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GICS Industry: IT Services l Sub Industry: IT Consulting & Other Services l Website: www.bsil.

com

Blue Star Infotech Limited


Key Stock Indicators
NSE Ticker: Bloomberg Ticker: Face value / Share: Div. Yield (%): BLUESTINFO BLSI: IN 10.0 4.8 CMP (as on 21 Apr 2011Rs/share): 52-week range up to 21 Apr 2011 (Rs) (H/L): Market Cap as on 21 Apr 2011 (Rs mn): Enterprise Value as on 21 Apr 2011 (Rs mn): Div. Yield (%): 0.0 103.4 139.00/92.60 1,034 932 Shares outstanding (mn): Free Float (%): Average daily volumes (12 months): Beta (2 year): 10.0 44.6 9,394 0.8

Incorporated in 1983, Blue Star Infotech Limited (BSIL) is engaged in developing information technology (IT) solutions for enterprises and building software products for independent software vendors in India, North America, Europe and Asia-Pacific. The company provides product development services, enterprise resource planning (ERP) solutions, travel technology solutions and testing services. Exports contributed ~81% of total revenues in FY10.

Key Financial Indicators


Revenue (Rs mn) EBITDA ma rgi ns (%) PAT (Rs mn) PAT ma rgi ns (%) Gea ri ng (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m.: Not meaningful

KEY HIGHLIGHTS
Major revenues come from North American market BSIL is a global provider of product development services, ERP solutions, travel technology solutions and testing services. North America continued to be the largest contributor to the companys revenue and profits, with a ~49% share, followed by Europe at ~18%. Asia-Pacific contributed ~8% and rest contributed ~26%. Exports contributed ~81% of total revenues in FY10. Strategic alliances in place The company has developed links with international multinational companies to ensure access to technology. Also, through its strategic partner programme, the company seeks to forge alliances with product companies in value-added resale, implementation of and support for their products. It has alliances with Microsoft, Oracle, HewlettPackard, PlatformLab, Amdocs, SAS, Kentico and Sitecore. iPhone app iRoadGenie launched In February 2011, the company launched its iRoadGenie travel application for the iPhone. The application helps users search for points of interest based on their current location. Such points of interest could be nearby sightseeing locations, leisure/ amusement parks, golf courses, cinemas, restaurants, pubs, shopping malls, gas stations, ATMs, hospitals, pharmacies, hotels etc. The application also helps in providing detailed directions to destinations, view pictures of top tourist destinations and enables reservation/ booking requests.

Mar-08 1,456.3 6.0 49.1 3.4 4.9 11.8 1.0 10.4 8.4 4.7

Mar-09 1,564.0 17.5 155.5 9.9 15.6 3.0 0.7 40.3 24.6 1.3

Mar-10 1,337.8 12.4 137.8 10.3 13.8 7.5 1.3 22.1 18.8 5.6

Shareholding (As on December 31, 2010)


DII 4% Others 41%

KEY RISKS

Foreign exchange fluctuations exports contributed ~81% to total revenues in FY10 Intense competition from domestic and international players

Promoter 55%

Indexed price chart

Stock Performances vis--vis market


Returns (%) YTD BLUESTINFO NIFTY
Note: 1) YTD returns are since April 1, 2010 to Apr 21, 2011. 2) 1-m, 3-m and 12-m returns are up to Apr 21, 2011.

1-m 7 10

3-m -23 3

12-m -13 12

-8 11

CRISIL COMPANY REPORT | 1

Blue Star Infotech Limited


BACKGROUND
BSIL is engaged in developing information technology (IT) solutions for enterprises and building software products for independent software vendors in India, North America, Europe and the Asia-Pacific. Its principal products include computer software development, services and software distribution. BSIL offers enterprise services in application development and maintenance, enterprise testing services, packaged application services, business intelligence services, enterprise application integrationservice oriented architecture and collaboration and enterprise content management. The company also provides product engineering services, including product architecture and design, development, maintenance and support, testing, and migration and re-engineering, as well as software-as-a-service (SaaS) and cloud enablement. In addition, the company offers IT services such as IT consulting, package implementation and application development and support for enterprises in various sectors, such as discrete and process manufacturing, pharmaceuticals, construction, telecom and services. The company is a Microsoft Gold Partner and an Oracle Certified Partner. Its product and services are utilised by independent software vendors (ISV) and hardware technology vendors. In FY10, the company added 37 new clients, which include companies such as NSE, Dorf Ketal, BSE, Snowman, EMC, Loop Mobile and Meru. Exports contributed ~81% of total revenues in FY10.

