CMP 1825.00

Target Price 2007.00

ISIN: INE669C01028

MAY 16th

2014

TECH MAHINDRA LIMITED Result Update: Q4 FY14

BUYBUYBUYBUY

Index Details

Stock Data

Sector IT

BSE Code 532755

Face Value 10.00

52wk. High / Low (Rs.) 1936.35/895.25

Volume (2wk. Avg.) 69000

Market Cap (Rs. in mn.) 426082.75

Annual Estimated Results (A*: Actual / E*: Estimated)

YEARS FY14A FY15E FY16E

Net Sales 188313.80 222210.28 253319.72

EBITDA 42967.80 51240.75 58568.30

Net Profit 30288.10 33156.35 37860.21

EPS 129.73 142.02 162.16

P/E 14.07 12.85 11.25

Shareholding Pattern (%)

1 Year Comparative Graph

TECH MAHINDRA LTD S&P BSE SENSEX

SYNOPSIS

Tech Mahindra Ltd and Mahindra Satyam Ltd announced the formal amalgamation of Mahindra Satyam with Tech Mahindra. This amalgamation has become effective from June 24th, 2013.

For Q4 FY14, Tech Mahindra reported consolidated revenue of Rs. 50581.10 mn, up 34.3% YoY and 3.3% QoQ,

During the quarter, Operating profit (EBITDA) excluding other income of the Company was Rs. 10718.50 mn; up 39% YoY.

During Q4 FY14, the Company has registered a consolidated net profit was Rs. 6142.10 mn.

Debt and Cash equivalent of the company at Rs. 3630 mn and Rs. 35990 mn as on March 31, 2014. Active Client count stood at 629 vs 516 in FY13.

Consolidated revenue for the year ended 31 March, 2014 at Rs. 188313.8 mn; up 31.4% YoY.

Consolidated Profit after Tax (PAT) for the year ended 31 March, 2014 at Rs. 30288.1 mn; up 54.9% YoY.

The Company won contracts with a total value of USD 270 mn during the quarter and more than USD 1 billion for the year.

Tech Mahindra Ltd has recommended dividend of Rs. 20 per Equity Share on Face Value of Rs. 10/- each (200%), for the financial year ended March 31, 2014.

Tech Mahindra GmbH, Düsseldorf, a wholly owned business subsidiary of Tech Mahindra, signed an agreement with BASF Business Services Holding GmbH to acquire its business with third party customers.

Tech Mahindra has entered in to an agreement to acquire a majority stake in Fixed Stream Networks Inc (FSNI), a technology startup company.

Net Sales and PAT of the company are expected to grow at a CAGR of 54% and 68% over 2013 to 2016E respectively.

PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND

Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

Tech Mahindra Ltd 1825.00 426082.75 129.73 14.07 4.64 200.00

TCS Ltd 2163.00 4226935.00 93.48 23.09 13.02 3200.00

Wipro Ltd 502.35 1242879.30 29.69 16.97 5.13 400.00

Infosys Ltd 3185.00 1830090.70 177.52 17.95 3.96 1260.00

Recommendation & Analysis - ‘BUY’

For Q4 FY14, Tech Mahindra reported consolidated revenue of Rs. 50581.10 mn, up 34.3% YoY and 3.3% QoQ,

helped by strong growth in its telecom and manufacturing business. During the quarter, Operating profit

(EBITDA) excluding other income of the Company was Rs. 10718.50 mn; up 39% YoY. Operating profit margin

stood at 21.3% at the end of the quarter. During Q4 FY14, the Company has registered a consolidated net profit

was Rs. 6142.10 mn. Earnings per Share were Rs. 26.31 for the quarter ended March 31, 2014. Debt was at Rs.

3630 mn as on March 31, 2014. Cash and Cash equivalent was at Rs. 35990 mn as of March 31, 2014. Active

Client count stood at 629 vs 516 in FY13.

The Company won contracts with a total value of USD 270 mn during the quarter and more than USD 1 billion

for the year. Currently, Tech Mahindra seeing traction in Europe and Africa, but better traction in greater

potential places like Australia, New Zealand, and United States will be good. Tech Mahindra will aim to almost

double the turnover to $5 billion by 2015 with focus on telecom, manufacturing and BFSI (banking, financial

services, insurance). Over FY2013-16E, we expect the company to post a CAGR of 54% and 68% in its top-line

and bottom-line respectively. Hence, we recommend ‘BUY’ for ‘TECH MAHINDRA LTD’ with a target price of

Rs. 2007.00 for medium to long term investment.

