Reasonably Priced Salient features of the IPO: Larsen and Toubro Infotech Ltd. (L&TIL) is a global IT services and solutions company. Incorporated in 1996, it is headquartered in Mumbai, India. The company is promoted by Larsen & Toubro Ltd. (L&T) a leading Indian conglomerate. Being an offer for sale, the company will not receive the net proceeds from the issue. Key competitive strengths: A strong business model Brand equity of L&T, its promoter Extensive portfolio of IT services and solutions Focus on emerging technologies Risk and concerns: Concentration of revenue among few clients Exchange rate fluctuations could negatively impact business Immigrations policies of countries, where it operates Profitability to dip if the company is not able to maintain favorable employee utilization Valuation & recommendation: At the higher price band of Rs. 710 per share, L&TIL s share is valued at a P/E multiple of 13.1x (to its restated FY16 EPS), which is at a discount to the average P/E multiple of 17.4x of peers. Moreover, on EV/EBITDA front too, the company is priced at a discount to its peers. Below are few key observations of the issue: L&TIL is a global IT service company promoted by L&T, which has a 94.9% stake (pre-issue) in the company, which will reduce to 84.6% post-issue. During FY16 L&TIL had 258 active clients, including 49 Fortune Global 500 companies. The company has a history of high client retention with 96.9% of its revenue being generated from existing clients. The impact of BREXIT is likely to be muted for L&TIL as its exposure to Europe is 17.4% of its revenue, of this exposure to Denmark, Finland, Sweden and Iceland accounted for 11% of revenue. L&TIL s business model ( Business-to-IT Connect ) enables it to leverage the domain expertise and institutional knowledge of the L&T group in providing IT solutions and services. On the financial front, the company has reported a topline CAGR of 16.4% over FY12-16. In FY16 it has reported a PAT margins of 15.8%. On the debt front, LT&IL is almost debt free. In FY16, the company has a RoE of 45.6%, which is higher than its peers. Although declining margins and high revenue concentration are a risk for the company, given its strong parentage, business model, muted impact of BREXIT, history of client retention and attractive valuation, we assign a SUBSCRIBE rating for the issue. Retail investors are offered a discount of Rs.10 per equity share. Recommendation SUBSCRIBE Price Band Rs. 705 - Rs. 710 Discount for Retail Investors No of OFS Shares (mn) 17.5 Rs. 10 per Share Total Issue Size (Rs. mn) Rs. 12,337.5 12,425 Bidding Date 11 th July 13 th July 2016 Book Running Lead Manager Registrar Sector/Industry Promoters Pre - Issue Shareholding Pattern Citigroup Global Markets India Pvt. Ltd., Kotak Mahindra Capital Company Ltd. and ICICI Securities Ltd. Link Intime India Pvt. Ltd. IT Consulting & Software Larsen & Toubro Ltd. Promoters and Promoter Group 94.9% Public 5.1% Total 100% Retail Application Money at Higher Cut-Off Price per Lot Post Retail Discount Number of Shares per Lot 20 Application Money Rs. 14,000 Analyst Sahil Nandkumar Research Analyst (022-6707 9999; Ext: 914) Email: sahil.nandkumar@choiceindia.com Particulars (Rs. mn) FY12 FY13 FY14 FY15 FY16 Revenue from Operation 31,820.2 38,514.4 49,205.0 49,780.4 58,470.6 EBITDA 6,897.6 8,704.9 11,472.8 10,044.6 10,356.2 Restated Reported PAT 4,331.5 5,737.3 9,283.4 7,691.6 9,221.8 EBIDTA Margin 21.7% 22.6% 23.3% 20.2% 17.7% Reported PAT Margin 13.6% 14.9% 18.9% 15.5% 15.8% RoE (%) 39.2% 42.8% 57.6% 38.0% 45.6% RoCE (%) 36.7% 43.2% 55.1% 36.3% 36.9% IPO UPDATE 1
