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Unformatted text preview: management in engagements and the impressive improvement in the quality of delivery. In most cases, this is compelling corporates to look at Tech Mahindra favorably, which increases its chances of signing business with new customers and winning back Satyam’s customers that had walked away following the fraud announcement by management in 2009. Expect TechM to report 17% USD revenue growth in FY15E We forecast TechM would report USD revenue growth of 17% yoy in FY15E (vs. 14.7% yoy in FY14E). Better customer acquisition and mining would be the key catalyst. Cessation of BT revenue amortization is unlikely to impact growth adversely in our view. Research Analyst (+91) 22 7180 4037 [email protected] Price/price relative 2000 1600 1200 800 400 1/12 7/12 1/13 BSE 30 (Rebased) Performance (%) 1m 3m 12m Absolute 8.5 30.0 93.0 -0.7 4.7 5.4 BSE 30 Source: Deutsche Bank Stock data Market cap (INRm) Market cap (USDm) Shares outstanding (m) Major shareholders Free float (%) Avg daily value traded (USDm) 219,936 3,523 210.0 M&M (44.4%) 16 32.5 Source: Deutsche Bank Key indicators (FY1) ROE (%) Net debt/equity (%) Book value/share (INR) Price/book (x) Net interest cover (x) Target P/E of 14x FY15E Our revised target price is based on a target P/E of 14x FY15E, which we believe is fair given earnings CAGR of 13.9% over FY14-16E and a PEG of 1.0. 7/13 Tech Mahindra Ltd Operating profit margin (%) 32.6 -36.8 502.88 3.6 – 19.3 Source: Deutsche Bank Forecasts And Ratios Year End Mar 31 Sales (INRm) EBITDA (INRm) Reported NPAT (INRm) Reported EPS FD(INR) DB EPS FD(INR) DB EPS growth (%) PER (x) EV/EBITDA (x) DPS (net) (INR) Yield (net) (%) 2012A 2013A 2014E 2015E 2016E 118,853.1 143,320.0 186,947.4 216,048.8 252,645.3 18,729.1 30,631.0 41,002.0 43,185.2 49,026.3 19,037.6 19,553.3 29,702.5 32,977.4 38,567.4 89.80 92.23 140.11 155.55 181.92 89.80 92.23 140.11 155.55 181.92 40.3 2.7 51.9 11.0 17.0 7.2 9.3 13.0 11.7 10.0 5.8 4.6 3.9 3.1 2.0 2.18 2.19 2.21 2.21 2.21 0.3 0.3 0.1 0.1 0.1 Source: Deutsche Bank estimates, company data 1 DB EPS is fully diluted and excludes non-recurring items 2 M...
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This document was uploaded on 02/06/2014.

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