COMPETITIVE POSITION
Peer Comparison

Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m: Not meaningful

Blue Star Infotech Limited Mar-10 1,337.8 12.4 137.8 10.3 13.8 7.5 1.3 22.1 18.8 5.6

Panoramic universal Ltd Mar-10 1,334.2 44.9 378.6 28.4 0.8 29.2 0.6 0.1 14.6 21.4 2.7

Teledata Technology Solutions Ltd Mar-10 2,322.1 9.2 169.1 7.3 0.4 0.3 244.9 18.7 11.1 11.6 189.3

Take Solutions Ltd Mar-10 3,553.6 17.1 363.1 10.2 0.2 3.0 11.4 2.0 20.7 17.9 6.6

FINANCIAL PROFILE
Economic downturn affects top line and bottom line in FY10

Key Financial Indicators Units Revenue Rs mi ll ion Rs mi ll ion Per cent Per cent Per cent Times Per cent Per cent EBITDA ma rgins Per cent PAT PAT ma rgins EBITDA growth PAT growth Gea ring RoCE RoE

Mar-08
1,456.3 6.0 49.1 3.4 21.0 -40.6 -45.9 0.0 10.4 8.4

Mar-09
1,564.0 17.5 155.5 9.9 7.4 212.4 217.0 0.0 40.3 24.6

Mar-10
1,337.8 12.4 137.8 10.3 -14.5 -39.6 -11.4 0.0 22.1 18.8

On a consolidated basis, BSILs revenues declined 14.5% to Rs 1.3 bn in FY10 from Rs 1.5 bn in FY09. The global recession continued to dominate the economic scenario for IT companies as well as other industries for a large part of FY10. As a result of market volatility, plummeting demand and uncertain economic climate, sales volumes in the US and Europe declined significantly. Exports fell ~21% year-on-year. However, the company maintained its domestic sales volume in FY10. EBITDA margin dropped ~510 basis points to 12.4% in FY10 from 17.5% in FY09, mainly on account of increase in employee and operating costs as a percentage of sales. Lower operating profit, coupled with higher tax expenses, led to ~11.4% decline in PAT. The company reported profit of Rs 138 mn in FY10, down from Rs 156 mn in FY09.

Revenue growth Per cent

INDUSTRY PROFILE
IT services Indian IT services revenues are estimated to be around $34 billion in 2009-10, registering a CAGR of 20 per cent from 2004-05 to 2009-10. During the same period, IT services exports, which accounted for 80 per cent of the revenues, are estimated to have grown at a CAGR of 22 per cent to $27 billion in 2009-10. The industry is highly dependent on the US and UK markets, which contribute to around 75 per cent of export revenues. With IT services deriving a large portion of its revenues from exports, the sector`s profitability is highly correlated to foreign exchange movements. An appreciating rupee is thus a key risk factor. Also, as human resource is the main input in IT services, issues related to non-availability of skilled labor, attrition and wage inflation would also impact Indian IT players.

CRISIL COMPANY REPORT | 2

Blue Star Infotech Limited


ANNUAL RESULTS
Income Statement (Rs million ) Net Sales Operating Income EBITDA EBITDA Margin Depreciation Interest Other Income PBT PAT PAT Margin No. of shares (Mn No.) Earnings per share (EPS) Cash flow (Rs million ) Pre-tax profit Total tax paid Depreciation Change in working capital Cash flow from operating activities Capital Expenditure Investments and others Balance sheet (Rs million ) Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions Total liabilities Gross block Net fixed assets Investments Current assets Receivables Inventories Cash Total assets Ratio Mar-08 47.7 -8.1 27.8 53.1 120.5 -11.6 10.7 Mar-09 165.5 -8.2 25.7 -17.2 165.8 -17.4 -116.4 Mar-10 142.4 -8.1 23.1 13.8 171.2 -16.2 -158.7 Revenue growth (%) EBITDA growth(%) PAT growth(%) EBITDA margins(%) Tax rate (%) PAT margins (%) Dividend payout (%) Dividend per share (Rs) BV (Rs) Return on Equity (%) Return on capital employed (%) Gearing (x) Interest coverage (x) Debt/EBITDA (x) Asset turnover (x) Current ratio (x) Gross current assets (days) Mar-08 21.0 -40.6 -45.9 6.0 17.4 3.4 50.9 2.5 59.6 8.4 10.4 0.0 6.9 0.0 4.1 2.3 141 Mar-09 7.4 212.4 217.0 17.5 3.8 9.9 32.1 5.0 67.1 24.6 40.3 0.0 3.2 0.0 4.2 2.4 122 Mar-10 -14.5 -39.6 -11.4 12.4 5.8 10.3 36.3 5.0 79.3 18.8 22.1 0.0 16.0 0.0 3.5 2.8 124 Mar-08 1,435.7 1,456.3 87.8 6.0 27.8 12.8 0.6 47.7 49.1 3.4 10.0 4.9 Mar-09 1,550.3 1,564.0 274.2 17.5 25.7 86.4 3.4 165.5 155.5 9.9 10.0 15.6 Mar-10 1,302.5 1,337.8 165.7 12.4 23.1 10.4 10.3 150.3 137.8 10.3 10.0 13.8 Mar-08 100.0 495.8 595.8 -8.9 0.0 0.0 0.0 253.5 46.1 886.5 363.8 195.8 0.0 690.6 299.9 44.0 164.0 886.4 Mar-09 100.0 570.8 670.8 -7.1 0.0 0.0 0.0 249.4 83.6 996.7 375.1 192.2 116.4 688.0 311.0 25.2 110.7 996.6 Mar-10 100.0 693.4 793.4 -2.7 0.0 0.0 0.0 247.2 83.5 1,121.4 380.3 183.8 275.1 662.5 272.7 16.4 101.3 1,121.4