About the Issue: L&TIL is coming up with an initial public offering (IPO) with total of around 17.5mn shares (fresh issue: nil; OFS shares: 17.5mn) in offering. Total IPO size is estimated at around Rs. 12,337.5-12,425mn. The issue will open on 11 th July 2016 and close on 13 th July 2016. Not more than 50% of the issue will be allocated to qualified institutional buyers. Further, at most 15% of the issue will be available for non-institutional bidders and the remaining 35% for retail investors. Net proceeds from the issue will go to selling shareholder. The company will not receive any money from the issue. Pre-issue promoter group stake in L&TIL stands at 94.9%, while public stake is 5.1%. Post IPO, promoter group stake will decline to 84.6%. Pre and Post Issue Shareholding Pattern (%) Pre Issue Post Issue Promoter & Promoter Group (%) 94.9% 84.6% Public 5.1% 15.4% IPO UPDATE 2
Information Technology Industry Overview: In 2015, the global economy was characterized by volatility and turmoil. Both developed and emerging economies faced headwinds as economic growth started to stagnate. According to The National Association of Software and Services Companies (NASSCOM), the role of technology has undergone a significant change and it is no more exclusive only to the corporate sector. Now industrialized and commoditized products are a part of the technology industry as are multiple disruptive digital technologies. NASSCOM notes that the shift towards digital is inevitable and incremental expenditures over the next decade may be driven by digital technologies As per NASSCOM, these factors have impacted spending on global technology. Worldwide information technology and business process management ( IT-BPM ) spend in 2015 (excluding hardware) was clearly impacted by the volatility in global currencies resulting in a near flat growth of 0.4% (USD 1.2tn) in 2015. Information technology ( IT ) services saw a slight decline in growth (-0.2%). A shift to cloud-based applications has led to a decline in traditional IS outsourcing and Network and Desktop Outsourcing ( NDOS ) businesses, thereby impacting overall IT services growth. Worldwide business process management ( BPM ) spend saw an approximately 3% growth over 2014, with analytics services emerging as the largest driver. According to NASSCOM, customers are beginning to expect analytics as part of bundled BPM services. Global IT-BPM Sector Wise spend (USD bn) Source: Company RHP The Indian IT-BPM Industry: According to NASSCOM, the Indian IT BPM industry is projected to grow at 8.5% in FY16, i.e. an addition of USD 11bn. The aggregate growth rate has been affected by the strengthening of the USD against INR, which is projected to bring down the domestic growth rate down to approx 3.2%. Key growth Drivers for the IT industry in 2015: Traditional verticals continued to drive growth Cost reduction and business efficiency Trends in the IT service sector in India: According to NASSCOM, the IT service sector in India has grown over two-folds in the last five years and is expected to reach a revenue worth USD 75bn in FY16, with a growth rate of 9% over FY15. Exports: Of the total Indian IT services market in FY16, revenues from exports stood at 81%. The exports market grew at 10.3% during FY16 to reach USD 61bn. Domestic: According to NASSCOM, domestic business contributed 19% of the total revenue of Indian IT services market. NASSCOM notes that the domestic market witnessed a growth of 3.9% to reach USD 14bn in FY16. IPO UPDATE 3
Information Technology Industry Overview (Contd ): Contribution of Various Sectors to Indian IT-BPM Exports in FY16 Share Of Indian IT-BPM Exports to Various Countries in FY16 2% 2% 2% 5% 3% 10% 41% 11% 8% 2% 16% 17% 62% 18% BFSI Manufacturing Healthcare Construction& Utilities Others HI-Tech/Telecom Retail Travel & transportation MPE USA UK Continental Europe Asia Pacific Rest of the World Factors contributing to growth of India as an IT-BPM service delivery location: A connected and a digital ready market Maturity-Excellence in business delivery High volume of diverse, employable talent World s fastest growing Digital Hub Expected Increase in Revenue of the Indian IT Services Industry in FY16 80 9% 60 13 14 40 20 55 61 0 FY15 FY16E Export (USD bn) Domestic (USD bn) IPO UPDATE 4
