IT MOSt 070415

March 2015 Results Preview | April 2015
Technology
Company name
4QFY15: Pronounced weakness poses questions
Cognizant Technology
amid weak currencies, seasonal sluggishness and client-specific headwinds
HCL Technologies
Confluence of cross currency headwinds, budget seasonality
Hexaware Technologies
Continued depreciation of global currencies v/s the USD, and to a lesser extent, 4Q
seasonality were the anticipated headwinds to performance. Revenue and profit
warnings from multiple companies ensued in due course. HCLT highlighted currency
and TCS seasonality, whereas others cited additional pressures:
n MTCL cited delay in commencement of projects at two clients in Retail and CPG
vertical. That is also likely to impact operating margins.
n KPIT cited hit over and above cross currencies to revenue, and more
significantly, to profitability, some of which could percolate into FY16 as well.
n PSYS cited muted growth in 4Q compared to earlier expectation of robust
performance, led by change in business priorities of one of its large customers in
the Product Engineering segment. Margins too, would see some pressure due to
ongoing investments in R&D and S&M.
n We expect TECHMs near term performance to remain soft, with Telecom taking
a breather from a number of high growth quarters. Margins are under pressure
from multiple headwinds wage hikes, integration of LCC acquisition and visa
costs in 1QFY16.
n TCS has refrained from sharing its outlook for FY16. By this time last year, we
already had a re-iteration of growth acceleration in FY15 over FY14 (which
eventually did not happen).
n Separately, NITEC ran into a conflict with one of its APAC clients, resulting in
provision of USD10m from unbilled revenues. We expect revenue growth to
remain marginal otherwise, with some uptick in profitability.
Infosys
KPIT Technologies
MindTree Consulting
Mphasis
Persistent Systems
TCS
Tech Mahindra
Wipro
Exhibit 1: Expected quarterly performance summary (INR m)

Technology
HCL Technologies
Hexaware Tech.
Infosys
KPIT Tech.
Mindtree
MphasiS*
Persistent Systems
TCS
Tech Mahindra
Wipro
Technology Sector Aggregate
*YoY not comparable
CMP
(INR)
932
313
2,177
193
1,443
389
774
2,546
643
620
Reco
Buy
Sell
Buy
Neutral
Neutral
Neutral
Neutral
Neutral
Buy
Neutral
Sales (INR M)
Var % Var %
Mar-15
YoY
QoQ
93,775
12.3
1.0
7,387
25.4
3.8
138,924
7.9
0.7
7,866
12.3
0.9
9,206
11.8
1.0
13,880
-1.6
5,082
13.8
2.7
245,596
14.0
0.2
61,773
22.1
7.4
121,431
4.2
1.3
704,920
11.8
1.2
Ashish Chopra (Ashish.Chopra@MotilalOswal.com); +91 22 3982 5424

Siddharth Vora (Siddharth.Vora@MotilalOswal.com); +91 22 3982 5585
April
2015are advised to refer through disclosures made at the end of the Research Report.
Investors
EBDITA (INR M)
Var % Var %
Mar-15
YoY
QoQ
22,502
0.8
-3.0
1,437
26.9
1.4
39,024
7.1
-1.3
1,023
-9.4
-5.7
1,889
6.6
1.2
1,992
-3.6
1,024 -15.1
2.9
70,617
6.1
0.1
10,987
2.5
-5.3
27,177
-3.6
1.6
177,672
3.8
-0.8
Net Profit (INR M)

Var % Var %
Mar-15
YoY
QoQ
17,898
10.2
-6.9
989
40.7
5.3
31,218
4.3
-3.9
769
49.4
17.8
1,432
45.5
1.7
1,452
- -12.0
667
-0.7 -10.4
54,836
3.5
0.7
6,938
15.1 -10.7
22,122
-0.6
0.9
138,323
5.2
-2.1
Source: Company, MOSL
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
March 2015 Results Preview | Sector: Technology
So, is all well with the industry?

This is a pertinent question, considering news flow during the quarter. However,
against this backdrop, we have the following:
n NASSCOM guided 12-14% growth in industry exports in FY16, similar to the
growth number in FY15.
n Accenture kick-started the earnings season for the industry, beating the higher
end of its revenue guidance (in CC terms) and upgrading its outlook for the year.
The common theme binding the optimism in growth rates across the two entities is
the burgeoning prominence of digital technologies. With a base of USD6b+ in digital
technologies / services, Accenture is ahead of the curve in terms of both
investments and scale. While the total dollars spent on technology services are not
growing significantly, the spending mix may well be changing fast, demanding
readiness from providers. Select pockets notably Insurance and Energy are
witnessing secular pressures in spending, which will be an overhang on growth.
Expect HCLT to report sanguine CC growth, TECHM to lag

n
While the impact from cross currencies may be most pronounced for HCLT
(~280bp on QoQ USD revenue growth), we expect 3.8% QoQ CC growth, the
highest in tier-I IT, with TCS, INFO and WPRO expected to grow ~2.5% and
TECHM likely to remain flat in constant currency organic terms.
Across tier-II, we expect HEXW to continue with its momentum and estimate 5%
QoQ CC revenue growth. We expect growth to remain tepid across MTCL, KPIT,
MPHL and PSYS.
As far as margins are concerned, the worst hit would be TECHM, with
headwinds from wage hikes (effective January 1), cross currency and integration
with LCC amounting to 300bp+. We estimate 100bp margin decline at HCLT,
range-bound margins at TCS and WPRO and 60bp QoQ decline at INFO.
Across tier-II, PSYS and MTCL are expected to report flattish margins while KPIT,
HEXW and MPHL are expected to report margin contraction. On an aggregate
basis, tier-II is expected to report 30bp margin contraction.
(Wait and) watch for INFOs commentary, WPROs guidance

n
April 2015
INFO will buck the trend of kicking off the earnings season by reporting only in
the fourth week. However, its guidance for CY16 and plan on sharing excess
cash with shareholders will be keenly anticipated.
1Q has traditionally been a seasonally weak quarter for WPRO, made up for by
progress through the remainder of the year, with 4Q being stronger. However,
Energy vertical softness has led to uninspiring 1-3% QoQ outlook for 4QFY15,
and if 1QFY16 outlook is not robust, WPRO may lag industry growth yet again.
TCS has given away little as far as its growth prospects for FY16 go, while
commentary on the overall environment has remained positive. Watch out for
its outlook on FY16 growth.
Prefer tier-I over tier-II; INFO, TECHM and HCLT are our top picks
We continue to prefer tier-I IT over tier-II, after convergence of valuation multiples
in recent quarters. Our preference in tier-I is for stocks with healthy prospects in
next-gen technologies and with differentiated growth drivers. INFO, TECHM and
HCLT are our preferred bets in the tier-I space. While we have no Buy ratings in tierII IT from a one-year return perspective, MTCL and PSYS are preferred business
models from a long term view.
Exhibit 2: Expect organic USD revenue growth to be 0.3-1.25% on reported basis
TCS
Infosys
Wipro
HCL Tech
Cognizant
Tech Mahindra
7.4
7
5
4.0
0.7 1.1
3
1
0.4 0.3
4QFY15E
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
-1
Exhibit 3: Incremental revenue trending down across the board, in 4QFY15 too, due to currencies
Incremental Revenues QoQ -USD m
4QFY14
1QFY15
2QFY15
3QFY15
280
4QFY15E
230
200
220
250
200
150
130
HEXW
KPIT
Tech
Mahindra
MTCL
HCL Tech
TECHM
Wipro
HCLT
Cognizant Infosys
WPRO
TCS
TCS
-50
INFO
100
120
MPHL
250
Cross currency impact on USD revenues (bp)
Exhibit 4: MTCL, PSYS and KPIT are facing client-specific issues that will pull down growth
Persistent System
Hexaware
KPIT Tech.
Mindtree
2.7
3.7
0.2
0.0
2
-2
4QFY15E
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
-6
April 2015
Exhibit 5: EBITDA margin to decline at TECHM due to wage hikes, currency and LCC
integration
TCS
Infosys
HCL Tech
Wipro
Cognizant
Tech Mahindra
31
28.8
28.1
26
4QFY15E
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY13
17.8
3QFY13
16
2QFY13
21
24.0
22.4
19.3
Exhibit 6: Expect tier-I reported USD revenue to grow at 0.3-1.25% QoQ in organic terms
Revenue (USD m)
Company
Revenue (INR b)
4QFY15E
4QFY14
YoY (%)
3QFY15
QoQ (%)
4QFY15E
4QFY14
YoY (%)
3QFY15
QoQ (%)
TCS
3,948
3,503
12.7
3,931
0.4
246
216
14.0
245
0.2
Infosys
2,234
2,092
6.8
2,218
0.7
139
129
7.9
138
0.7
Wipro
1,801
1,720
4.7
1,795
0.3
121
117
4.2
120
1.3
HCLT
1,508
1,361
10.8
1,491
1.1
94
83
12.3
93
1.0
Tech Mahindra
993*
825
20.4
924
7.4
62
51
22.1
58
7.4
10,484
9,501
10.3
10,360
1.2
661
595
11.2
653
1.3
QoQ (bp)
Aggregate
EBITDA Margin (%)

