CMP 1838.00

Target Price 2022.00

ISIN: INE669C01028

FEBRUARY 5th

2014

TECH MAHINDRA LIMITED Result Update: Q3 FY14

BUYBUYBUYBUY

Index Details

Stock Data

Sector IT

BSE Code 532755

Face Value 10.00

52wk. High / Low (Rs.) 1906.00/895.25

Volume (2wk. Avg.) 66000

Market Cap (Rs. in mn.) 428529.70

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

YEARS FY13A FY14E FY15E

Net Sales 68730.80 188677.62 218866.04

EBITDA 13495.40 45232.67 52831.69

Net Profit 12878.09 32248.94 35922.32

EPS 100.52 138.32 154.07

P/E 18.29 13.29 11.93

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.

During the quarter, Tech Mahindra has reported consolidated revenue of Rs. 48985.50 mn, up 33.5% YoY and 2.7% QoQ.

During the quarter, operating profit excluding other income of the Company was Rs. 11363.00 million; up 42.8 % YoY and 2.3% QoQ.

During Q3 FY14, the Company has registered a consolidated PAT was Rs. 10098.20 mn; up 214.1% YoY and 40.6% QoQ.

EPS was Rs. 43.47 for the quarter ended December 31, 2013.

Debt and Cash equivalent of the company at Rs. 3420 million Rs. 34590 million as on December 31, 2013 respectively.

During the quarter, Tech Mahindra Ltd has merged with Mahindra Engineering Services (MES).

The Company has launched Global Center of Excellence (CoE) with Hewlett Packard (HP) in Bangalore.

Tech Mahindra awarded a multi-year deal for application infrastructure transformation and application monitoring services by a leading bank from India.

A leading ASEAN Telco has partnered with Tech Mahindra in integration and enterprise information management space.

Tech Mahindra has selected by a leading telecommunications company in Australia for its OSS performance & capacity monitoring solutions.

Net Sales and PAT of the company are expected to grow at a CAGR of 58% and 88% over 2012 to 2015E 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 1838.00 428529.70 100.52 18.29 4.34 50.00

TCS Ltd 2191.05 4291670.90 85.24 25.70 13.22 2200.00

Wipro Ltd 559.80 1380291.50 26.17 21.39 5.70 350.00

Infosys Ltd 3581.55 2056655.50 167.46 21.39 5.70 840.00

Recommendation & Analysis - ‘BUY’

For Q3 FY14, Tech Mahindra reported consolidated revenue of Rs. 48985.50 mn, up 33.5% YoY and 2.7% QoQ.

During the quarter, Operating profit (EBITDA) excluding other income of the Company was Rs. 11363.00

million; up 42.8 % YoY and 2.3% QoQ. During Q3 FY14, the Company has registered a consolidated PAT was Rs.

10098.20 mn; up 214.1% YoY and 40.6% QoQ. Earnings per Share were Rs. 43.47 for the quarter ended

December 31, 2013. Debt was at Rs. 3420 million as on December 31, 2013. As on December 30, 2013 the Cash

and Cash equivalent of the company was Rs 34590 million. Active Client count stood at 605 in Q3 FY14 vs 576

in Q2 FY14.

The Company has launched its new branch in Istanbul to develop Turkey as a near shore centre for providing

specialized services to its customers in the region. This branch will serve as a hub for Turkey and Central Asia.

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 FY2012-15E, we expect the company to post a CAGR of 58% and 88% in its top-line and

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

2022.00 on the stock.

QUARTERLY HIGHLIGHTS (CONSOLIDATED)

Results updates- Q3 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 Dec, 2013.

Months Dec-13 Sep-13 % Change

Net Sales 48985.50 47714.90 2.66

Net Profit 10098.20 7184.30 40.56

EPS 43.31 30.91 40.10

EBITDA 10906.00 11491.70 (5.10)

The company’s net profit jumps to Rs. 10098.20 million against Rs. 7184.30 million in the proceeding quarter

ended 30th Sep, 2013, an increase of 40.56%. Revenue for the quarter rose by 2.66% to Rs. 48985.50 million from

Rs. 47714.90 million in Q2 FY14. Reported earnings per share of the company stood at Rs. 43.31 a share during

the quarter, registering 40.10% increase over proceeding quarter ended 30th Sep, 2013. Profit before interest,

depreciation and tax is Rs. 10906.00 millions as against Rs. 11491.70 millions in the proceeding quarter ended

30th Sep, 2013.