Company Introduction: Larsen and Toubro Infotech Ltd. (L&TIL) is a global IT services and solutions company. Incorporated in 1996, it is headquartered in Mumbai, India. The company is promoted by Larsen & Toubro Ltd. (L&T) a leading Indian conglomerate. In 2015, NASSCOM ranked L&TIL as the 6th largest Indian IT service company in terms of export revenue. It was ranked amongst the top 20 IT service providers globally according to Everest Group s PEAK Matrix for IT service providers. The company s clientele comprises of some of the world s largest and well known organizations, including 49 of the Fortune Global 500 companies. Percentage of Revenue from Continuing Operations Sector Wise Revenue Contribution FY14 FY15 FY16 Banking and Financial Services (BFS) 26.0% 27.1% 26.3% Insurance 18.8% 20.0% 20.7% Energy and Process 22.0% 16.2% 12.7% Consumer Packaged Goods, Retail and Pharmaceuticals 8.4% 9.3% 9.3% Hi-Tech and Consumer Electronics 7.4% 6.9% 5.2% Automotive & Aerospace 4.2% 5.7% 6.8% Media & Entertainment 4.6% 5.4% 6.2% Others * 8.6% 9.4% 12.8% Total 100.0% 100.0% 100.0% * Others includes plant equipment, utilities, engineering & construction and travel & logistics; L&TIL operates via a Business to IT Connect business model, which it derives from the commonality of business verticals with its promoter L&T. The company prices its IT services on a fixed price model or time & materials model. The range of services provided by L&TIL to the various verticals it operates in, includes application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions and platform-based solutions. The company services its clients across various verticals by leveraging its domain expertise, diverse technological capabilities, wide geographical reach, an efficient global delivery model and new age digital offerings. During FY16, L&TIL had 258 active clients, including 49 of the Fortune Global 500 companies and as of May 31, 2016, it had 22 delivery centers (nine in India and 13 outside India) and 41 sales offices globally. In the BFS vertical, Citibank accounted for 14.9% and 14.1% of revenue from continued operations in FY16 and FY15, respectively, making it one of the largest client for L&TIL. Revenue Contribution from Various Service Lines Service Lines FY14 FY15 FY16 Application Development, Maintenance and Outsourcing 43.0% 43.4% 42.4% Enterprise Solutions 27.5% 24.8% 23.7% Infrastructure Management Services 8.0% 8.7% 9.7% Testing 8.5% 9.5% 9.8% Digital Solutions * 7.5% 9.5% 11.1% Platform Based Solutions 5.5% 4.1% 3.3% Total 100.0% 100.0% 100.0% * Digital Solutions includes analytics & information management, enterprise integration and mobility; IPO UPDATE 5
Company Introduction (Contd ): Geographical Revenue Contribution Region FY14 FY15 FY16 North America 67.3% 68.6% 69.0% Europe 20.1% 17.9% 17.4% Asia Pacific 2.6% 2.4% 2.0% India 3.4% 4.2% 5.8% Rest of the World 6.6% 6.9% 5.8% Business Model: L&TIL s Business-to-IT Connect model primarily leverages the domain experience and institutional knowledge of the L&T group across industries to assist in the development and delivery of IT services and solutions that benefit its clients. The Business-to-IT Connect model is supplemented by the knowledge sharing of subject matter experts from L&T group companies to facilitate the development of solutions driven by business context and domain expertise. In addition to this L&TIL also incorporates a global delivery model that allows it to deliver on-site and offshore-based IT services to clients. Competitive Strengths: A strong business model: L&TIL s business model provides it with an advantage over its competitors, as it is able to capitalize on strategic opportunities at a faster pace owing to the readily available domain and institutional knowledge at its disposal. Over the past 10 years, the company has built a strong domain orientation across the business verticals in the way it approaches clients with solutions