In our view positives like a economic recovery in the

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Unformatted text preview: trades at a ~24% premium to Infosys, and we believe this will likely continue. Risks We identify three industry-level risks: a) a more severe-than-anticipated global slowdown, b) global vendor competition, and c) aggressive steps taken by global vendors to adopt the offshore model and increasing wage inflation with supply-side issues. For TCS, the key company-specific downside risks remain that of relatively high exposure to the BFSI vertical and the consequent compression of its earnings multiple due to greater impact of the turmoil in financial markets. Deutsche Bank AG/Hong Kong Page 21 7 January 2014 Software & Services Indian IT Services Fiscal year end 31-Mar Model updated:06 January 2014 Running the numbers 2011 2012 2013 2014E 2015E 2016E 44.53 44.53 25.00 129.8 54.35 54.35 31.00 166.2 71.23 71.23 22.00 209.3 96.38 96.38 25.00 273.1 117.45 117.45 31.00 350.8 138.57 138.57 38.00 442.4 1,957 1,860,525 1,782,668 1,957 2,206,053 2,110,494 1,957 2,546,603 2,453,780 1,957 4,383,392 4,174,756 1,957 4,383,392 4,073,342 1,957 4,383,392 3,942,629 P/E (DB) (x) P/E (Reported) (x) P/BV (x) 21.3 21.3 9.11 20.7 20.7 7.03 18.3 18.3 7.51 23.2 23.2 8.20 19.1 19.1 6.39 16.2 16.2 5.06 FCF Yield (%) Dividend Yield (%) 2.6 2.6 2.4 2.8 2.1 1.7 4.1 1.1 4.1 1.4 5.1 1.7 4.8 15.9 17.0 4.3 14.6 15.6 3.9 13.6 14.4 5.1 16.4 17.3 4.1 13.7 14.5 3.4 11.4 12.1 373,245 173,872 111,984 7,214 0 104,770 5,007 0 0 317 110,093 21,738 1,191 0 87,164 488,938 230,165 144,177 9,036 0 135,141 8,236 0 0 -4,195 139,182 31,688 1,110 0 106,384 629,895 297,351 180,872 10,792 0 170,080 10,722 0 0 451 181,252 40,344 1,494 0 139,414 822,828 396,856 254,860 13,566 0 241,295 13,299 0 0 -4,162 250,431 60,616 1,178 0 188,638 985,818 474,321 297,609 17,424 0 280,185 22,294 0 0 0 302,479 72,595 0 0 229,884 1,175,016 562,539 345,590 20,480 0 325,111 31,737 0 0 0 356,847 85,643 0 0 271,204 0 87,164 0 106,384 0 139,414 0 188,638 0 229,884 0 271,204 67,201 -18,774 48,427 7,527 -51,488 2,686 -1,872 5,279 21,899 75,622 -...
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This document was uploaded on 02/06/2014.

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