QUARTERLY HIGHLIGHTS (CONSOLIDATED)

Results updates- Q4 FY14,

Tech Mahindra Ltd offers innovative and customer-

centric information technology services and

solutions, enabling Consulting, Enterprise and

Telecom solutions including global customers,

reported its financial results for the quarter ended

31st March, 2014.

Months Mar-14 Dec-13 % Change

Net Sales 50581.10 48985.50 3.26

Net Profit 6142.10 10098.20 (39.18)

EPS 26.31 43.31 (39.26)

EBITDA 9852.20 10906.00 (9.66)

The company’s net profit declines to Rs. 6142.10 million against Rs. 10098.20 million in the proceeding quarter

ended 31st Dec, 2013, a decrease of 39.18%. Revenue for the quarter rose by 3.26% to Rs. 50581.10 million from

Rs. 48985.50 million in Q3 FY14. Reported earnings per share of the company stood at Rs. 26.31 a share during

the quarter, registering 39.26% decrease over proceeding quarter ended 31st Dec, 2013. Profit before interest,

depreciation and tax is Rs. 9852.20 million as against Rs. 10906.00 million in the proceeding quarter ended 31st

Dec, 2013. The results for the quarter ended 31st March, 2014 are consolidated results of Tech Mahindra Ltd

(including merged companies and subsidiaries of its merged companies) while results for the previous quarter

ended 31st March, 2013 and previous year are consolidated results of Tech Mahindra Ltd and its subsidiaries and

an associate hence the same are not comparable.

Break up of Expenditure

Break up of

Expenditure

Rs. In Millions

Q4 FY14 Q3 FY14 %

Change

Travelling Expenses 2061.50 2167.00 -5%

Other Expenditure 3269.50 5822.90 -44%

Services Rendered By

Business Associates

& Others

5165.80 5070.40 2%

Employee Benefit

Expenses 26365.80 24562.20 7%

Depreciation &

Amortization

Expense

1429.40 1396.20 2%

Total Expenditure 41292.00 39018.70 6%

Segment Revenue

Latest Updates

• Tech Mahindra Ltd has recommended dividend of Rs. 20 per Equity Share on Face Value of Rs. 10/- each

(200%), for the financial year ended March 31, 2014.

Key wins for the Quarter ended March 31, 2014

• Tech Mahindra won a landmark deal with Volvo Car Corporation, one of the leading automotive companies in

Nordics to manage its end to end IT infrastructure. Deal encompassed providing operational excellence,

delivering key projects successfully to support growth and business value realization

• Engaged by one of the top financial services company based in USA to provide managed services in areas of

customer operations support, customer implementation services, security and testing.

• A leading European aerospace and defense Company has chosen Tech Mahindra for its after-market services.

Tech Mahindra’s offshore customer services center would facilitate management of multiple suppliers of

customer while achieving cost optimization this aiding growth.

• Selected by a leading mobile service provider in New Zealand for implementation and managed services of its

Business Support System (BSS). Tech Mahindra will help streamline customers systems, functionalities and

cost; thus enabling it to achieve a competitive edge in a saturated market.

• A state-level government agency in the United States chose Tech Mahindra to implement its Motor Vehicle

Enterprise System (MOVES), a configurable Microsoft Dynamics CRM-based solution. The solution will help

replace and modernize the organization’s existing legacy system.

• Entered into a managed services agreement with a leading UK based telco for managing its Information

Communication Technology (ICT) operations. Tech Mahindra as a Technology partner will operate and

enhance the legacy ICT stack.

• Engaged by a fortune 25 Global Conglomerate to provide infrastructure support. Tech Mahindra will provide

seamless support to all the businesses within the client organization by consolidating the infrastructure,

processes, tools and vendors, helping instill end to end ownership, automate processes and high service

delivery.

• A Fortune 500 Healthcare products Company selected Tech Mahindra for Managed Services of its Operations,

Project management and Change management services encompasses enabling business change, continuous

improvement and IT enabled transformation projects.

• A global Australian resources company has selected Tech Mahindra to provide Support Services for its

integration middleware enterprise software.

• Chosen by a Fortune 500 organization and one of the largest banks in ANZ region, to implement FATCA

Solution to help them observe complex regulatory requirements and meet stringent timelines as set up by

government agencies.