to their business objectives and the way it delivers services to clients. Brand equity of L&T, its promoter: The L&T brand is one of the most respected brands in India, which provides L&TIL with an advantage in attracting talent and new clients, exploring potential business opportunities and establishing itself as a thought partner with the top management of many global corporations. The strong parentage of L&T has contributed towards the growth of the company in the IT industry and will continue to assist L&TIL in achieving its strategic objective. Extensive portfolio of IT services and solutions along with long term client relationships: L&TIL has an extensive portfolio of IT services that it offers to clients to address their different business and technology needs. The company s clientele include mainly leading businesses, including 49 of the Fortune Global 500 companies. L&TIL has a history of high client retention. In FY16, FY15 and FY14 it generated 96.9%, 98.1% and 96.9%, respectively, of its revenue from existing client. As of March 30, 2016, the company had been engaged with over 100 clients for more than three years and has been conducting business with two of its largest clients for over ten years. Focus on emerging technologies: L&TIL invests in new technologies and tracks new business trends and believes that every industry will increasingly adopt digital as a key component of its overall IT solutions and services expenditure. In recent times the company has aligned its existing areas of expertise and have created focused initiatives in developing capabilities in emerging technologies, which it eventually plans to offer under a specific brand. In FY16 and FY15, the digital solutions line represented 11.1% and 9.5%, respectively, of the company s revenue from continuing operations. Track record of established process and executing of large, end to end, mission critical projects: L&TIL enjoys a track record of executing a number of large, end to end, mission critical projects in diverse business areas and technology domains for clients. The company has successfully competed globally to win projects and its success in such engagements has enhanced its reputation in the global marketplace. IPO UPDATE 6
Business Strategy: Focus on a targeted client portfolio: L&TIL intends to continue building long term sustainable business relationships with its existing clients in order to generate greater revenue. The company plans to have an optimal client portfolio to better focus and serve clients across geographies and industries in which it operates. L&TIL s ability to establish and strengthen relationships and expand services offered to clients will help increase its revenue and profits. Targeting higher total contract value: The company is targeting clients who have the potential to offer opportunities with large total contract values. L&TIL intends to originate large engagements by either identifying opportunities with existing clients or by targeting new clients whose existing engagements with IT vendors are up for renewal. The company plans to achieve higher value client portfolio by focusing on annuity applications and infrastructure management service deals, which tend to be long term in nature. Strengthening the L&TIL brand in the Indian and global IT service market: L&TIL intends to further strengthen its brand by continuing to deliver high quality services to its clients, enhancing its market positions in which it operates and becoming a thought partner to its clients. The company believes that its established record of excellence, the foregoing initiatives and the listing of equity shares will enhance the visibility of its brand and contribute to its recruitment and retention initiatives and strengthen L&TIL recognition as a leader in the Indian IT service industry. Expanding geographical presence: Historically, the company has been dependent on North America and Europe for most of its