The results for the quarter ended 31st Dec, 2013 are consolidated results of Tech Mahindra Ltd (including

merged companies and subsidiaries of its merged companies) while results for the previous quarter ended 31st

Dec, 2012 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

Q3 FY14 Q3 FY13

Travelling Expenses 2167.00 670.80

Other Expenditure 5822.90 2285.10

Services Rendered By Business Associates & Others

5070.40 1597.70

Employee Benefit Expenses 24562.20 9594.60

Depreciation & Amortization Expense

1396.20 504.60

Total Expenditure 39018.70 14652.80

Segment Revenue

Latest Updates

• Tech Mahindra Limited and Mahindra Satyam announced the formal amalgamation of Mahindra Satyam with

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

• Tech Mahindra becomes First Indian IT Services Company to Achieve TMMi Level 5 Certification.

• Active Client count stood at 605 in Q3 FY14 vs 576 in Q2 FY14.

• Tech Mahindra Ltd has entered into a global strategic business partnership with Bosch Software Innovations,

which will primarily focus on the global manufacturing and transportation industry. The partnership aims to

develop and deliver scalable digital enterprise solutions in the ‘Internet of Things and Services’ space. This

space is expected to grow exponentially as more than 20 billion devices are expected to be connected to the

Internet by 2015 and 50 billion by 2020.

Key wins for the Quarter ended Dec 31, 2013

• A leading ASEAN Telco has partnered with Tech Mahindra in integration and enterprise information

management space

• A leading Australian diversified financial services group selected TechM Mahindra for its platform based

managed services.

• A leading US based niche insurance service provider has awarded Tech Mahindra a large transformational IT

services deal covering development of its entire suite of policy administration and billing along with

development of claim systems as a part of its business process re-engineering

• Tech Mahindra chosen by a major supercar OEM, to provide engineering services in mechanical and

electronics areas and also support new product development.

• The Company has engaged by a global aerospace and defense manufacturer for developing engineering and

graphic designing solutions

• Tech Mahindra has selected by a leading telecommunications company in Australia for its operations support

system’s (OSS) performance & capacity monitoring solutions.

• A leading European automotive giant has chosen Tech Mahindra to provide application maintenance

outsourcing (AMO) services to help its strategic initiative of cost optimization

• The Company has won a deal from a leading broadband service provider from New Zealand for system

implementation and integration services helping maintain its competitive edge

• Tech Mahindra awarded a multi-year deal for application infrastructure transformation and application

monitoring services by a leading bank from India

• Tech Mahindra engaged by a global leader in energy management for providing engineering & IT outsourcing

services for China wide operations

• A large Middle East based LNG Company has chosen Tech Mahindra to upgrade and enhance its ERP systems

Business Highlights for the Quarter ended Dec 31, 2013

• Announced merger of Mahindra Engineering Services (MES) with Tech Mahindra Limited. This merger,

subject to necessary regulatory approvals, will see the creation of one of the prominent players providing

engineering services from India with strengths in Aerospace and Automotive verticals. MES boasts of 1300+

employees and revenues of INR 250.59 crore as of FY13.

• Launched Global Center of Excellence (CoE) with Hewlett Packard (HP) in Bangalore. This Center will focus

on IT Application and IT Infrastructure Performance Management solutions that transform customers IT

Operations landscape through automation and unification of key services.

Awards and Recognitions

• Tech Mahindra received 2013 Supplier Award for outstanding performance and contribution from BASE.

Tech Mahindra was one of only three suppliers of 125 to receive this award and the only one in the IT

Services space

• Recognized among the top 4 global product engineering R&D service providers for the second consecutive

year by Zinnov Management Consulting Pvt. Ltd

• CanvasM"s Device Testing Lab (CDTL) in New Jersey received the coveted PTCRB recognition for the UTRA

and E-UTRA device technologies as of December 5, 2013. This is a significant milestone for this multi-million

dollar lab, and will open doors to several Global OEMs based out of North American region

• Mahindra Comviva won the prestigious AfricaCom 2013 Awards in the ‘Best Mobile Money service’ category

for EcoCash, the mobile payment service offered by Econet, Zimbabwe, that is powered by Tech Mahindra’s

mobiquity® mMoney solution

• Secured 4th Position in CDP’s Climate Disclosure Leadership Index (CDLI)-India for its commitment towards

reducing Carbon Emission

• Tech Mahindra's Global Test Factory was awarded Best Use of Tools and Best Overall Project at the

inaugural TESTA European Test Awards

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

2.9 billion company with 83,000+ professionals across 49 countries, helping over 605 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.

