12% QoQ and up 8% YoY and remained weak. We note IBM alliance had USD6mn of pass through revenues in. Absence of the same in 2Q led to steep moderation in revenues in 2Q. We note that 3Q is seasonally strong quarter for IBM and hence traction in the SBU would be keenly watched. Services business revenues came at USD50.8mn was down 0.9% QoQ and down 1.5% YoY. Digital SBU revenues at USD26.0mn down 1.7% QoQ and up 5.4% YoY. This is the second consecutive quarter of weakness in the Digital Business Despite its small revenue base in Digital, Persistent delivered only 5.5% YoY growth in Digital SBU which is much lower than Tier I IT peers. We note that TCS Digital SBU grew by 60% YoY in. (TCS Digital Revenue for at USD1460mn which is much larger than Persistent Digital revenue base). October 22, 2018 2
Revenue by Business unit Segmental growth (fig in USD mn) QoQ gr. 2QFY18 YoY gr. Services 50.8 51.3-0.9% 51.61-1.5% Digital 26.0 26.5-1.7% 24.68 5.4% Alliance 34.9 39.7-12.1% 32.24 8.2% Accelerite 6.5 6.2 5.2% 9.57-32.0% Total Revenues 118.2 123.6-4.4% 118.10 0.1% Margins performance remains steady: EBIDTA margin for came at 17.2% up 40bps QoQ and were above our estimates (Ple: 15.7%). Headwinds from wage hikes and strong headcount addition for the quarter were negated by tailwinds from rupee depreciation and offshore shift in mix of business. Headcount stood at 9300 which is a net employee addition of 400 employees for the quarter. After five consecutive quarters of sequential decline, Persistent showed strong headcount addition in. PAT at Rs881mn was above our estimates ([Pl: Rs801mn) led by margin beat. EBITDA Margin vs. Average Exchange Rate (USD vs INR) EBIT Margin vs. Average Exchange Rate (USD vs INR) 24.0% 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% EBIDTA margin (%) Average Rate ( USD vs INR) 21.8% 20.6% 20.1% 20.2% 19.4% 18.7% 18.8% 15.9% 15.1% 15.7% 15.9% 16.3% 14.3% 15.2% 17.4% 14.8% 16.8% 17.2% 72.0 70.0 68.0 66.0 64.0 62.0 60.0 58.0 17.0% 15.0% 13.0% 11.0% 9.0% 7.0% EBIT margin(%) Average Rate ( USD vs INR) 15.7% 15.5% 15.1% 15.7% 14.8% 14.4% 14.6% 12.1% 10.2% 10.5% 10.7% 10.9% 9.0% 10.2% 12.4% 9.2% 12.0% 12.4% 72.0 70.0 68.0 66.0 64.0 62.0 60.0 58.0 56.0 54.0 Total Employee Headcount of Persistent Net Employee addition and offshore utilization (%) 10,000 9,500 9,000 8,500 8,000 7,500 8,067 8,296 8,506 8,454 8,545 8,966 9,264 9,389 9,305 9,229 9,460 9,401 9,246 9,109 8,976 8,902 9,302 Q3FY18 500 400 300 200 100 - (100) (200) 19 Net addition 191 229 210 (52) 91 421 298 125 (84) (76) Offshore Utilisation rates 231 (59) (155) (137) (133) (74) Q3FY18 400 85.0% 80.0% 75.0% 70.0% 65.0% 60.0% October 22, 2018 3