revenues i.e. 69% and 17.4% of its revenue originated from these regions in FY16. While the company intends to continue its expansion in the US and Europe, it also plans to expand its geographical presence in markets identified as having potential such as Australia, Singapore, Japan, South Africa and the Middle East. L&TIL is also currently contemplating pursuing strategic acquisitions in the German, France and Nordic region. Expand focus on infrastructure management service offering: L&TIL aims to leverage its Business 1st approach with respect to on infrastructure management service (IMS), which provides extensive services to clients inter alia using application development, maintenance, support and testing services, which collectively assist clients automate their business processes through customized service delivery plans that are aligned with their business needs and objectives. In addition, the company is currently looking for strategic acquisition opportunities in relation to its IMS business. Risk and Concerns: Concentration of revenue among few clients: L&TIL currently derives a significant portion of its revenue from a limited number of corporate clients. The companies ten largest clients accounted for approximately 52.7%, 49.5% and 46.8% of its revenue from continued operations in FY16, FY15 and FY14, respectively. Since the revenue of the company to a large extent depends on a limited number of clients, loss of a major client can lead to decline in revenues. Exchange rate fluctuations could negatively impact business, financial conditions and result from operations: The company transacts a significant portion of its business in several foreign currencies, primarily USD and EURO. Approximately 94.2%, 95.8% and 95.3% of revenue from operations in FY16, FY15 and FY14, respectively, were derived from sales outside India. The exchange rate between the INR and foreign currencies has fluctuated significantly in recent years and may continue to fluctuate in the future. Any significant appreciation of INR against foreign currencies in which L&TIL conducts business can fundamentally affect its competitiveness in the long-term as all risks associated with such fluctuations have to be borne by the company. Immigrations policies of countries, where it operates: Challenges in relation to immigration may affect the company s ability to compete for, and provide services to, clients in the US and/or other countries, partly because L&TIL may be required to hire locals instead of using its existing work force, which could result in lower profit margins, delays in, or losses of, client engagements and otherwise adversely affect its ability to meet growth, revenue and profit projections. Profitability to dip if the company is not able to maintain favorable employee utilization: L&TIL s profitability and cost of providing services depends upon the utilization of employees. In FY16, FY15 and FY14, the employee (excluding trainees) utilization stands at 75.7%, 75.8%, and 73.6%, respectively. For some reason, if the company is not able to maintain high employee utilization, its profit margins and profitability may suffer. Wages in India: Wage increase in India may diminish L&TIL s competitive advantage against companies located in the US and Europe and result in lower profit margins. The wage costs in India have historically been lower than the wage costs in the US and Europe for comparably skilled labour and this has been one of this sector s competitive advantages. Any wage increase will affect the sustainability of this advantage. IPO UPDATE 7