Company
PAT (INR b)
4QFY15E
4QFY14
YoY (bp)
3QFY15
QoQ (bp)
4QFY15E
4QFY14
YoY (bp)
3QFY15
TCS
28.8
30.9
-210
Infosys
28.1
28.3
-20
28.8
55
53
3.5
54
0.7
28.7
-60
31
30
4.3
33
-3.9
Wipro
22.4
24.2
-180
22.3
10
22
22
-0.6
22
0.9
HCLT
24.0
Tech Mahindra
17.8
26.7
-270
25.0
-100
18
16
10.2
19
-6.9
21.2
-340
20.2
-238
6.9
6.0
15
7.8
-11
Aggregate
25.7
27.6
-185
26.3
(53)
133
127
4.4
136
-2.1
*Includes ~USD85m from LCC integration
April 2015
Exhibit 7: Expect tier-II USD revenue to grow 0.7% QoQ and margins to decline across the board
Revenue (USD m)
Company
4QFY15E
Persistent Systems
Hexaware
KPIT Tech.
Mindtree
Mphasis
Aggregate
82
119
126
148
225
700
Company
Persistent Systems
Hexaware
KPIT Tech.
Mindtree
Mphasis
Aggregate
4QFY15E
20.1
19.5
13.0
20.5
14.4
17.0
4QFY14
YoY (%)
Revenue (INR b)
3QFY15
73
12.5
80
96
24.0
115
114
11.3
126
133
11.5
148
170
32.7
227
584
19.8
695
EBITDA margin (%)
4QFY14 YoY (bp) 3QFY15
27.0
-690
20.1
19.2
20
19.9
16.1
-310
13.9
21.5
-100
20.5
17.1
-270
14.6
19.5
-250
17.2
QoQ (%)
4QFY15E
4QFY14
2.7
3.7
0.0
0.2
-0.8
0.7
5.1
7.4
7.9
9.2
13.9
43
4.5
5.9
7.0
8.2
10.3
36
QoQ (bp)
0
-50
-90
10
-30
-30
4QFY15E
0.7
1.0
0.8
1.4
1.5
5.3
YoY (%)
3QFY15
QoQ (%)
13.8
4.9
2.7
25.4
7.1
3.8
12.3
7.8
0.9
11.8
9.1
1.0
34.8
14.1
-1.6
21.0
43
0.8
PAT (INR b)
4QFY14 YoY (bp) 3QFY15 QoQ (bp)
0.7
-0.7
0.7
-10.4
0.7
40.7
0.9
13.3
0.5
49.4
0.7
17.8
1.0
45.5
1.4
1.7
1.2
19.0
1.7
-12.0
4.1
29.7
5.3
-0.4
Exhibit 8: 4QFY15 currency highlights (INR)
Average
Closing
USD
62.26
62.50
Rates (INR)
EUR
GBP
70.2
94.3
67.2
92.4
AUD
49.0
47.5
USD
0.3%
-0.9%
Change (QoQ)
EUR
GBP
AUD
-9.2%
-3.8%
-7.6%
-12.3%
-6.0%
-8.1%
Exhibit 9: 4QFY15 currency highlights (in USD)

EUR
1.13
1.07
Average
Closing
Rates (USD)
GBP
1.51
1.48
AUD
0.79
0.76
EUR
-9.8%
-11.3%
Change (QoQ)
GBP
AUD
-4.3%
-8.0%
-4.9%
-6.9%
Exhibit 10: Cross currencies: Assumed rates v/s actual

Guided at
Infosys
Wipro
Actual (Average)
Change (%)
Infosys
Wipro
April 2015
EUR
1.21
1.23
1.13
EUR
-6.9
-8.4
GBP
-2.7
-2.9
GBP
1.56
1.56
1.51
AUD
-3.8
-6.4
INR/USD
0.3
-1.0
AUD
0.82
0.84
0.79
INR/USD
62.06
62.90
62.26
Impact on guided USD revenue

-1.2
-2.2
Exhibit 11: EPS estimates (INR): MOSL v/s consensus

4QFY15
Infosys
TCS
Wipro
HCL Tech
Tech Mahindra
Cognizant
Persistent Systems
Mindtree
KPIT Cummins
Hexaware
Mphasis
FY15
MOSL Consensus
27.3
27.8
28.0
27.9
9.0
8.9
12.7
14.2
7.8
9.8
0.60
0.70
8.3
9.4
16.7
3.8
3.6
3.3
3.3
6.8
7.8
MOSL
108.1
108.6
34.8
52.7
32.1
2.7
35.2
65.6
13.2
15.1
30.1
FY16
Consensus
109.0
108.9
35.1
54.5
31.8
2.9
36.3
65.0
13.3
13.5
31.8
MOSL
117.7
126.9
37.9
59.8
38.7
3.2
40.6
78.3
15.2
18.6
33.9
Upside/Downside to Consensus
Consensus
120.9
124.0
38.3
60.4
40.0
3.4
42.7
77.0
16.2
16.0
34.9
4QFY15
-1.7%
0.2%
0.6%
-10.6%
-20.6%
-14.6%
-11.4%
8.1%
-1.7%
-12.5%
FY15
FY16
-0.8%
-2.7%
-0.3%
2.3%
-0.8%
-1.1%
-3.4%
-1.0%
0.8%
-3.1%
-8.7%
-6.0%
-3.1%
-5.0%
0.9%
1.7%
-0.8%
-6.4%
12.4%
15.9%
-5.3%
-2.8%
Source: MOSL
Exhibit 12: Comparative valuation