Tech Mahindra has successfully implemented more than 18 Greenfield Operations globally and has over 151

active customer engagements mostly in the Telecom sector. The company has been involved in about 9

transformation programs of incumbent telecom operators. Its development centers are ISO 9001:2008, ISO

20000, ISO 27000 & BS25999 certified.

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.

The Company is amongst the top 5 Indian IT services companies and the merged entity creates a technology

services powerhouse, with revenues of USD 2.9 Billion, a team of 83,000+ professionals servicing 605 customers

across 49 countries. The brand dons a new look and logo, reflecting the heritage of the Mahindra Group and their

positioning represents the new connected world, offering innovative and customer-centric services and

solutions.

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

Subsidiary Companies

• Tech Mahindra (Americas) Inc.

• Tech Mahindra GmbH

• Tech Mahindra (Singapore) Pte. Limited

• Tech Mahindra (Thailand) Limited

• Tech Mahindra Foundation

• PT Tech Mahindra Indonesia

• CanvasM Technologies Limited

• CanvasM (Americas) Inc.

• Tech Mahindra (Malaysia) Sdn. Bhd.

• Tech Mahindra (Beijing) IT Services Limited

• Tech Mahindra (Bahrain) Limited S.P.C.

• Tech Mahindra (Nigeria) Limited

• Mahindra Logisoft Business Solutions imited

• Venturbay Consultants Private Limited

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

Balance Sheet as at March31, 2012 -2015E

TECH MAHINDRA LTD. FY12A FY13A FY14E FY15E

SOURCES OF FUNDS (Rs.in.mn)