Effort mix shifts towards offshore: Persistent s effort mix is linear business has shifted toward offshore. This has aided margins but was weighed on revenue growth. Effort mix of Services Business (linear Business) 18.0% 17.0% 16.0% 15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 11.2% 10.3% 11.3% 11.5% 14.5% 13.9% 13.3% 13.3% 14.6% 14.3% 13.9% 11.7% 1QFY18 2QFY18 1QFY18 2QFY18 15.5% 16.4% 16.8% 16.9% 16.5% 15.5% Key Operating Metrics: Volume growth in linear business for the quarter stood at 0.8% (Onsite down 5.4% QoQ and offshore up 2% QoQ). Blend Realization for linear business dropped by 2.8% QoQ (Onsite down 3.5% QoQ and Offshore up 0.9% QoQ). 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -2.3% -10.0% olume growth in Service business Onsite Offshore Total volume Growth 3.0% 5.9% 3.9% 0.7% 1.9%0.4% 2.5% 3.9% 1.2% -2.0% -0.8% 5.4% 1.8% 0.0% -1.5% 0.6%0.8% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% Pricing growth/ (Decline) in service business 4.3% 2.0% 2.5% 1.1% 1.9% 1.1% 0.3% -0.2% -1.0% Onsite Offshore Blend -0.3% -0.2% 1.1% 2.2% 2.7%2.9% 0.8% -1.8% -2.8% Digital Remains weak for the quarter: We note that Digital has shown a sequential weakness for the quarter. Digital contributed to 21.4% of total revenues as on. (Vs. 24% of total revenues as on ). Business Mix of Persistent Service Mix of Revenues Services 44.5% 43.7% 41.9% 45.5% 41.5% 43.0% Digital 18.0% 20.9% 22.0% 24.0% 21.4% 22.0% Alliance 29.2% 27.3% 29.6% 24.3% 32.1% 29.5% Accelerite 8.3% 8.1% 6.5% 6.2% 5.0% 5.5% October 22, 2018 4
Onsite Utilisation rates drop on a sequential basis. Company has seen sharp moderation in onsite utilization owing to softness in Digital. Utilisation rates Linear utilisation 74.5% 75.2% 75.3% 74.2% 78.9% 77.8% 77.2% 78.6% 79.9% 81.2% 80.7% 81.9% Onsite utilisation 86.6% 85.9% 84.2% 84.0% 88.5% 85.3% 86.6% 87.2% 86.9% 88.2% 85.2% 83.6% Offshore utilisation 72.8% 73.6% 74.0% 72.9% 77.6% 76.7% 75.7% 77.1% 78.6% 79.9% 79.9% 81.6% Top account remains strong: Revenues from top client were up 3.3% QoQ. Revenues from Top 2-5 clients were down by 16% QoQ. Revenues from nontop 10 clients were down 1.7% QoQ. Revenue and growth in Top Accounts Fig in USD mn QoQ gr. 2QFY18 YoY gr. Top Client 30.4 29.4 3.3% 30.6-0.7% Top 2-5 Clients 20.8 24.7-15.8% 21.1-1.6% Top 6-10 Clients 10.8 12.2-12.1% 11.5-6.1% Revenues ( Non Top 10 Clients) 56.3 57.2-1.7% 54.9 2.5% Overview of the company's operating metrics Revenue by geography (%) Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q3FY18 Q4FY18 Q1FY19 Q2FY19 America 87.0% 85.2% 86.6% 86.5% 85.5% 83.4% 84.4% 80.9% 79.7% 82.6% Europe 5.2% 6.1% 5.3% 5.3% 5.9% 8.5% 7.3% 8.2% 12.0% 7.5% APAC 7.8% 8.5% 8.1% 8.2% 8.6% 8.1% 8.3% 10.9% 8.3% 9.9% Revenue by clients (%) Top Client 29.0% 28.4% 29.5% 26.5% 27.9% 25.9% 28.0% 21.7% 23.8% 25.7% Top 5 Clients 44.7% 44.3% 46.0% 43.3% 45.7% 43.8% 46.3% 40.9% 43.8% 43.3% Top 10 Clients 52.7% 52.8% 54.6% 52.4% 55.2% 53.5% 55.3% 49.9% 53.7% 52.4% Non Top 10 Clients 47.3% 47.2% 