• Selected by a Fortune 500 Banking and Investment Group to implement Enterprise Datawarehouse on

Microsoft BI Technology using iDecisions.

Business Highlights for the Quarter ended March 31, 2014

• Tech Mahindra GmbH, Düsseldorf, a wholly owned business subsidiary of Tech Mahindra, signed an

agreement with BASF Business Services Holding GmbH to acquire its business with third party customers.

The acquisition will help strengthen Company’s footprint in Germany

• Tech Mahindra Ltd has entered in to an agreement to acquire a majority stake in Fixed Stream Networks Inc

(FSNI), a technology startup company

• Launched a new branch in Istanbul. The branch will serve as a hub for Turkey and Central Asia and aims to

provide specialized services to Tech Mahindra’s customers from this near shore center.

• Announced the opening of a new Belgian delivery center in Antwerp. This new facility is an important

milestone in the growth journey of Company with its emergent presence in the European markets.

• Launched Reference Data Management Solution in, a fully managed end-to-end reference data management

Business Process as a Service (BPaaS) solution for the financial services industry in North America.

• Inaugurated Texas Instrument lab in Bangaluru. The lab will allow Tech Mahindra to launch innovative

solutions based on the concept of Internet of Things (IoT) in Industrial, Medical and Automotive sectors.

• Launched Near Field Communication (NFC) Testing Lab which marks TechM’s foray into Enterprise Device

Testing. The lab will cater to the fast-growing needs of chipset manufacturers, OEMs, Service Providers,

Acquires and Issuers from the banking industry

Awards and Recognitions

• Tech Mahindra won the Best ICT Delivery Partner – Land Transport excellence Award 2014. The award

recognizes industry partners and individuals who have played a pivotal role in developing and transforming

Singapore’s transport system.

• Tech Mahindra won ‘Voice and Data Top Telecom Software company of the year'.

• Recognized with ‘Top Telecom Software Company of the Year’ award by Amity.

• Recognized as Indian Most Admired Knowledge Enterprise (MAKE) Winner for the year 2013.

Revenue by Geography

Client contribution to revenue

IT Business Revenue On/Off Break-up

Company Profile

Tech Mahindra is part of the US $16.7 billion Mahindra Group and is a leading global systems integrator and

business transformation consulting organization, focused primarily on the telecommunications industry. Tech

Mahindra expanded its IT portfolio in 2009 by acquiring the leading global business and information technology

services company, Mahindra Satyam (earlier known as Satyam Computer Services).

Tech Mahindra represents the connected world, offering innovative and customer-centric information

technology services and solutions, enabling Enterprises, Associates and the Society to Rise™, has revenue of USD

3.1 billion company with 89,000+ professionals across 51 countries, helping over 629 global customers including

Fortune 500 companies. Its Consulting, Enterprise and Telecom solutions, platforms and reusable assets connect

across a number of technologies to derive tangible business value.

A SEI-CMMi Level 5 organization, Tech Mahindra development centers serve global businesses in the United

States of America, Canada, Brazil, the United Kingdom, Germany, France, Hungary, Egypt, United Arab Emirates,

India, China, Malaysia, Singapore, and Australia and serves numerous clients, including many Fortune 500

organizations.

Tech Mahindra – Mahindra Satyam merger consummated

Tech Mahindra Limited, a specialist provider of information technology (IT) solutions and services to the

telecommunications industry, and Mahindra Satyam, a leading global consulting and IT services provider, has

announced that the formal amalgamation of Mahindra Satyam with Tech Mahindra. The Boards of Tech

Mahindra and Mahindra Satyam had approved the merger on Mar 21, 2012. After an approval from Mumbai high

court, the merger had been awaiting clearance from the Andhra Pradesh High Court, which gave the nod on Jun

11, 2013. This amalgamation has become effective from June 24th, 2013.

Services

• IT Services

It offers various services such as solution integration, application development and management, consulting,

application management, infrastructure management, and revenue management services.

• Research and Development services

It provides technological solutions such as software development, testing, hardware development, network

offering etc to leading telecom equipment manufacturers across the globe.

• BPO

It also provides outsourcing services in the areas finance & accounting, HR Outsourcing, order management,

contract management, inventory management, are among others.

Global Presence

Tech Mahindra has a global footprint through operations in more than 31 countries with 17 sales offices and 15

delivery centers.