Shareholder's Funds

Share Capital 1274.90 1281.20 2331.50 2331.50

Reserves and Surplus 39233.40 52972.00 79458.00 111241.20

1. Sub Total - Net worth 40508.30 54253.20 81789.50 113572.70

2. Share application money pending

allotment 0.30 2.80 28.80 30.24

3. Minority interest 0.00 1089.40 1329.07 1382.23

Non Current Liabilities

Long term borrowing 6000.00 3000.00 360.00 324.00

Other Long term Liabilities 4294.90 2254.80 7555.30 8310.83

Long Term Provisions 1886.30 2062.80 4435.50 4879.05

4. Sub Total - Non Current Liabilities 12181.20 7317.60 12350.80 13513.88

Current Liabilities

Short term borrowing 5265.70 7804.00 0.00 0.00

Trade Payables 3649.40 6401.20 14402.70 15266.86

Other Current Liabilities 6241.80 9805.10 22953.74 24330.96

Short Term Provisions 1505.60 3171.00 12176.64 13637.84

5. Sub Total - Current Liabilities 16662.50 27181.30 49533.08 53235.66

6. Amount Pending Investigation Suspense

Account 0.00 0.00 12304.00 0.00

Total Liabilities (1+2+3+4+5+6) 69352.30 89844.30 157335.25 181734.71

APPLICATION OF FUNDS

Non-Current Assets

Fixed Assets

Tangible assets 6729.10 8832.20 22433.79 24901.50

Intangible assets 63.00 207.30 464.35 501.50

Capital Work in Progress 1671.00 343.20 411.84 469.50

a) Sub Total - Fixed Assets 8463.10 9382.70 23309.98 25872.50

b) Non- Current Investments 34271.10 39241.60 12949.73 13985.71

c) Goodwill on consolidation 33.30 3407.20 5247.09 5614.38

d) Long Term loans and advances 3384.20 5390.40 7007.52 7988.57

e) Deferred Tax Asset 997.70 1511.10 4835.52 5270.72

1. Sub Total - Non Current Assets 47149.40 58933.00 53349.84 58731.88

Current Assets

Current Investment 1604.70 1744.90 1046.94 1130.70

Inventories 0.00 110.20 126.73 138.14

Trade receivables 13171.70 17035.90 43337.84 51138.66

Cash and Bank Balances 2417.70 5357.50 34984.48 42331.21

Short-terms loans & advances 2722.80 4287.20 11661.18 13896.50

Other current assets 2286.00 2375.60 12828.24 14367.63

2. Sub Total - Current Assets 22202.90 30911.30 103985.41 123002.83

Total Assets (1+2) 69352.30 89844.30 157335.25 181734.71

Annual Profit & Loss Statement for the period of 2012 to 2015E

Value(Rs.in.mn) FY12A FY13A FY14E FY15E

Description 12m 12m 12m 12m

Net Sales 54896.90 68730.80 188677.62 218866.04

Other Income 981.70 -747.00 2396.64 2492.51

Total Income 55878.60 67983.80 191074.26 221358.54

Expenditure -45702.90 -54488.40 -145841.59 -168526.85

Operating Profit 10175.70 13495.40 45232.67 52831.69

Interest -1025.80 -1030.40 -965.03 -1042.23

Gross profit 9149.90 12465.00 44267.64 51789.46

Depreciation -1613.30 -1999.60 -5398.03 -6045.79

Exceptional Items -678.70 0.00 1200.00 0.00

Profit Before Tax 6857.90 10465.40 40069.61 45743.67

Tax -1437.10 -2355.40 -7481.82 -9468.94

Profit After Tax 5420.80 8110.00 32587.79 36274.73

Minority Interest -36.20 -196.21 -338.85 -352.40

Share of Profit & Loss of Asso 5569.90 4964.30 0.00 0.00

Net Profit 10954.50 12878.09 32248.94 35922.32

Equity capital 1274.90 1281.20 2331.50 2331.50

Reserves 38674.70 52972.00 79458.00 111241.20

Face value 10.00 10.00 10.00 10.00

EPS 85.92 100.52 138.32 154.07

Quarterly Profit & Loss Statement for the period of 30th June, 2013 to 31st March, 2014E

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

Description 3m 3m 3m 3m

Net sales 41032.30 47714.90 48985.50 50944.92

Other income 2073.00 380.80 -457.00 399.84

Total Income 43105.30 48095.70 48528.50 51344.76

Expenditure -32387.50 -36604.00 -37622.50 -39227.59

Operating profit 10717.80 11491.70 10906.00 12117.17

Interest -223.00 -241.50 -236.10 -264.43

Gross profit 10494.80 11250.20 10669.90 11852.74

Depreciation -1174.30 -1221.90 -1396.20 -1605.63

Exceptional Items 0.00 0.00 1200.00 0.00

Profit Before Tax 9320.50 10028.30 10473.70 10247.11

Tax -2327.80 -2840.10 -264.50 -2049.42

Profit After Tax 6992.70 7188.20 10209.20 8197.69

Minority Interest -129.60 -3.90 -111.00 -94.35

Net Profit 6863.10 7184.30 10098.20 8103.34

Equity capital 1287.70 2323.90 2331.50 2331.50

Face value 10.00 10.00 10.00 10.00

EPS 53.30 30.91 43.31 34.76

Ratio Analysis

Particulars FY12A FY13A FY14E FY15E

EPS (Rs.) 85.92 100.52 138.32 154.07

EBITDA Margin (%) 18.54% 19.64% 23.97% 24.14%

PBT Margin (%) 12.49% 15.23% 21.24% 20.90%

PAT Margin (%) 9.87% 11.80% 17.27% 16.57%

P/E Ratio (x) 21.39 18.29 13.29 11.93

ROE (%) 13.57% 14.95% 39.84% 31.94%

ROCE (%) 23.02% 23.82% 61.63% 51.69%

EV/EBITDA (x) 23.90 17.85 8.71 7.32

Book Value (Rs.) 313.35 423.46 350.80 487.12

P/BV 5.87 4.34 5.24 3.77

Charts

OUTLOOK AND CONCLUSION

� At the current market price of Rs.1838.00, the stock P/E ratio is at 13.29 x FY14E and 11.93 x FY15E

respectively.

� Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.138.32 and

Rs.154.07 respectively.

� Net Sales and PAT of the company are expected to grow at a CAGR of 58% and 88% over 2012 to 2015E

respectively.

� On the basis of EV/EBITDA, the stock trades at 8.71 x for FY14E and 7.32 x for FY15E.

� Price to Book Value of the stock is expected to be at 5.24 x and 3.77 x respectively for FY14E and FY15E.

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.2022.00 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.

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.

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 data released by

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 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.

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

C.V.S.L.Kameswari Pharma

U. Janaki Rao Capital Goods

B. Anil Kumar Diversified

Ashish.Kushwaha IT, Consumer Durable & Banking

Suhani Adilabadkar Diversified

M. Vinayak Rao Diversified

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