45.4% 47.6% 44.800% 46.5% 44.7% 50.1% 46.3% 47.6% Billing rates (USD/p.p.m) Rest of the world 15,437 16,101 15704 15917 16037 16023 16314 16662 16360 15787 India 4,325 4,288 4,257 4244 4212 4148 4220 4349 4333 4372 Billed person months Rest of the World 1,786 1,720 1867 1907 2104 2,346 2,413 2,391 2,348 2,221 India 11,030 11,246 11,610 11,459 11507 11,994 11,922 11,728 11,857 12,097 TOTAL 12,816 12,966 13,478 13,366 13,366 14,340 14,335 14,119 14,205 14,318 Others DSO Days 63 66 70 65 64 66 66 66 68 63 October 22, 2018 5
Consolidated Model of Persistent Systems FY15 FY16 FY17 FY18 FY19E FY20E FY21E USD revenue (mn) 309 352 429 471 493 536 594 Growth (%) 12.6% 14.0% 22.0% 9.7% 4.7% 8.9% 10.8% Organic growth 12.6% 9.0% 9.0% 7.7% 3.8% 8.9% 10.8% Average Rate (USD vs INR) 61.3 65.6 67.0 64.5 69.8 72.0 70.0 Consolidated P &L statement (Rs mn) Total Revenues 18,912 23,123 28,783 30,336 34,385 38,622 41,603 Growth (%) 13.3% 22.3% 24.5% 5.4% 13.4% 12.3% 7.7% EBIDTA 3,908 4,172 4,539 4,688 5,800 6,473 7,489 EBIT 2,930 3,207 3,050 3,104 4,196 4,841 5,741 PAT 2,869 2,974 3,014 3,231 3,649 4,293 4,955 EBIDTA Margin(%) 20.7% 18.0% 15.8% 15.5% 16.9% 16.8% 18.0% EBIT Margins (%) 15.5% 13.9% 10.6% 10.2% 12.2% 12.5% 13.8% PAT Margin(%) 15.2% 12.9% 10.5% 10.7% 10.6% 11.1% 11.9% Diluted EPS 36.3 37.2 37.7 40.4 45.6 53.7 61.9 EPS Growth 16.6% 2.3% 1.3% 7.2% 12.9% 17.7% 15.4% P/E 15.7 15.3 15.1 14.1 12.5 10.6 9.2 EV/EBIDTA 10.1 9.4 8.2 7.3 5.5 4.5 3.4 Consolidated Balance sheet Net Cash on Balance sheet 8,122 7,581 8,327 11,195 13,455 16,423 20,208 Net Cash per share 101 95 104 140 168 205 253 Net cash per share/ Stock Price 12.2% 11.3% 12.5% 16.8% 29.5% 36.0% 44.3% Consolidated Cash flows Cash flow from Operations 3,114 2,540 2,864 4,213 3,902 4,561 5,475 Capex 957 1,966 2,176 1,063 1,000 900 800 Free Cash flow ( ex Interest Income) 2,157 574 688 3,150 2,902 3,661 4,675 FCF/EBIDTA 55.2% 13.8% 15.2% 67.2% 50.0% 56.6% 62.4% ROE(%) 22.1% 19.5% 16.9% 16.0% 16.2% 17.0% 17.4% Dividend Payout Ratio 33.1% 25.9% 28.9% 30.1% 30.1% 30.1% 30.1% October 22, 2018 6
Financials Income Statement (Rs m) Y/e Mar FY17 FY18 FY19E FY20E Net Revenues 28,783 30,336 34,385 38,622 YoY gr. (%) 24.5 5.4 13.4 12.3 Employee Cost 18,518 19,703 22,235 25,100 Gross Profit 10,266 10,633 12,150 13,522 Margin (%) 35.7 35.1 35.3 35.0 SG&A Expenses - - - - Other Expenses 5,726 5,945 6,350 7,050 EBITDA 4,539 4,688 5,800 6,473 YoY gr. (%) 8.8 3.3 23.7 11.6 Margin (%) 15.8 15.5 16.9 16.8 Depreciation and Amortization 1,490 1,585 1,604 1,631 Balance Sheet Abstract (Rs m) Y/e Mar FY17 FY18 FY19E FY20E Non-Current Assets Gross Block 12,402 13,730 14,730 15,630 Tangibles 7,036 7,324 7,824 8,274 Intangibles 5,366 6,406 6,906 7,356 Acc: Dep / Amortization 7,118 8,685 10,289 11,921 Tangibles 4,267 4,743 5,304 5,875 Intangibles 2,851 3,943 4,985 6,046 Net