Sector / Companies
CMP
(INR)
RECO
Technology
HCL Technologies
932
Buy
Hexaware Tech.
313
Sell
Infosys
2,177
Buy
KPIT Tech.
193 Neutral
Mindtree
1,443 Neutral
MphasiS
389 Neutral
Persistent Systems
774 Neutral
TCS
2,546 Neutral
Tech Mahindra
643
Buy
Wipro
620 Neutral
Technology Sector Aggregate
April 2015
EPS (INR)
PE (x)
EV/EBIDTA (x)
ROE (%)
FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E
52.7 59.8 67.0
10.6 15.1 18.6
108.1 117.7 137.7
13.2 15.2 19.5
65.6 78.3 94.0
30.1 33.9 36.7
35.2 40.6 51.2
108.6 126.9 151.2
31.8 38.7 47.8
34.8 37.9 43.8
17.7
29.4
20.1
14.7
22.0
12.9
22.0
23.4
20.2
17.8
20.7
15.6
20.7
18.5
12.7
18.4
11.5
19.1
20.1
16.6
16.4
18.3
13.9
16.9
15.8
9.9
15.3
10.6
15.1
16.8
13.5
14.1
15.6
13.0
18.7
14.1
8.5
16.4
10.1
13.8
17.3
13.4
13.6
15.1
11.2
14.7
12.6
6.3
12.6
9.4
11.0
14.9
10.9
11.5
13.0
9.5
12.6
10.4
4.5
10.2
8.5
8.4
12.4
8.7
9.6
10.8
33.3
25.7
26.0
20.3
30.0
12.2
21.4
35.2
26.7
24.9
27.1
30.6 28.0
34.7 40.2
24.5 25.0
20.6 21.4
29.2 28.7
13.0 13.4
21.5 23.2
34.1 33.2
25.5 25.8
24.8 24.6
25.8 25.5
Source: MOSL
Cognizant Technology
Bloomberg
CTSH US
Equity Shares (m)
607.9
M.Cap. (INR b) /(USD b)
CMP: USD62.6
n
27.5/27.5
52-Week Range (INR)
54/40
Financial Snapshot (USD b)

Y E Dec
2013 2014E 2015E 2016E
Sales
8.8
10.3
12.2
14.0
EBITDA
1.9
2.1
2.4
2.8
PAT
1.2
1.4
1.6
2.0
EPS (USD)
2.0
2.3
2.7
3.2
EPS Gr. (%)
16.2
16.8
14.1
19.0
BV/Sh. (USD)
10.0
12.6
15.3
18.5
RoE (%)
22.4
20.7
19.2
18.9
RoCE (%)
29.0
25.9
24.6
24.2
31.1
26.6
23.3
19.6
6.2
5.0
4.1
3.4
18.8
16.8
14.2
11.6
n
n
Valuation
P/E (x)
P/BV (x)
EV/EBITDA (x)
Quarterly Performance
Y/E Dec
Revenue (USD m)
QoQ (%)
GPM (%)
SGA (%)
EBITDA
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (USD)
Headcount
Util excl. trainees (%)
Attrition (%)
Offshore rev. (%)
Fixed Price (%)
Not Rated
For 1QCY15, CTSH guided for at least USD2.88b revenue, implying

5% QoQ growth. Excluding revenues from TriZetto, this implies only
~1.25% QoQ organic growth. We believe the weakness is due to
seasonally weak 1Q as well as currency movements. This implies a
CQGR of 3.9% for the remainder of the year to meet the outlook.
2Q-4Q CQGR of 3.9% is below CTSHs history of 4.1-6.8% 2Q-4Q
CQGR guidance, considering Trizetto acquisition is expected to grow
in mid-single digits in CY15. CTSH has also built in risk adjustments
for the guidance this year post its downward revision in CY14.
We revenue to grow by 4% QoQ to USD2.85b in 1QCY15. This is
below the guided range to cater for cross currency impacts.
We expect 40bp QoQ contraction in EBITDA margin to 19.3%. Our
SGA estimate is 19.5%, down 100bp QoQ.
We expect PAT of USD365m, up 0.4% QoQ, and net margin of
12.8%.
The stock trades at 23.3x CY15E and 19.6x CY16E EPS. Not Rated.
Key issues to watch for

CY15 revenue guidance and commentary on sales cycles.
Outlook on discretionary spending and scale in Digital/SMAC.
(USD m)
CY14
1Q
2,422
2.8
40.9
20.0
20.8
19.0
13.2
26.3
349
7.6
22.8
0.6
178,600
76.0
14.1
49.0
36.0
2Q
2,517
3.9
40.4
19.2
21.2
19.4
13.9
25.9
372
6.6
23.8
0.6
187,400
74.0
16.9
49.0
35.0
3Q
2,581
2.5
39.2
19.6
19.6
17.7
6.2
23.3
356
-4.4
11.3
0.6
200,000
73.0
15.6
49.0
35.0
CY15E
4Q
2,742
6.2
40.2
20.5
19.7
17.5
5.9
25.2
363
2.0
11.9
0.6
211,500
69.0
14.5
49.0
36.0
1Q
2,851
4.0
38.8
19.5
19.3
17.1
4.6
26.0
365
0.5
4.6
0.6
221,400
70.0
0.0
49.4
0.0
2Q
2,994
5.0
40.1
19.5
20.6
18.8
2.8
26.0
419
15.0
12.8
0.7
228,800
71.5
0.0
49.6
0.0
3Q
3,117
4.1
39.1
19.5
19.6
17.8
3.9
26.0
415
-1.1
16.6
0.7
235,700
73.0
0.0
50.1
0.0
CY14
CY15E
4Q
3,224
3.4
39.7
19.5
20.2
18.4
5.1
26.0
444
7.0
22.3
0.7
242,100
74.0
10,263
16.1
40.2
19.8
20.3
18.4
39.2
25.2
1,439
12,186
18.7
39.4
19.5
19.9
18.1
16.4
26.0
1,643
17.1
2.3
211,500
72.8
14.1
2.7
242,100
72.2
50.5
49.0
49.9
E: MOSL Estimates
April 2015
HCL Technologies
Bloomberg
HCLT IN
Equity Shares (m)
1411.4
M. Cap. (INR b)/(USD b)
1,315/21
52-Week Range (INR)
-7/-1/5
n
Financial Snapshot (INR b)

Y/E JUNE
2014 2015E 2016E 2017E
Sales
329.2
372.3
429.6
499.8
EBITDA
86.7
92.1
103.2
115.4
PAT
63.7
75.9
84.5
94.8
EPS (INR)
45.1
52.7
59.8
67.0
EPS Gr. (%)
57.7
16.8
13.5
12.1
BV/Sh. (INR)
143.8
175.9
218.6
265.6
RoE (%)
37.1
33.3
30.6
28.0
RoCE (%)
40.9
36.1
33.3
30.4
Payout (%)
24.4
32.3
24.3
25.4
20.7
17.7
15.6
13.9
Valuation
P/BV (x)
EV/EBITDA (x)
6.5
5.3
4.3
3.5
13.9
12.9
11.1
9.4
1.2
1.8
1.6
1.8
Div Yield (%)
1,058/629
1,6,12 Rel Perf. (%)
P/E (x)
CMP: INR932
Quarterly Performance (US GAAP)

Y/E June
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
EBIT Margin (%)
Other income
ETR (%)
PAT before EOI
QoQ (%)
YoY (%)
EPS
Headcount
Attrition (%)
Fixed Price (%)
1Q
1,270
3.5
79,610
30.7
39.0
12.7
26.3
23.8
-1,200
20.2
14,160
18.2
63.9
10.0
87,196
84.9
16.1
54.7
n
n
Buy
We expect USD revenue growth of 1.1% QoQ to USD1.51b. As

notified in its pre-quarterly announcement, cross currency
movements are expected to impact growth by ~280bp. On a
constant currency basis, we expect growth to be at 3.9% QoQ.
We expect IMS to grow at 2.7% to USD527m, while software
services growth is expected to be flattish at 0.2% QoQ to USD907m.
In INR terms, our revenue estimate is INR93.8b, up 1% QoQ.
Realized currency rate is assumed at INR62.3/USD.
EBITDA margin is likely to decline 100bp QoQ to 24%, largely driven
by staggered wage hike impact of 40bp and 80bp of headwinds
from cross currency movements.
PAT estimate for the quarter is INR17.9b, down 6.9% QoQ. We
estimate forex loss at INR881m and other income (excluding forex
gains) at INR2.08b.
The stock trades at 15.6x FY15E and 13.9x FY16E EPS. Maintain Buy.

