Bhosaledbcom deutsche bank aghong kong page 31 7

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Unformatted text preview: m Absolute 11.0 14.2 98.5 BSE 30 -0.7 4.7 5.4 Source: Deutsche Bank Stock data Market cap (INRm) 864,648 Market cap (USDm) 13,849 Shares outstanding (m) Major shareholders Free float (%) Avg daily value traded (USDm) 699.2 Shiv Nadar & associates (50.2%) 28 23.9 Source: Deutsche Bank Expect HCL Tech to report 13.6% USD revenue growth in FY15E We forecast HCL Tech to report USD revenue growth of 13.6%yoy in FY15E (vs. 12.9% yoy in FY14E). We expect revenues from infrastructure management services to grow 22% yoy in FY15E. Key indicators (FY1) ROE (%) 33.0 Net debt/equity (%) Book value/share (INR) Target P/E of 12x FY15E We value the company at a P/E of 12x FY15E, supported by an earnings CAGR of 6.2% over FY14-16E. See risks in Investment thesis below. Price/book (x) -57.7 277.68 4.5 Net interest cover (x) Operating profit margin (%) – 21.5 Source: Deutsche Bank Forecasts And Ratios Year End Jun 30 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 210,312.0 257,336.0 326,011.4 359,208.3 404,031.1 40,251.0 58,356.0 78,401.2 80,662.8 86,844.7 25,257.0 40,984.0 55,656.6 58,372.4 62,449.2 36.36 58.01 78.16 81.44 87.12 36.36 58.01 78.16 81.44 87.12 53.9 59.5 34.7 4.2 7.0 12.1 11.2 16.0 15.4 14.4 7.4 7.0 9.6 8.6 7.2 8.00 8.00 8.00 8.00 8.00 1.8 1.2 0.6 0.6 0.6 Source: Deutsche Bank estimates, company data 1 DB EPS is fully diluted and excludes non-recurring items 2 Multiples and yields calculations use average historical prices for past years and spot prices for current and future years, except P/B which uses the year end close Page 32 Deutsche Bank AG/Hong Kong 7 January 2014 Software & Services Indian IT Services Investment Thesis Outlook We are worried about (a) a disproportionate contribution from run-the-business services like IMS, (b) tempered optimism on discretionary spending, (c) multiple operating margin headwinds in FY14E a...
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