fixed assets 5,284 5,045 4,441 3,709 Tangibles 2,769 2,581 2,520 2,399 Intangibles 2,515 2,464 1,921 1,310 EBIT 3,050 3,103 4,196 4,841 Margin (%) 10.6 10.2 12.2 12.5 Net Interest - - - - Other Income 957 1,189 818 1,000 Capital Work In Progress 290 52 52 52 Goodwill 76 77 77 77 Non-Current Investments 3,393 3,061 3,161 3,261 Net Deferred tax assets 196 372 372 372 Other Non-Current Assets 72 92 92 92 Profit Before Tax 4,006 4,292 5,014 5,841 Margin (%) 13.9 14.1 14.6 15.1 Total Tax 992 1,062 1,365 1,548 Effective tax rate (%) 24.8 24.7 27.2 26.5 Profit after tax 3,014 3,230 3,649 4,293 Minority interest - - - - Share Profit from Associate - - - - Adjusted PAT 3,014 3,230 3,649 4,293 YoY gr. (%) 1.3 7.2 13.0 17.7 Margin (%) 10.5 10.6 10.6 11.1 Extra Ord. Income / (Exp) - - - - Reported PAT 3,014 3,230 3,649 4,293 YoY gr. (%) 1.3 7.2 13.0 17.7 Margin (%) 10.5 10.6 10.6 11.1 Other Comprehensive Income - - - - Total Comprehensive Income 3,014 3,230 3,649 4,293 Equity Shares O/s (m) 80 80 80 80 EPS (Rs) 37.7 40.4 45.6 53.7 Source: Company Data, PL Research Current Assets Investments 4,500 5,916 5,916 5,916 Inventories - - - - Trade receivables 4,754 4,847 5,652 6,349 Cash & Bank Balance 1,510 2,414 4,674 7,643 Other Current Assets 950 1,677 1,727 1,777 Total Assets 23,464 26,589 29,400 32,683 Equity Equity Share Capital 800 800 800 800 Other Equity 18,193 20,472 23,022 26,024 Total Networth 18,993 21,272 23,822 26,824 Non-Current Liabilities Long Term borrowings 22 17 17 17 Provisions 146 160 160 160 Other non current liabilities - - - - Current Liabilities ST Debt / Current of LT Debt - - - - Trade payables 1,209 1,673 1,884 2,116 Other current liabilities 2,963 3,197 3,247 3,297 Total Equity & Liabilities 23,464 26,589 29,400 32,683 Source: Company Data, PL Research October 22, 2018 7
Cash Flow (Rs m) Y/e Mar FY17 FY18 FY19E FY20E Key Financial Metrics Year Y/e Mar FY17 FY18 FY19E FY20E PBT 4,007 4,293 5,014 5,841 Per Share(Rs) Add. Depreciation 1,490 1,585 1,604 1,631 EPS 37.7 40.4 45.6 53.7 Add. Interest (145) (162) (457) (600) CEPS 56.3 60.2 65.7 74.1 BVPS 237.4 265.9 297.8 335.3 Add. Other (379) (346) - - FCF 8.6 39.4 36.3 45.8 Op. profit before WC changes 4,973 5,370 6,161 6,873 DPS 9.0 9.6 11.4 13.4 Net Changes-WC (1,062) 56 (894) (764) Return Ratio(%) Direct tax (1,048) (1,214) (1,365) (1,548) RoCE 16.9 16.0 16.2 17.0 Net cash from Op. activities 2,864 4,213 3,902 4,561 ROIC 19.7 18.0 23.0 26.8 Capex+ acquisitions (2,169) (1,060) (1,000) (900) RoE 16.9 16.0 16.2 17.0 Interest / Dividend Income 271 272 457 600 Balance Sheet Others (321) (2,686) - - Net Debt : Equity (x) (0.3) (0.4) (0.4) (0.5) Net Cash from Invt. activities (2,219) (3,474) (543) (300) Debtor (Days) 60 58 60 60 Issue of share cap. / premium - - - - Valuation(x) Debt changes (5) (5) - - PER 14.9 13.9 12.3 10.4 Dividend