TCV of deals signed during the quarter.
Growth in IMS and Engineering segment.
Commentary on margins and impact from future investments.
FY14
2Q
1,321
4.0
81,840
30.4
38.4
12.5
26.0
23.7
-470
21.0
14,950
5.6
58.3
10.6
88,332
84.1
16.6
54.3
3Q
1,361
3.0
83,490
30.0
38.9
12.1
26.7
24.7
-70
20.9
16,240
8.6
59.4
11.5
90,190
84.2
16.9
55.7
4Q
1,407
3.4
84,240
21.3
38.1
11.8
26.3
24.2
1,580
16.5
18,360
13.1
53.3
13.0
91,691
84.5
16.9
56.5
1Q
1,434
1.9
87,350
9.7
36.8
11.7
25.1
23.9
1,489
23.2
17,179
-6.4
21.3
12.2
95,522
82.7
16.6
56.3
FY15
2Q
3QE
1,491
1,508
4.0
1.1
92,830
93,775
13.4
12.3
37.0
36.3
12.0
12.3
25.0
24.0
23.9
22.9
2,160
1,194
21.0
21.0
19,220
17,898
11.9
-6.9
28.6
10.2
13.6
12.7
100,240 103,340
82.9
83.0
16.4
55.8
FY14
4QE
1,560
3.5
98,301
16.7
37.1
12.2
24.9
23.8
1,936
21.0
20,024
11.9
9.1
14.2
106,340
83.9
(INR m)
FY15E
5,360
14.4
329,180
27.9
38.6
12.3
26.3
24.1
-160
19.5
63,710
5,992
11.8
372,256
13.1
36.8
12.1
24.7
23.6
6,780
21.5
74,322
58.3
45.1
91,691
16.7
52.7
106,340
E: MOSL Estimates
April 2015
Hexaware Technologies
Bloomberg
HEXW IN
Equity Shares (m)
300.7
94 / 2
52-Week Range (INR)
CMP: INR313
n
317 / 131
1,6,12 Rel Perf. (%)
18 / 49 / 70
n
n

Y/E DEC
2013 2014E 2015E 2016E
Sales
22.9
25.8
31.7
37.6
EBITDA
5.1
4.8
6.1
7.3
PAT
3.8
3.3
4.6
5.6
EPS (INR)
12.6
10.6
15.1
18.6
EPS Gr. (%)
15.6
-15.6
42.2
22.6
BV/Sh. (INR)
39.9
42.9
44.4
47.9
RoE (%)
31.6
25.7
34.7
40.2
RoCE (%)
33.9
28.2
33.7
37.3
Payout (%)
85.8
77.4
77.2
68.2
24.8
29.4
20.7
16.9
7.9
7.3
7.1
6.5
16.7
18.2
14.3
12.2
3.5
2.7
3.8
4.2
n
n
Sell
We expect USD revenue to grow 5% QoQ in constant currency.

Cross currency movements are expected to impact growth by
130bp due to which reported USD revenue growth will be 3.7%.
In INR terms, we expect revenue to grow 3.8% QoQ to INR7.39b.
We model EBITDA margin decline of 90bp QoQ to 19.4%. Our
estimate of slight contraction is on the back of multiple onsite
centric large deal wins, which should drive growth. The company
has also stated that it would keep utilization in the current band.
Our PAT estimate for the quarter is INR989m, up 5.3% QoQ, and the
implied PAT margin estimate is 13.4%, up 20bp QoQ.
As of CY14, HEXW has not won any large deals but continues to
pursue several multi-year annuity revenue deals, which are
expected to close in CY15.
The stock trades at 20.7x CY15E and 16.9x CY16E earnings. Sell.
Valuation
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div yld (%)
Quarterly Performance (Indian GAAP)

Y/E Dec
1Q
Revenue (USD m)
96
QoQ (%)
-4.3
Revenue (INR m)
5,889
YoY (%)
16.0
GPM (%)
36.8
SGA (%)
17.5
EBITDA Margin (%)
19.2
EBIT Margin (%)
17.4
Other income
-50
ETR (%)
27.9
PAT
703
QoQ (%)
-31.9
YoY (%)
-11.3
EPS (INR)
2.3
Headcount
8,952
Utilization (%)
72.9
Attrition (%)
12.8
Offshore rev. (%)
47.1

Large deal pipeline and traction post increased S&M spend.
Commentary on sustenance of revenue growth and margins.
Dividend payout during the quarter.
(INR m)
CY14
2Q
3Q
102
110
6.5
7.8
6,104
6,706
13.8
8.0
36.2
37.3
19.6
19.3
16.7
18.0
14.9
16.4
83
-11
22.9
20.9
765
860
8.8
12.4
-21.9
-13.0
2.5
2.9
9,287
9,697
70.8
70.3
12.7
13.0
45.2
43.8
4Q
115
4.1
7,118
14.8
37.4
17.5
19.9
18.3
-112
21.3
939
9.2
-9.0
2.9
10,016
73.0
14.1
42.4
1Q
119
3.7
7,387
25.4
37.5
18.0
19.5
18.0
-42
23.0
989
5.3
40.7
3.3
10,379
74.0
42.8
CY15E
2Q
3Q
124
129
4.8
3.8
7,841
8,143
28.5
21.4
37.3
37.2
18.0
18.0
19.3
19.2
17.8
17.7
120
87
23.0
23.0
1,168
1,178
18.1
0.8
52.7
37.0
3.9
3.9
10,806
11,287
74.5
74.0
42.8
42.8
4Q
133
2.9
8,375
17.7
37.3
18.0
19.3
17.9
82
23.0
1,217
3.3
29.6
4.0
11,605
74.0
42.8
CY14
CY15E
422
8.9
25,817
13.0
36.9
18.4
18.5
16.8
-90
23.1
3,267
505
19.7
31,746
23.0
37.3
18.0
19.3
17.8
247
23.0
4,552
-13.8
10.6
10,016
72.9
39.3
15.1
11,605
75.5
44.5
42.8
E: MOSL Estimates
April 2015
Infosys
Bloomberg
INFO IN
Equity Shares (m)
1148.5
2500 / 40
52-Week Range (INR)
CMP: INR2,177
n
2335 / 1447
1,6,12 Rel Perf. (%)
0/5/5
n