Peer comparison and our recommendation: Company Name Face Value CMP Total Operating EBITDA EBITDA PAT Margin MCAP (Rs. mn) PAT (Rs. mn) (Rs.) (Rs.) Revenue (Rs. mn) (Rs. mn) Margin (%) (%) Larsen & Toubro Infotech Ltd. 1 710 120,589 58,471 10,356 9,222 17.7% 15.8% Tata Consultancy Services Ltd. 1 2,483 4,891,981 1,086,462 305,898 242,918 28.2% 22.4% Infosys Ltd. 5 1,175 2,699,944 624,410 171,290 136,780 27.4% 21.9% Wipro Ltd. 2 562 1,388,911 512,478 105,829 89,597 20.7% 17.5% HCL Technologies Ltd. 2 738 1,040,579 409,130 89,150 74,520 21.8% 18.2% Tech Mahindra ltd. 5 514 497,261 264,942 43,184 31,180 16.3% 11.8% Hexaware Technologies Ltd. 2 229 69,140 32,303 5,281 3,940 16.3% 12.2% Mindtree Ltd. 10 679 113,876 46,896 8,304 6,033 17.7% 12.9% Average 21.2% 16.7% Company Name EPS (Rs.) BVPS DPS Debt Equity RoCE P / E P / B EV / Sales EV / EBITDA RoE (%) (Rs.) (Rs.) Ratio (%) (x) (x) (x) (x) MCAP / Sales (x) Larsen & Toubro Infotech Ltd. 54.3 119.1 32.2 0.0 45.6% 36.9% 13.1 6.0 2.0 11.5 2.1 Tata Consultancy Services Ltd. 123.3 334.3 43.5 0.0 36.9% 42.8% 20.1 7.4 4.4 15.8 4.5 Infosys Ltd. 59.5 269.0 24.2 0.0 22.1% 25.6% 19.7 4.4 3.8 13.9 4.3 Wipro Ltd. 36.3 189.5 6.0 0.3 19.1% 18.4% 15.5 3.0 2.8 13.4 2.7 HCL Technologies Ltd. 52.8 195.7 30.0 0.0 27.0% 28.6% 14.0 3.8 2.3 10.7 2.5 Tech Mahindra ltd. 32.2 163.3 12.0 0.1 19.7% 21.5% 15.9 3.1 1.7 10.6 1.9 Hexaware Technologies Ltd. 13.1 47.5 8.8 0.0 27.5% 32.5% 17.5 4.8 2.0 12.4 2.1 Mindtree Ltd. 36.0 142.8 10.5 0.0 25.2% 27.8% 18.9 4.8 2.4 13.4 2.4 Average 50.5 191.7 19.3 0.1 25.4% 28.2% 17.4 4.5 2.8 12.9 2.9 At the higher price band of Rs. 710 per share, L&TIL s share is valued at a P/E multiple of 13.1x (to its restated FY16 EPS), which is at a discount to the average P/E multiple of 17.4x of peers such as Tata Consultancy Services Ltd., Infosys Ltd., Wipro Ltd., HCL Technologies Ltd., Tech Mahindra Ltd., Hexaware Technologies Ltd. and Mindtree Ltd. Moreover, on EV/EBITDA front too, the company is priced at a discount to its peers. However, on P/BVPS front, it is available at a premium to its peers. Below are few key observations of the issue: L&TIL is a global IT service company promoted by L&T, which has a 94.9% stake (pre-issue) in the company which will reduce to 84.6% post-issue. During FY16, L&TIL had 258 active clients, including 49 Fortune Global 500 companies. The company has a history of high client retention with 96.9% of its revenue being generated from existing clients. The impact of BREXIT is likely to be muted for L&TIL as its exposure to Europe is 17.4% of its revenue, of this exposure Nordic countries such as Denmark, Finland, Sweden and Iceland accounted for 11% of revenue. L&TIL s business model ( Business-to-IT Connect ) enables it to leverage the domain expertise and institutional knowledge of the L&T group in providing IT solutions and services that benefit its clients. On the financial front, the company has reported a topline CAGR of 16.4% over FY12-16. In FY16, the company has reported a PAT margins of 15.8% in FY16. On the debt front, LT&IL is almost debt free. The company has a RoE of 45.6% in FY16 which is higher than its peers. Although declining margins and high revenue concentration are a risk for the company, given its strong parentage, business model, muted impact of BREXIT, history of client retention and attractive valuation, we assign a SUBSCRIBE rating for the issue. Retail investors are offered a discount of Rs.10 per equity share. IPO UPDATE 8
Financial Statements: Consolidated Profit and Loss Statement Particulars (Rs. mn) FY12 FY13 FY14 FY15 FY16 Revenue from Operation 31,820.2 38,514.4 49,205.0 49,780.4 58,470.6 Employee Benefit Expenses (18,635.3) (22,485.9) (27,581.6) (29,242.7) (35,346.6) Operating Expenses (2,575.3) (2,920.0) (4,891.5) (4,885.6) (6,710.8) Sales, Administration and Other Expenses (3,711.9) (4,403.6) (5,259.1) (5,607.4) (6,057.1) EBITDA 6,897.6 8,704.9 11,472.8 10,044.6 10,356.2 Depreciation of Tangible Assets (449.8) (508.9) (589.0) (741.6) (736.7) Amortization of Intangible Assets (598.8) (722.8) (710.7) (837.9) (1,002.9) EBIT 5,849.0 7,473.2 10,173.1 8,465.2 8,616.6 Finance Costs (342.4) (208.1) (305.3) (104.2) (103.6) Other Income 95.8 221.0 (833.2) 915.0 2,959.6 PBT 5,602.4 7,486.2 9,034.6 9,276.0 11,472.7 Less: PBT from Discontinued Operations (707.8) (493.2) (9.7) PBT