Tech Mahindra has principal offices in the UK, United States, Germany, UAE, Egypt, Singapore, India, Thailand,

Taiwan, Malaysia, Philippines, Canada and Australia

FINANCIAL HIGHLIGHT (CONSOLIDATED) (A*- Actual, E* -Estimations & Rs. In Millions)

Balance Sheet as at March31, 2013-2016E

TECH MAHINDRA LTD. FY13A FY14A FY15E FY16E

SOURCES OF FUNDS

Shareholder's Funds

Share Capital 1281.20 2334.70 2334.70 2334.70

Reserves and Surplus 52972.00 89468.90 122625.25 149602.80

1. Sub Total - Net worth 54253.20 91803.60 124959.95 151937.50

2. Share application money pending

allotment 2.80 14.90 16.39 17.21

3. Minority interest 1089.40 1438.20 1610.78 1771.86

Non Current Liabilities

Long term borrowing 3000.00 190.40 137.09 123.38

Other Long term Liabilities 2254.80 3757.40 4321.01 4753.11

Long Term Provisions 2062.80 4138.00 4634.56 5098.02

4. Sub Total - Non Current Liabilities 7317.60 8085.80 9092.66 9974.51

Current Liabilities

Short term borrowing 7804.00 334.10 350.81 371.85

Trade Payables 6401.20 14722.30 16930.65 18454.40

Other Current Liabilities 9805.10 18024.10 20006.75 21607.29

Short Term Provisions 3171.00 12668.50 14442.09 15886.30

5. Sub Total - Current Liabilities 27181.30 45749.00 51730.29 56319.85

6. Amount Pending Investigation Suspense

Account 0.00 12304.00 0.00 0.00

Total Liabilities (1+2+3+4+5+6) 89844.30 159395.50 187410.07 220020.92

APPLICATION OF FUNDS

Non-Current Assets

a) Sub Total - Fixed Assets 9382.40 22965.50 26639.98 30103.18

b) Non- Current Investments 39241.70 12193.50 10730.28 11803.31

c) Goodwill on consolidation 3407.20 5640.30 6881.17 8050.96

d) Long Term loans and advances 5380.40 9137.20 10781.90 12291.36

e) Deferred Tax Asset 1511.30 3830.00 4596.00 5285.40

f) Other non-current assets 10.00 157.30 179.32 199.05

1. Sub Total - Non Current Assets 58933.00 53923.80 59808.64 67733.26

Current Assets

Current Investment 1744.90 2524.80 3055.01 3543.81

Inventories 110.20 98.10 107.91 114.38

Trade receivables 17035.90 43485.50 53922.02 65773.21

Cash and Bank Balances 5357.50 33202.30 39178.71 45839.10

Short-terms loans & advances 4287.20 14544.20 17598.48 20942.19

Other current assets 2375.60 11616.80 13739.29 16074.97

2. Sub Total - Current Assets 30911.30 105471.70 127601.42 152287.66

Total Assets (1+2) 89844.30 159395.50 187410.07 220020.92

Annual Profit & Loss Statement for the period of 2013 to 2016E

Value(Rs.in.mn) FY13A FY14A FY15E FY16E

Description 12m 12m 12m 12m

Net Sales 68730.80 188313.80 222210.28 253319.72

Other Income -747.00 1130.40 1243.44 1318.05

Total Income 67983.80 189444.20 223453.72 254637.77

Expenditure -54488.40 -146476.40 -172212.97 -196069.47

Operating Profit 13495.40 42967.80 51240.75 58568.30

Interest -1030.40 -798.80 -575.14 -506.12

Gross profit 12465.00 42169.00 50665.62 58062.18

Depreciation -1999.60 -5221.80 -6579.47 -7763.77

Exceptional Items 0.00 1200.00 0.00 0.00

Profit Before Tax 10465.40 38147.20 44086.15 50298.41

Tax -2355.40 -7523.40 -10580.68 -12071.62

Profit After Tax 8110.00 30623.80 33505.47 38226.79

Minority Interest -196.21 -335.70 -349.13 -366.58

Share of Profit & Loss of Asso 4964.30 0.00 0.00 0.00

Net Profit 12878.09 30288.10 33156.35 37860.21

Equity capital 1281.20 2334.70 2334.70 2334.70

Reserves 52972.10 89468.90 122625.25 149602.80

Face value 10.00 10.00 10.00 10.00

EPS 100.52 129.73 142.02 162.16

Quarterly Profit & Loss Statement for the period of 30th Sep, 2013 to 30th June, 2014E