Y/E MARCH
2014 2015E 2016E 2017E
Sales
501.3
538.0
610.1
706.3
EBITDA
136.3
150.7
165.7
192.8
PAT
108.7
123.5
134.5
157.4
EPS (INR)*
93.2
108.1
117.7
137.7
EPS Gr. (%)
13.0
16.0
8.8
17.0
BV/Sh. (INR)
415.9
480.5
547.2
632.3
RoE (%)
24.9
26.0
24.5
25.0
RoCE (%)
28.1
27.3
26.1
26.5
Payout (%)
33.1
34.7
36.1
36.3
24.5
21.1
19.4
16.5
5.5
4.7
4.2
3.6
16.9
14.8
13.2
11.0
1.4
1.6
1.9
2.2
n
n
n
Buy
In 3QFY15, INFO retained its guidance of 7-9% YoY growth in FY15

at currency rates prevailing as on September 30, 2014. This implied
that the guidance does not factor the significant depreciation of
global currencies v/s the US dollar.
Factoring the same, the restated guidance on prevailing currency
rates is growth of 5.4-7.4%. Our current estimate is 6.4% growth, at
the midpoint of this guidance (USD8.8b).
For 3QFY15, we expect INFO to grow its revenue by 0.7% QoQ to
USD2.23b. In CC terms, we expect a revenue growth of 2.7%, and
cross currency to have a negative impact of 200bp QoQ.
We expect the EBIT margin to decline 70bp QoQ to 26% due to
headwinds faced from cross currency movements.
Our other income estimate for the quarter is INR6.9b, while the PAT
estimate is INR31.2b, down 3.9% QoQ.
The stock trades at 19.4x FY16E and 16.5x FY17E earnings. Buy.
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
Quarterly Performance (IFRS)

Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Attrition (%)
Offshore rev. (%) (IT Serv)
Fixed Price (%)
1Q
1,991
2.7
112,670
17.2
37.9
11.4
26.5
23.6
5,770
26.8
23,740
-0.8
3.7
20.8
157,263
74.3
16.9
42.5
40.1

Growth guidance for FY16.
Strategy unveiling and capital allocation plan.
Commentary on outlook of CY15 client budgets.
Deal signings in BITS and commentary on margins.
FY14
2Q
3Q
2,066
2,100
3.8
1.6
129,650 130,260
31.5
25.0
37.9
38.9
11.8
11.1
26.1
27.8
23.6
25.0
5,100
7,310
26.4
27.9
26,260
28,750
10.6
9.5
10.8
21.4
21.1
25.2
160,227 158,404
77.5
76.9
17.3
18.1
43.4
44.9
40.2
41.0
4Q
2,092
-0.4
128,750
23.2
39.8
11.5
28.3
25.5
8,510
27.6
29,920
4.1
25.0
26.2
160,405
76.7
18.7
45.3
41.6
1Q
2,133
2.0
127,700
13.3
38.8
11.8
26.9
25.1
8,290
28.6
28,860
-3.5
21.6
25.3
161,284
80.1
19.5
45.5
40.1
FY15
2Q
3Q
2,201
2,218
3.2
0.8
133,420 137,960
2.9
5.9
40.7
40.6
12.4
11.9
28.3
28.7
26.1
26.7
8,770
8,400
29.0
28.2
30,960
32,500
7.3
5.0
17.9
13.0
27.1
28.4
165,411 169,638
82.3
82.7
20.1
20.4
45.4
45.2
41.4
42.9
4QE
2,234
0.7
138,924
7.9
40.2
12.1
28.1
26.0
6,920
27.5
31,218
-3.9
4.3
27.3
175,004
82.8
FY14
(INR m)
FY15E
8,249
11.5
501,330
24.2
38.6
11.4
27.2
24.5
26,690
27.2
106,480
8,786
6.5
538,004
7.3
40.1
12.1
28.0
26.0
32,380
28.3
123,538
13.0
93.2
160,405
77.4
16.0
108.1
175,004
82.8
E: MOSL Estimates
April 2015
10
KPIT Technologies
Bloomberg
KPIT IN
Equity Shares (m)
198.6
M.Cap. (INR b) /(USD b)
40/1
52-Week Range (INR)
-9/12/-10
n

Y/E MARCH
2014 2015E 2016E 2017E
Sales
26.9
30.1
34.5
39.7
4.2
4.0
4.9
6.0
PAT
2.4
2.6
3.0
3.9
EPS (INR)
12.6
13.2
15.2
19.5
EPS Gr. (%)
19.0
4.9
15.3
28.6
BV/Sh. (INR)
64.0
66.1
81.3
100.8
RoE (%)
20.7
20.3
20.6
21.4
RoCE (%)
29.9
23.2
26.4
28.0
8.8
11.4
13.2
12.8
15.4
14.7
12.7
9.9
Payout (%)
Valuations
P/E (x)
233/140
1, 6, 12 Rel. Per (%)
EBITDA
CMP: INR193
P/BV (x)
3.0
2.9
2.4
1.9
EV/EBITDA (x)
8.4
8.6
6.4
4.6
Div Yield (%)
0.6
0.8
1.0
1.3
Quarterly Performance (Indian GAAP)

Y/E March
1Q
Revenue (USD m)
109
QoQ (%)
3.1
Revenue (INR m)
6,132
YoY (%)
13.9
GPM (%)
31.5
SGA (%)
15.7
EBITDA Margin (%)
15.9
EBIT Margin (%)
13.9
Other income
59
Interest
63
ETR (%)
29.0
PAT
601
QoQ (%)
17.5
YoY (%)
23.7
EPS (INR)
3.0
Headcount
8,456
73.4
Offshore rev. (%)
45.8
Fixed Price (%)
23.2
n
n
Neutral
Cross currency movements during the quarter will impact USD

revenue growth by 200bp. Normally, due to higher proportion of
revenues coming from US geography, cross currency movement
impact for KPIT has been half of the industry.
However, growth in 4Q would be dominated by regions outside US
due to which reported revenue growth will be flat at USD126m.
KPIT would miss its annual guidance of at least USD498m revenues
due to deferral of ramp up in one JD Edwards project and slippage
in milestone of one SAP project to next quarter.
EBITDA margin is expected to decline 90bp QoQ to 13% due to
lower revenue growth.
Our PAT estimate is INR769m, up 17.8% QoQ, due to normalized tax
rate of 5% v/s 22.3% in 3QFY15 due to tax credit from merger of an
acquisition and consequent write-off of Goodwill.
KPIT trades at 12.7x FY15E and 9.9x FY16E earnings. Neutral.

Guidance for FY16.
Commentary on growth in top account (Cummins) and Energy
vertical exposure of IES.
Margin performance and outlook.
FY14
2Q
3Q
112
110
3.1
-2.3
7,028
6,779
23.9
20.4
33.6
32.8
18.1
17.4
15.5
15.4
13.4
13.4
23
18
74
79
24.9
28.2
667
608
11.0
-8.9
64.1
1.5
3.4
3.1
8,816
9,136
72.9
71.3
45.4
47.2
23.6
24.4
4Q
114
3.6
7,001
22.9
32.0
15.9
16.1
14.2
-174
71
27.7
515
-15.3
0.6
3.1
9,296
70.9
45.7
27.1
1Q
115
1.4
6,897
12.5
26.5
14.4
12.1
9.7
101
40
30.4
508
-1.3
-15.5
2.5
9,490
70.2
42.8
28.4
FY15
2Q
3Q
125
126
8.5
1.2
7,574
7,798
7.8
15.0
29.7
31.1
16.4
17.2
13.3
13.9
10.1
11.1
42
25
39
51
8.1
22.3
706
653
39.1
-7.5
5.8
7.5
3.5
3.3
9,933
10,291
71.6
70.2
48.9
46.5
29.6
33.8
4QE
126
0.0
7,866
12.3
30.0
17.0
13.0
10.5
31
46
5.0
769
17.8
49.4
3.8
10,500
69.0
45.8
FY14
(INR m)
FY15E
444
8.3
26,940
20.3
32.5
16.8
15.7
13.7
-74
287
28.2
2,391
493
11.0
30,135
11.9
29.4
16.3
13.1
10.4
199
176
16.3
2,637
19.1
12.6
9,296
72.1
46.0
10.3
13.2
10,500
70.2
46.1
E: MOSL Estimates
April 2015
11
MindTree
Bloomberg
MTCL IN
Equity Shares (m)
83.3
120 / 2
52-Week Range (INR)
1501 / 649
1,6,12 Rel Perf. (%)
2 / 22 / 78