Cash flow from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)

-0.9 0.0 0.0 -29.2 0.0

-133.8 0.0 0.0 -58.5 -26.8

-174.9 0.0 0.0 -58.5 52.7

Cash flow from financing activities Change in cash position Opening cash Closing cash
n.m : Not meaningful;

-29.2 90.4 73.6 164.0

-85.3 -53.3 164.0 110.7

-5.8 -9.5 110.7 101.3

QUARTERLY RESULTS
Profit and loss account (Rs million) No of Months Revenue EBITDA Interes t Depreci a tion PBT PAT Dec-10 3 321.0 35.7 5.9 26.8 21.4 100.0 11.1 1.8 8.3 6.7 % of Rev Dec-09 % of Rev 3 346.2 52.3 5.6 46.7 43.3 100.0 15.1 1.6 13.5 12.5 Sep-10 3 321.2 29.8 5.7 20.7 15.3 100.0 9.3 1.8 6.5 4.8 % of Rev Dec-10 % of Rev 9 977.4 124.5 17.0 101.1 84.8 100.0 12.7 1.7 10.3 8.7 Dec-09 9 1,033.4 136.6 17.2 119.4 110.2 100.0 13.2 1.7 11.6 10.7 % of Rev

CRISIL COMPANY REPORT | 3

Blue Star Infotech Limited


FOCUS CHARTS & TABLES
Rs mn 500 450 400 350 300 250 200 150 100 50 0 Jun-08 Mar-08

Quarterly sales & y-o-y growth

Dec-08

Dec-09

Mar-08

Mar-09

Dec-08

Dec-09

Mar-09

Sales

Sales growth y-o-y (RHS)

Mar-10

Dec-10

Sep-08

Sep-09

Sep-10

Jun-09

Jun-10

Net Profit

Net profit growth y-o-y (RHS)

Dec-08

Dec-09

Mar-08

Mar-09

Dec-08

Dec-09

Mar-08

Mar-09

Mar-10

Dec-10

Sep-08

Sep-09

Sep-10

Jun-08

Jun-09

Jun-10

OPM

Mar-10

NPM

Shareholding Pattern (Per cent) Mar 2010 Jun 2010 Promote r 55.4 55.4 FII 0.1 0.1 DII 3.6 3.6 Others 40.9 40.9

Sep 2010 55.4 0.1 3.6 40.9

Dec 2010 55.4 3.6 41.0

Board of Directors Director Name Suneel Mohan Advani (Mr.) As hok Mohan Advani (Mr.) Praka sh Gurunath Hebalkar (Dr.) Na res h Kumar Ma lhotra (Mr.) Sures h Nars appa Ta lwar (Mr.) Sa nja y Nanik Vas wa ni (Mr.) Sunil Bhatia (Mr.) K.P.T. Kutty (Mr.)

Designation Chairma n & Ma naging Director, Promoter-Director Vice Chairman, Promoter-Director Non-Executive Director Non-Executive Director Non-Executive Director Promoter-Director Managing Director Director

Additional Disclosure This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT). Disclaimer This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please contact 'Client Servicing' at +91-22-33423561, or via e-mail: clientservicing@crisil.com.