paid (480) (800) (912) (1,073) P/B 2.4 2.1 1.9 1.7 Interest paid (2) (2) - - P/CEPS 39.0 41.7 45.5 51.3 Others (98) (150) (186) (219) EV/EBITDA 8.2 7.3 5.5 4.5 Net cash from Fin. activities (584) (956) (1,098) (1,292) EV/Sales 1.3 1.2 1.0 0.8 Net change in cash 61 (217) 2,260 2,968 Dividend Yield (%) 1.6 1.7 2.0 2.4 Free Cash Flow 688 3,150 2,902 3,661 Source: Company Data, PL Research Source: Company Data, PL Research Quarterly Financials (Rs m) Y/e Mar Q3FY18 Q4FY18 Q1FY19 Q2FY19 Net Revenue 7,918 7,525 8,342 8,355 YoY gr. (%) 6.2 3.5 14.6 9.8 Employee Expenses 5,009 4,917 5,372 5,409 Gross Profit 2,909 2,608 2,970 2,946 Margin (%) 36.7 34.7 35.6 35.3 EBITDA 1,374 1,111 1,401 1,437 YoY gr. (%) 18.7 (19.2) 26.1 2.6 Margin (%) 17.4 14.8 16.8 17.2 Depreciation / Depletion 393 420 401 399 EBIT 982 691 1,000 1,039 Margin (%) 12.4 9.2 12.0 12.4 Net Interest - - - - Other Income 193 293 187 231 Profit before Tax 1,174 984 1,187 1,270 Margin (%) 14.8 13.1 14.2 15.2 Total Tax 258 246 313 387 Effective tax rate (%) 22.0 25.0 26.4 30.5 Profit after Tax 916 738 874 882 Minority interest - - - - Share Profit from Associates - - - - Adjusted PAT 916 738 874 882 YoY gr. (%) 11.9 1.4 16.3 6.8 Margin (%) 11.6 9.8 10.5 10.6 Extra Ord. Income / (Exp) - - - - Reported PAT 916 738 874 882 YoY gr. (%) 11.9 1.4 16.3 6.8 Margin (%) 11.6 9.8 10.5 10.6 Other Comprehensive Income - - - - Total Comprehensive Income 916 738 874 882 Avg. Shares O/s (m) 80 80 80 80 EPS (Rs) 11.5 9.2 10.9 11.0 Source: Company Data, PL Research October 22, 2018 8
Price Chart Recommendation History (Rs) 900 816 732 648 564 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 No. Date Rating TP (Rs.) Share Price (Rs.) 1 17-Nov-17 BUY 730 643 2 13-Dec-17 BUY 730 642 3 10-Jan-18 BUY 750 742 4 29-Jan-18 BUY 870 782 5 13-Apr-18 BUY 870 688 6 24-Apr-18 BUY 820 726 7 10-Jul-18 BUY 870 808 8 30-Jul-18 BUY 900 828 9 05-Oct-18 BUY 860 717 Analyst Coverage Universe Sr. No. CompanyName Rating TP (Rs) Share Price (Rs) 1 Cyient BUY 810 669 2 HCL Technologies BUY 1,255 1,077 3 Hexaware Technologies Hold 475 409 4 Infosys BUY 790 695 5 L&T Technology Services Accumulate 1,780 1,651 6 Mindtree BUY 1,140 978 7 Mphasis Accumulate 1,220 1,068 8 NIIT Technologies BUY 1,460 1,192 9 Persistent Systems BUY 860 717 10 Redington (India) BUY 140 92 11 Sonata Software BUY 420 330 12 Tata Consultancy Services Accumulate 2,300 1,980 13 TeamLease Services Hold 2,740 2,219 14 Tech Mahindra BUY 885 721 15 Wipro Hold 350 325 16 Zensar Technologies BUY 330 297 PL s Recommendation Nomenclature (Absolute Performance) Buy : > 15% Accumulate : 5% to 15% Hold : +5% to -5% Reduce : -5% to -15% Sell : < -15% Not Rated (NR) : No specific call on the stock Under Review (UR) : Rating likely to change shortly October 22, 2018 9
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