Y/E MARCH
2014 2015E 2016E 2017E
Sales
30.3
35.6
43.4
51.4
6.1
7.2
9.2
11.0
EBITDA
PAT
4.5
5.5
6.6
7.9
EPS (INR)
53.9
65.6
78.3
94.0
EPS Gr. (%)
31.8
21.7
19.5
20.1
BV/Sh. (INR)
195.7
240.8
295.1
360.2
RoE (%)
30.5
30.0
29.2
28.7
RoCE (%)
35.5
33.5
34.9
34.3
Payout (%)
23.2
25.9
25.5
25.5
26.8
22.0
18.4
15.3
Valuation
P/E (x)
n
n
n
n
n
n
P/BV (x)
EV/EBITDA (x)
CMP: INR1,443
7.4
6.0
4.9
4.0
18.6
15.6
12.0
9.7
0.9
1.2
1.4
1.7
Div Yld (%)
Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Util incl. trainees (%)
Attrition (%)
Offshore rev. (%)
Fixed Price (%)
1Q
118
4.2
6,477
15.0
41.0
22.6
18.4
15.6
735
22.4
1,354
71.6
52.1
16.2
12,239
69.6
12.4
61.3
40.8
Neutral
We model 4QFY15 revenue at USD148m, up 0.2% QoQ, which

includes 150bp of negative cross currency impact.
On constant currency basis, we expect a low 1.7% QoQ growth
during the quarter due to delay in the starting of two client projects
in CPG vertical.
In INR terms, our revenue estimate stands at INR9.2b, up 1% QoQ,
aided by INR depreciation of 0.8% to INR62.2/USD.
Our estimate for EBITDA margin is 20.5%, flat QoQ. We estimate
gross margin at 42%, down 30bp QoQ, and SGA at 21.5%, down
30bp QoQ.
Our PAT estimate for the quarter is INR1.43b, which implies a PAT
margin of 15.6% and PAT growth of 1.7% QoQ. We model INR80m
of forex gains and INR151m of other income.
MTCL signed deals worth TCV of USD480m in 9MY15, and is
expected to continue its momentum on that front.
The stock trades at 18.4x FY16E and 15.3x FY17E earnings. Neutral.

Comments on nature of delay in project ramp ups in CPG.
Margin trajectory, going forward.
Deal wins during the quarter.
Performance and outlook of the Hi-tech vertical.
FY14
2Q
3Q
124
127
5.4
2.5
7,696
7,906
29.1
34.0
42.2
40.8
21.4
21.3
20.8
19.5
18.2
16.8
248
-189
23.0
22.6
1,287
885
-4.9
-31.2
78.3
-10.4
15.4
10.5
12,941
12,992
65.9
67.4
11.9
11.6
58.6
57.2
40.4
41.4
4Q
133
4.5
8,237
34.5
40.9
19.4
21.5
18.8
-298
21.3
984
11.2
24.7
11.7
12,926
68.5
12.7
56.2
42.5
1Q
141
6.4
8,435
30.2
42.2
22.2
20.0
17.3
210
22.4
1,294
31.5
-4.4
15.4
12,845
72.1
14.2
55.8
43.8
FY15
2Q
3Q
147
148
4.0
0.5
8,886
9,117
15.5
15.3
41.5
42.3
21.8
21.8
19.8
20.5
17.1
17.6
241
210
22.0
22.4
1,374
1,408
6.2
2.5
6.8
59.1
16.4
16.7
13,018
13,323
73.5
71.8
15.7
18.1
54.4
54.2
43.6
46.5
4QE
148
0.2
9,206
11.8
42.0
21.5
20.5
17.6
231
22.5
1,432
1.7
45.5
17.0
13,773
72.0
53.9
FY14
(INR m)
FY15E
502
15.1
30,316
28.4
41.2
21.1
20.1
17.4
496
22.0
4,510
584
16.4
35,644
17.6
42.0
21.8
20.2
17.4
892
22.3
5,508
33.1
53.9
12,926
67.8
22.1
65.6
13,773
72.3
58.2
54.6
E: MOSL Estimates
April 2015
12
Mphasis
Bloomberg
MPHL IN
Equity Shares (m)
210.0
82 / 1
52-Week Range (INR)
CMP: INR389
n
477 / 331
1,6,12 Rel Perf. (%)
2 / -11 / -32
n

Y/E MARCH
2014 2015E 2016E 2017E
Sales
25.9
57.5
60.0
65.6
EBITDA
4.4
8.7
9.3
10.1
PAT
3.1
6.5
7.3
7.9
EPS (INR)
14.7
30.1
33.9
36.7
EPS Gr. (%)*
-0.1
-14.6
12.4
8.4
BV/Sh. (INR)
243.5
260.3
272.9
285.2
RoE (%)*
14.8
12.2
13.0
13.4
RoCE (%)*
16.7
13.1
13.5
14.5
Payout (%)
47.6
53.1
55.3
58.5
Valuations
P/E (x)*
9.9
11.6
10.3
9.5
P/BV (x)
EV/EBITDA
( )*
Div yld (%)
1.4
1.3
1.3
1.2
5.3
5.7
5.1
4.5
4.8
4.6
5.4
6.1
*Annualized values for 5m FY14
Neutral
For MPHL, the HP channel is likely to continue its rate of decline in

4QFY15, in line with the companys initial forecast of 20% volume
decline in FY15. Direct Channel (excluding Digital Risk) is expected
to grow at a healthy rate of 2.5-3% during the quarter.
Revenue from Digital Risk is expected to be flattish from the low of
last quarter, before rebounding in 1QFY16.
Overall, we model a revenue decline of 0.8% QoQ to USD225m. We
estimate INR revenue at INR13.8b, at an exchange rate of
INR62.2/USD.
EBITDA margin is estimated to decline 20bp QoQ to 12.8%, as the
weakness in Digital Risk continues to be a pressure on margins,
which are expected to be at the lower end of 13-15% guided band.
We expect PAT to be INR1.45b (-12% QoQ); our PAT margin
estimate is 10.5% (down 120bp QoQ). Our other income estimate is
INR291m v/s INR497m in 3QFY15.
The stock trades at 10.3x FY16E and 9.5x FY17E EPS. Neutral.