CRISIL COMPANY REPORT | 4

Dec-10

Sep-08

Sep-09

Sep-10

Jun-08

Jun-09

Jun-10

Rs/share 10 9 8 7 6 5 4 3 2 1 0

EPS

Per cent 25 20 15 10 5 0

Movement in operating and net margins

Mar-10

Dec-10

Sep-08

Sep-09

Sep-10

Jun-08

Jun-09

Jun-10

Per cent 30 25 20 15 10 5 0 -5 -10 -15 -20

Rs mn 100 80 60 40 20 0

Quarterly PAT & y-o-y growth

Per cent 600 500 400 300 200 100 0 -100

CRISILCompanyQuarterlyUpdatel09Dec2011

Blue Star Infotech Ltd


Sep11ResultSummary
Rsmn NetSales OtherIncome Rawmaterialcost Employeescost Otherexpenses EBITDA EBITDAmargin(%) Depreciation EBIT Interestandfinancecharges ExtraordinaryIncome:[Expenses] PBT Tax PAT PATmargin(%) Noofequityshares(Mn) EPS(Rs) Sep11 302 13 189 94 32 10.7% 8 24 24 8 17 5.6% 10.4 1.67 Jun11 291 13 188 111 5 1.7% 7 2 2 3 5 1.7% 10.0 0.50 Sep10 304 17 190 102 30 9.8% 6 24 3 21 5 15 5.0% 10.0 1.53 qoq(%) 4.0 4.5 0.3 15.2 557.1 900bps 19.7 n.m. n.m. 134.4 n.m. n.m. n.m. yoy(%) 0.5 26.2 0.5 7.5 8.1 90bps 38.6 1.2 17.9 38.9 10.5 60bps 13.3

Toplinedecreasedbyamarginal~0.5%yearonyear to~Rs302mninQ2FY12,largelyonaccountof declineinrevenuefromtheexportbusinessdueto adversemacroeconomicfactors.Exportrevenue declined~20%yoywhiledomesticrevenuejumped ~50%,partiallyoffsettinglowerexports. EBITDAmarginimprovedto10.7%inQ2FY12from 9.8%inQ2FY11owingtofavourableexchangerate movementandlowerprofessionalcharges,traveland conveyanceexpenses.PATincreased~11%yoyto ~Rs17mn,largelyduetohigheroperatingprofitand absenceofexceptionalexpenseswhichwerepresent inQ2FY11.

AdditionalDisclosure ThisreporthasbeensponsoredbyNSEInvestorProtectionFundTrust(NSEIPFT). Disclaimer Thisreportisbasedondatapubliclyavailableorfromsourcesconsideredreliable.CRISILLtd.(CRISIL)doesnotrepresentthatitisaccurateorcompleteandhence,itshouldnotberelieduponas such.Thedata/reportissubjecttochangewithoutanypriornotice.Opinionsexpressedhereinareourcurrentopinionsasonthedateofthisreport.Nothinginthisreportconstitutesinvestment, legal,accountingortaxadviceoranysolicitation,whatsoever.Thesubscriber/userassumetheentireriskofanyusemadeofthisdata/report.CRISILespeciallystatesthat,ithasnofinancial liabilitywhatsoever,tothesubscribers/usersofthisreport.ThisreportisforthepersonalinformationonlyoftheauthorisedrecipientinIndiaonly.Thisreportshouldnotbereproducedor redistributedorcommunicateddirectlyorindirectlyinanyformtoanyotherpersonespeciallyoutsideIndiaorpublishedorcopiedinwholeorinpart,foranypurpose. CRISILisnotresponsibleforanyerrorsandespeciallystatesthatithasnofinancialliabilitywhatsoevertothesubscribers/users/transmitters/distributorsofthisreport.Forinformationplease contact'ClientServicing'at+912233423561,orviaemail:clientservicing@crisil.com.

CRISIL COMPANY REPORT |1

CRISIL Company Quarterly Update l 17 August 2011

Blue Star Infotech Limited


Q1FY12 Result Summary
Rs mn Net Sales Other Income Employees cost Other expenses EBITDA EBITDA margin (%) Depreciation EBIT PBT Tax PAT PAT Margin (%) No of equity shares (Mn) EPS (Rs) Q1FY12 291 13 188 111 5 1.7 7 -2 -2 3 -5 -1.7 10.0 -0.5 Q4FY11 301 13 186 98 29 9.6 6 23 23 24 -1 -0.3 10.0 -0.1 Q1FY11 320 15 180 97 59 18.4 5 54 54 6 48 15.0 10.0 4.8 n.m. n.m. q-o-q (%) -3 5 1 13 -83 -790bps 5 n.m. n.m. -86 n.m. n.m. y-o-y (%) -9 -12 5 15 -92 -1670bps 25 n.m. n.m. -43 n.m. n.m.

Top line declined ~9% year-on-year to ~Rs 291 mn in Q1FY12, largely due to extended customer acquisition cycle and lower realisations, led by intense competition in the US and UK markets.

EBITDA margin slumped to 1.7% in Q1FY12 from 18.4% in Q1FY11, on account of higher employee expenses, professional fees, cost of products/ licenses and other operating expenses. The company recorded net loss of Rs 5 mn in Q1FY12 against net profit of Rs 48 mn in Q1FY11, largely due to lower operating profit and increase in depreciation charges.

Revenue and EBITDA margins

PAT and PAT margins

Share price movement

Shareholding pattern

Additional Disclosure
This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).

Disclaimer
This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please contact 'Client Servicing' at +9122-33423561, or via e-mail: clientservicing@crisil.com.

CRISIL COMPANY REPORT | 1