from Continued Operations 5,602.4 6,778.4 8,541.4 9,266.3 11,472.7 Tax Expenses (Continued Operations) (1,409.1) (1,678.0) (1,942.9) (1,666.2) (2,249.6) PAT (Continued Operations) 4,193.4 5,100.4 6,598.5 7,600.1 9,223.1 PAT (Discontinued Operations) 516.2 364.0 8.0 PAT Before Minority Interest 4,193.4 5,616.6 6,962.4 7,608.1 9,223.1 Minority Interest (0.6) (0.8) (1.9) (1.3) PAT Before Extraordinary Items 4,193.4 5,616.1 6,961.7 7,606.2 9,221.8 Extraordinary Items 3,002.4 79.1 PAT Before Adjustments 4,193.4 5,616.1 9,964.1 7,685.3 9,221.8 Adjustments 138.1 121.2 (680.7) 6.4 Restated Reported PAT 4,331.5 5,737.3 9,283.4 7,691.6 9,221.8 Consolidated Balance Sheet Statement Particulars (Rs. mn) FY12 FY13 FY14 FY15 FY16 Share Capital 161.3 161.3 161.3 161.3 169.8 Reserve and Surplus 10,892.4 13,226.7 15,941.7 20,102.2 20,057.0 Minority Interest 1.2 2.0 3.9 5.2 Long Term Borrowings 452.2 361.9 266.3 138.9 Deferred Tax Liabilities 118.3 207.2 413.9 238.0 1,206.3 Other Long Term Liabilities 2,022.2 1,256.9 729.1 538.4 1,250.5 Long Term Provisions 51.3 94.3 131.1 103.7 124.3 Short Term Borrowings 2,179.6 1,853.9 700.7 1,897.5 397.5 Current Maturities of Long Term Borrowings 56.5 120.6 133.1 138.9 147.2 Trade Payables 2,015.0 2,065.2 2,414.8 2,719.5 3,276.4 Other Current Liabilities 1,712.3 2,520.3 3,735.9 1,723.5 2,765.0 Short Term Provision 1,618.4 1,786.0 2,376.6 2,815.4 5,170.9 Total Liabilities 21,279.5 23,655.6 27,006.4 30,581.1 34,570.1 Tangible Assets 2,263.4 2,449.9 2,794.7 2,749.8 2,791.9 Intangible Assets 4,058.7 4,540.8 3,693.1 4,084.5 3,583.2 Capital Work - in - Progress 100.6 483.2 94.4 53.3 7.0 Intangible Assets Under Development 975.2 940.3 472.7 198.5 188.4 Non Current Investments 20.0 Deferred Tax Asset 21.3 59.1 1.9 10.3 2.4 Long Term Loans and Advances 1,366.8 1,931.6 2,534.8 2,439.8 4,249.1 Current Investments 570.5 486.6 1,687.8 1,035.5 429.2 Trade Receivables 6,845.5 7,410.5 9,309.9 10,901.2 11,659.9 Unbilled Revenue 895.1 1,333.5 1,194.2 1,544.5 3,787.9 Cash and Bank Balance 1,321.1 1,193.7 1,589.1 2,009.2 2,033.7 Short - Term Loans and Advances 2,841.4 2,826.3 3,633.8 5,554.5 5,837.5 Total Assets 21,279.5 23,655.6 27,006.4 30,581.1 34,570.1 IPO UPDATE 9
Financial Statements (Contd ): Consolidated Cash Flow Statement Particulars (Rs. mn) FY12 FY13 FY14 FY15 FY16 Cash Flow from Operating Activities 3,363.2 6,076.5 6,278.6 6,422.5 8,633.0 Cash Flow from Investing Activities (971.2) (2,241.8) 1,803.3 (1,028.6) (441.4) Cash Flow from Financing Activities (2,533.3) (3,962.1) (7,686.5) (4,973.8) (8,167.2) Net Cash Flow (141.3) (127.4) 395.4 420.1 24.5 Opening Balance of Cash & Cash Equivalents 1,462.4 1,321.1 1,193.7 1,589.1 2,009.2 Closing Balance of Cash & Cash Equivalents 1,321.1 1,193.7 1,589.1 2,009.2 2,033.7 Consolidated Financials Ratios Particulars (Rs. mn) FY12 FY13 FY14 FY15 FY16 Revenue Growth 21.0% 27.8% 1.2% 17.5% EBIDTA Growth 26.2% 31.8% -12.4% 3.1% EBIDTA Margin 21.7% 22.6% 23.3% 20.2% 17.7% EBIT Growth 27.8% 36.1% -16.8% 1.8% EBIT Margin 18.4% 19.4% 20.7% 17.0% 14.7% Reported PAT Growth 32.5% 61.8% -17.1% 19.9% Reported PAT Margin 13.6% 14.9% 18.9% 15.5% 15.8% Liquidity Ratios Current Ratio 2.2 2.0 1.8 2.8 2.1 DER ratio 0.2 0.2 0.1 0.1 0.0 Turnover Ratios Receivable Turnover Ratio 4.6 5.2 5.3 4.6 5.0 Accounts Payable Turnover Ratio 15.8 18.6 20.4 18.3 17.8 Fixed Asset Turnover Ratio 4.3 4.6 7.0 7.0 8.9 Total Asset Turnover Ratio 1.5 1.6 1.8 1.6 1.7 Working Capital Turnover Ratio 4.9 6.0 6.8 3.9 4.8 Return Ratios RoE (%) 39.2% 42.8% 57.6% 38.0% 45.6% RoA (%) 20.4% 24.3% 34.4% 25.2% 26.7% RoCE (%) 36.7% 43.2% 55.1% 36.3% 36.9% Per Share Data Restated BVPS 65.1 78.8 94.8 119.3 119.1 Restated Diluted EPS 25.5 33.8 54.7 45.3 54.3 Restated Cash EPS 31.7 41.0 62.3 54.6 64.5 Restated Operating Cash Flow Per Share 19.8 35.8 37.0 37.8 50.8 Restated Dividend per Share 15.0 17.8 32.5 28.3 32.2 * Represents per share calculation based on number of shares o/s post issue; IPO UPDATE 10