Value(Rs.in.mn) 30-Sep-13 31-Dec-13 31-Mar-14 30-Jun-14E

Description 3m 3m 3m 3m

Net sales 47714.90 48985.50 50581.10 53615.97

Other income 380.80 -457.00 -866.30 518.25

Total Income 48095.70 48528.50 49714.80 54134.22

Expenditure -36604.00 -37622.50 -39862.60 -42088.53

Operating profit 11491.70 10906.00 9852.20 12045.68

Interest -241.50 -236.10 -98.20 -80.52

Gross profit 11250.20 10669.90 9754.00 11965.16

Depreciation -1221.90 -1396.20 -1429.40 -1600.93

Exceptional Items 0.00 1200.00 0.00 0.00

Profit Before Tax 10028.30 10473.70 8324.60 10364.23

Tax -2840.10 -264.50 -2091.30 -2591.06

Profit After Tax 7188.20 10209.20 6233.30 7773.17

Minority Interest -3.90 -111.00 -91.20 -96.67

Net Profit 7184.30 10098.20 6142.10 7676.50

Equity capital 2323.90 2331.50 2334.70 2334.70

Face value 10.00 10.00 10.00 10.00

EPS 30.91 43.31 26.31 32.88

Ratio Analysis

Particulars FY13A FY14A FY15E FY16E

EPS (Rs.) 100.52 129.73 142.02 162.16

EBITDA Margin (%) 19.64% 22.82% 23.06% 23.12%

PBT Margin (%) 15.23% 20.26% 19.84% 19.86%

PAT Margin (%) 11.80% 16.26% 15.08% 15.09%

P/E Ratio (x) 18.16 14.07 12.85 11.25

ROE (%) 14.95% 33.36% 26.81% 25.16%

ROCE (%) 23.82% 52.19% 46.09% 43.52%

EV/EBITDA (x) 17.73 9.16 7.56 6.50

Book Value (Rs.) 423.46 393.21 535.23 650.78

P/BV 4.31 4.64 3.41 2.80

Charts

OUTLOOK AND CONCLUSION

� At the current market price of Rs.1825.00, the stock P/E ratio is at 12.85 x FY15E and 11.25 x FY16E

respectively.

� Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.142.02 and

Rs.162.16 respectively.

� Net Sales and PAT of the company are expected to grow at a CAGR of 54% and 68% over 2013 to 2016E

respectively.

� On the basis of EV/EBITDA, the stock trades at 7.56 x for FY15E and 6.50 x for FY16E.

� Price to Book Value of the stock is expected to be at 3.41 x and 2.80 x respectively for FY15E and FY16E.

We expect that the company surplus scenario is likely to continue for the next three years, will keep its

growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of

Rs.2007.00 for Medium to Long term investment.

INDUSTRY OVERVIEW

The Indian Information Technology (IT) and Information Technology enabled Services (ITeS) sectors go hand-in-

hand in every aspect. The industry has not only transformed India’s image on the global platform, but also fuelled

economic growth by energising higher education sector (especially in engineering and computer science). The

industry has employed almost 10 million Indians and hence, has contributed a lot to social transformation in the

country.

Furthermore, Indian firms, across all other sectors, largely depend on the IT & ITeS service providers to make

their business processes efficient and streamlined. Indian manufacturing sector has the highest IT spending

followed by automotive, chemicals and consumer products industries.

Market Size

India's IT-business process outsourcing (BPO) industry revenue is expected to cross US$ 225 billion mark by

2020, according to a Confederation of Indian Industry (CII).

India is expected to become world's second-largest online community after China with 213 million internet users

by December 2013 and 243 million by June 2014, according to Internet and Mobile Association of India (IAMAI)

and IMRB International.

Technology firms in India are expected to reap the benefits of Internet of Things (IoT) data, considered to be a

US$ 18 billion opportunity, to help clients improve productivity and asset utilisation as well as to enhance end-

customer experience, as per networking firm Cisco.

India’s total IT industry’s (including hardware) share in the global market stands at 7 per cent; in the IT segment

the share is 4 per cent while in the ITeS space the share is 2 per cent. India's IT and BPO sector exports are

expected to grow by 12-14 per cent in FY14 to touch US$ 84 billion - US$ 87 billion, according to Nasscom.

Moreover, India plans to spend around US$ 3.9 billion on cloud services during 2013-2017, of which US$ 1.7

billion will be spent on software-as-a-service (SaaS), according the latest outlook of IT research and advisory

company, Gartner Inc.