Outlook for Digital Risk and HP channel.
Deal TCV during the quarter in Direct Channel (organic business).
Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
EBIT Margin (%)
Other income
Interest Expense
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Net Additions
HP Channel rev. (%)
Fixed Price (%)
5M FY14
Jan-14 Mar-14*
250.9
169.5
-0.6
1.3
15,640
10,299
24.4
-26.7
28.2
28.5
10.8
11.4
16.9
17.1
15.0
15.1
279
221
68
43
26.8
29.4
1,870
1,221
-1.7
-2.1
1.4
-30.8
8.6
5.8
35,876
35,663
-1176
-213
37.3
36.2
13.1
13.6
Jun 14
248.8
-2.1
14,902
-3.2
27.8
10.9
16.6
14.8
356
77
29.8
1,748
-4.6
-9.2
8.3
35,497
-166
36.0
13.3
FY15
Sep 14
Dec-14
240.4
226.9
-3.4
-5.6
14,649
14,108
-8.1
-9.8
26.7
24.9
12.1
10.2
14.6
14.6
13.0
13.0
439
497
91
61
28.7
27.1
1,602
1,651
-8.4
3.1
-15.8
-11.7
7.6
7.7
36,015
35,208
518
-807
35.8
34.6
13.8
Mar-15E
225.0
-0.8
13,880
34.8
24.9
10.6
14.4
12.8
291
70
27.5
1,452
-12.0
-20.7
6.8
33,897
-1311
5M
FY14
420
0.3
25,939
7.4
28.3
11.0
17.0
15.2
500
-111
26.0
3,091
-58.4
14.7
35,663
-1389
36.8
(INR m)
FY15E
941
-6.7
57,539
-7.6
26.1
11.0
15.1
13.4
1,583
-299
28.3
6,453
108.8
30.1
33,897
-1766
16.7
E: MOSL Estimates, *Comparison adjusted for 5M FY14
April 2015
13
Persistent Systems
Bloomberg
PSYS IN
Equity Shares (m)
80.0
62 / 1
52-Week Range (INR)
961 / 444
1,6,12 Rel Perf. (%)
-14 / -3 / 16
CMP: INR774
n
n

Y/E MARCH
2014 2015E 2016E 2017E
Sales
16.7
19.0
22.8
27.3
4.3
3.9
4.8
6.0
EBITDA
Adj. PAT
2.5
2.8
3.2
4.1
Adj. EPS (INR)
31.2
35.2
40.6
51.2
EPS Gr. (%)
32.9
12.9
15.5
26.2
RoE (%)
22.3
21.4
21.5
23.2
RoCE (%)
21.9
24.2
19.1
20.6
Payout (%)
19.3
24.2
29.6
23.4
24.8
22.0
19.1
15.1
4.9
4.3
3.7
3.1
EV/EBITDA (x)
12.6
13.3
10.6
8.1
Div. Yield (%)
0.8
1.1
1.6
1.6
Neutral
We expect PSYS to miss its annual revenue growth guidance of 15%

for which it had an ask rate of 9% QoQ due to client specific issues.
We estimate 4QFY15 revenue to grow 2.7% QoQ to USD82m. We
expect Services to grow 1.5% QoQ to USD65.4m and IP-led revenue
to grow 7.9% QoQ to USD16.3m. In INR terms, we expect revenue
to grow 2.7% QoQ to INR5.08b.
We expect EBITDA margin to be flat at 20.1%, as PSYS continues to
make investments for its EDT strategy. We expect SGA at 19.2%, 30bp QoQ, and gross margin at 39.9%, -30bp QoQ.
Our PAT estimate for the quarter is INR667m, down 10.4% QoQ.
Our estimate for other income is INR134m, compared to INR245m
in 3QFY15, including a forex gain of INR4m during the quarter,
compared to forex gains of INR130m in 3QFY15.
Valuations
P/E (x)
P/BV (x)

Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
QoQ (%)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Attrition (%)
IP rev. proportion(%)
1Q
63
1.5
3,573
7.0
18.8
41.1
19.3
21.7
15.1
263
28.9
571
10.0
37.3
7.1
7,144
70.0
14.2
15.1

Growth and outlook for top clients.
Commentary on traction with Enterprise customers and potential
of winning large deals.
Outlook on sustainable profit margins in the near-to-medium
term.
FY14
2Q
3Q
68
70
8.6
2.2
4,324
4,328
21.0
0.1
32.3
30.0
43.9
43.8
17.9
16.1
26.0
27.7
19.9
21.6
-24
-70
27.2
25.8
608
642
6.5
5.6
36.1
29.7
7.6
8.0
7,457
7,602
71.7
72.9
14.0
13.2
19.1
17.8
4Q
73
3.9
4,467
3.2
33.8
42.8
15.8
27.0
21.1
-19
27.2
672
4.7
29.5
8.4
7,857
69.2
13.4
19.6
1Q
73
0.0
4,350
-2.6
21.7
40.1
18.3
21.8
16.6
233
27.9
688
2.4
20.5
8.6
7,876
67.7
14.0
20.0
FY15
2Q
76
5.0
4,642
6.7
7.4
40.2
19.6
20.6
15.5
274
28.2
713
3.6
17.3
8.9
8,067
70.3
14.1
19.6
3Q
80
4.2
4,946
6.6
14.3
40.2
19.5
20.1
15.1
245
25.1
745
4.4
16.0
9.3
8,296
74.3
14.7
19.0
4QE
82
2.7
5,082
2.7
13.8
39.9
19.2
20.1
15.1
134
26.0
667
-10.4
-0.7
8.3
8,410
74.5
19.9
FY14
(INR m)
FY15E
274
15.2
16,692
310
13.2
19,020
28.9
43.0
17.2
25.8
19.6
150
27.3
2,493
13.9
40.1
19.4
20.6
15.6
886
26.8
2,813
32.9
31.2
7,857
70.9
12.9
35.2
8,410
71.4
18.0
19.6
E: MOSL Estimates
April 2015
14
TCS
Bloomberg
TCS IN
Equity Shares (m)
1958.7
4987 / 80
52-Week Range (INR)
2834 / 2001
1,6,12 Rel Perf. (%)
-2 / -15 / -9
CMP: INR 2,546

n

Y/E MARCH
2014 2015E 2016E 2017E
Sales
818.1
949.9 1093.8 1272.6
EBITDA
251.3
272.9
PAT
191.2
212.7
248.6
296.2
97.6
108.6
126.9
151.2
EPS (INR)
311.5
367.0
EPS Gr. (%)
37.0
11.3
16.8
19.2
BV/Sh. (INR)
282.5
335.2
410.1
499.6
RoE (%)
39.7
35.2
34.1
33.2
RoCE (%)
47.6
40.6
38.9
37.8
Payout (%)
32.8
35.0
33.9
33.7
26.1
23.4
20.1
16.8
9.0
7.6
6.2
5.1
EV/EBITDA (x)
19.1
17.3
14.9
12.4
Div. yield (%)
1.3
1.5
1.7
2.0
n
n
Neutral
In terms of 4QFY15 performance, TCS expects revenue in constant

currency to be in line with 4QFY14 (1.9% QoQ CC growth)
performance.
TCS expects the cross currency movements to have an adverse
impact of ~230bp. We expect 2.7% QoQ growth in constant
currency, and estimate reported revenue at USD3.95b, +0.4% QoQ.
Gross margin is estimated to be flat at 46.1% and our SGA estimate
is 17.3%, resulting in flat margins during the quarter. Adverse
movements in cross currencies have been accompanied by marginal
appreciation of the INR (30bp) during the quarter. Hence, there is a
negative impact of 40bp on margins during the quarter. We expect
that to be offset by internal efficiencies.
Our PAT estimate for the quarter is INR54.8b, up 0.7% QoQ, on the
back of lower forex gains (INR2b v/s INR2.93b in 3Q).
Valuation
P/E (x)
P/BV (x)

Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Attrition (%)
Offshore rev. (%)
Fixed Price (%)
1Q
3,165
4.1
179,871
21.0
47.2
18.6
28.6
27.0
4,477
23.2
39,922
11.0
21.7
20.4
277,586
82.7
10.5
48.5
52.2