The enterprise software market in India is expected to reach US$ 3.92 billion in 2013, registering a growth of

13.9 per cent over 2012 revenue of US$ 3.45 billion, according to Gartner.

Mumbai with 12 million internet users has emerged as the top most city in the country with highest penetration

of internet users, followed by Delhi (8.1 million) and Hyderabad (4.7 million), according to the Internet & Mobile

Association of India (IAMAI).

Investments

Indian IT's core competencies and strengths have placed it on the international canvas, attracting investments

from major countries.

According to data released by the Department of Industrial Policy and Promotion (DIPP), the computer software

and hardware sector has attracted foreign direct investment (FDI) worth Rs 54,347.88 crore (US$ 8.77 billion)

between April 2000 and September 2013.

Some of the major investments in Indian IT and ITeS sector:

• Wipro plans to acquire US-based mortgage due diligence and risk management service provider Opus

Capital Markets Consultants (Opus CMC) for Rs 465 crore (US$ 75.07 million). Opus CMC provides

comprehensive risk management solutions to the mortgage industry in the US.

• Infosys has opened a new centre in Sydney, Australia. This is its fourth development centre in Australia

and has a capacity to seat 140 employees. Further, the company plans to hire 85 people in the region.

• Hitachi has acquired a foothold in India's payment space with the acquisition of Prizm Payment Services.

The firm has entered into share transfer agreements with Prizm shareholders, including Winvest

Holdings (India), Sequoia Capital and Axis Bank.

• Dell has opened its India design centre for its storage technologies and has realigned its domestic

research and development (R&D) unit. The facility will focus on developing software, integrating aspects

involving back-up of emails and related storage.

• Tata Consultancy Services (TCS) has launched a software development facility in Ahmedabad, Gujarat.

The facility will serve global customers across industry segments.

• Cognizant Technology Solutions has acquired ValueSource, a subsidiary of KBC Group, a Belgium-based

multi-channel bank insurance group.

• Schneider Electric has commissioned a services bureau in Bengaluru as a nerve centre and a support

facility for data centres in India and the Asia-Pacific region.

Government Initiatives

IT spending by the Government of India is projected to reach US$ 6.4 billion in 2013, a growth of 7 per cent year-

on-year, according to a report by Gartner.

Some of the major initiatives taken by the Government to promote IT and ITeS sector in India are:

• After a successful first-ever international delegation to Dubai, Gujarat-based small and medium

enterprises (SMEs) in the IT sector plan to send similar business delegations to European and South East

Asian countries.

• The Government of Karnataka plans to announce a new information technology (IT) policy to boost

investments in state’s tier-II and tier-III cities. The policy would enable the sector to employ about two

million people in the state directly by 2020.

• The Government of India has fast tracked the process of setting up of centres of National Institute of

Electronics and Information Technology (NIELIT) in Northeast India.

• The Government of Brazil has liberalised the issue of short term work visas, a move which will make it

easier for Indian IT professionals to take up assignments in Brazil.

• India and Vietnam have signed two memorandums of understanding (MoU) for partnership in the field of

information, communications and technology (ICT).

Road Ahead

Globalisation has a profound impact in shaping the Indian IT industry over the years with India capturing a

sizeable chunk of the global market for technology sourcing and business services. Over the years the growth

drivers for this sector have been the verticals of manufacturing, telecommunication, insurance, banking, finance

and of late the fledgling retail revolution. As the new scenario unfolds it is getting clear that the future growth of

IT and ITeS will be fuelled by the verticals of climate change, mobile applications, healthcare, energy efficiency

and sustainable energy. Traditional business strongholds would make way for new geographies, there would be

new customers and more and more of SMEs will go for IT application and services.

Demand from emerging countries is expected to show strong growth going forward. Tax holidays are also

extended to IT sector for software technology parks of India (STPI) and special economic zones (SEZs). Further,

the country is providing procedural ease and single window clearance for setting up facilities. The country’s cost

competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US continues to be

its USP in the global sourcing market.

Disclaimer:

This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale

of any financial instrument or as an official confirmation of any transaction. The information contained herein is

from publicly available data or other sources believed to be reliable but do not represent that it is accurate or

complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s affiliates shall

not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the

information contained in this report. This document is provide for assistance only and is not intended to be and must

not alone be taken as the basis for an investment decision.

Firstcall India Equity Research: Email – info@firstcallindia.com

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