Commentary on FY16 growth outlook.
Outlook on Retail and Insurance verticals.
Trends in Digital Technologies and TCS progress.
FY14
2Q
3Q
3,337
3,438
5.4
3.0
209,772 212,940
34.3
32.5
49.0
49.3
17.3
17.9
31.6
31.4
30.2
29.7
-963
5,386
25.0
24.0
46,483
51,797
16.4
11.4
32.4
45.8
23.7
27.1
285,250 290,713
83.4
84.3
10.9
10.9
48.1
47.8
51.5
51.7
4Q
3,503
1.9
215,511
31.2
48.0
17.1
30.9
29.1
6,990
23.4
52,967
2.3
47.3
27.0
300,464
83.8
10.4
47.4
52.4
1Q
3,694
5.5
221,110
22.9
46.3
17.5
28.8
26.3
8,151
23.1
50,578
-4.5
26.7
25.8
305,431
85.3
12.0
47.2
52.5
FY15
2Q
3Q
3,929
3,931
6.4
0.1
238,165 245,011
13.5
15.1
45.6
46.1
17.0
17.3
28.6
28.8
26.8
27.0
5,659
6,295
23.1
24.1
52,883
54,442
4.6
2.9
13.8
5.1
27.0
27.8
313,757 318,625
86.2
86.7
12.8
13.4
45.7
46.0
51.3
51.7
4QE
3,948
0.4
245,596
14.0
46.1
17.3
28.8
27.0
5,736
23.0
54,836
0.7
3.5
28.0
328,066
87.1
46.0
FY14
(INR m)
FY15E
13,443
16.2
818,094
29.9
48.4
17.7
30.7
29.1
15,891
23.9
191,168
15,503
15.3
949,883
16.1
46.0
17.3
28.7
26.8
25,841
23.3
212,739
37.1
97.6
300,464
83.6
11.3
108.6
328,066
86.3
47.9
46.2
E: MOSL Estimates
April 2015
15
Tech Mahindra
Bloomberg
TECHM IN
Equity Shares (m)
937.3
603 / 10
52-Week Range (INR)
-7 / -6 / 16
n

Y/E MARCH
2014 2015E 2016E 2017E
Sales
188.3
225.4
284.0
335.7
EBITDA
41.8
42.8
52.0
62.7
Adj. PAT
29.2
28.5
34.4
42.4
Adj. EPS (INR)
28.7
32.1
38.7
47.8
EPS Gr. (%)
30.7
11.7
20.6
23.3
BV/Sh.(INR)
112.3
141.6
171.7
209.5
RoE (%)
36.4
26.7
25.5
25.8
RoCE (%)
34.7
28.5
28.7
29.7
Payout (%)
16.3
17.3
19.4
18.3
22.4
20.0
16.6
13.5
5.7
4.5
3.7
3.1
EV/EBITDA (x)
11.7
12.3
9.9
7.9
Div. Yield (%)
0.8
0.9
1.2
1.4
Valuations
P/BV (x)
750 / 419
1,6,12 Rel Perf. (%)
P/E (x)
CMP: INR 643
Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
EBIT Margin (%)
Other income
Interest expense
ETR (%)
PAT excl. BT amort & EOI
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Attrition (%)
Offshore rev. (%)
1Q
724
3.7
41,032
21.7
37.4
16.3
21.1
18.2
2,073
223
25.0
6,528
8.1
28.8
7.4
83,063
76.0
14.0
49.1
n
n
n
Buy
For 4QFY15, we expect TECHM to grow it total revenues by 7.4%

QoQ to USD993m in reported currency. This includes LCC revenue
contribution of ~USD85m and adverse cross currency movement
impact of 250bp on revenues.
Organically, in CC terms, we expect TECHM to grow 0.5% QoQ, as
the Telecom vertical is expected to see a decline QoQ due to client
specific issues.
EBITDA margin is likely to decline 240bp to 17.8% on multiple
headwinds: [1] integration of LCC (85bp impact), [2] wage hikes
(150-200bp impact) and [3] cross currency movements.
Our estimate of other income is INR183m (v/s INR190m in 3Q),
which includes forex loss of INR342m (v/s a loss of INR356m in 3Q).
Our PAT estimate is INR6.94b, which implies a decline of 10.7%
QoQ, primarily due to decline in operating margins.
TECHM trades at 16.6x FY16E and 13.5x FY17E EPS. Buy.

Deals TCV following healthy deal signings activity in 9MFY15.
Outlook on near term profitability and growth.
Large deals progress in the Enterprise and Telecom business.
Progress in the network deal and outlook on its profitability.
FY14
2Q
3Q
758
791
4.7
4.4
47,715
48,985
35.4
33.5
39.6
38.7
16.3
15.5
23.3
23.2
20.7
20.3
380
-457
241
112
28.3
26.9
6,848
6,422
4.9
-6.2
62.1
123.0
7.8
6.9
85,234
87,399
75.0
75.0
14.0
15.0
49.0
47.7
4Q
825
4.3
50,581
34.3
35.8
14.6
21.2
18.4
-867
97
25.1
6,030
-6.1
-0.2
6.6
89,441
74.0
15.0
47.3
1Q
855
3.7
51,215
24.8
32.8
14.7
18.1
15.2
893
41
26.7
6,307
4.6
-3.4
6.7
92,729
72.0
16.0
46.3
FY15
2Q
3Q
900
924
5.2
2.7
54,879
57,517
15.0
17.4
34.1
34.5
14.1
14.4
20.0
20.2
17.4
17.7
576
190
41
38
27.8
24.4
7,196
7,769
14.1
8.0
5.1
21.0
7.6
8.8
95,309
98,009
73.0
74.0
18.0
19.0
44.8
44.7
4QE
993
7.4
61,773
22.1
32.3
14.5
17.8
15.1
183
109
26.0
6,938
-10.7
15.1
7.8
107,072
73.6
41.7
FY14
(INR m)
FY15E
3,098
17.7
188,313
31.4
37.9
15.7
22.2
19.4
1,129
673
26.4
25,828
3,673
18.5
225,384
19.7
33.4
14.4
19.0
16.3
1,842
229
26.2
28,210
41.8
28.7
89,441
75.0
9.2
32.1
107,072
74.4
48.2
44.3
E: MOSL Estimates
April 2015
16
Wipro
Bloomberg
WPRO IN
Equity Shares (m)
2466.0
1530 / 25
52-Week Range (INR)
677 / 475
1,6,12 Rel Perf. (%)
-4 / -8 / -16

Y/E MARCH
2014 2015E 2016E 2017E
Sales
434.3
469.6
528.0
601.6
EBITDA
97.1
104.3
121.5
141.8
PAT
78.0
85.9
93.6
108.3
EPS (INR)
31.7
34.8
37.9
43.8
EPS Gr. (%)
27.0
9.9
9.0
15.6
BV/Sh. (INR)
139.9
141.5
165.1
193.4
RoE (%)
24.9
24.9
24.8
24.6
RoCE (%)
22.5
22.3
24.1
24.8
Payout (%)
25.3
31.6
31.7
29.6
19.6
17.8
16.4
14.1
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
4.4
4.4
3.8
3.2
14.4
13.5
11.4
9.5
1.3
1.8
1.9
2.1
Div Yld (%)

Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
QoQ (%)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
IT Serv. EBIT (%)
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Attrition (%)
Offshore rev. (%)
Rev Guidance (USDm)
Fixed Price (%)
CMP: INR 620
Neutral
For 4QFY15, WPRO guided for revenue of USD1.814b-1.85b, up 13% QoQ. The guidance given is in constant currency and based on
the average 3Q cross currency rates. We estimate cross currency
headwinds of 220bp during the quarter.
n Our growth estimate for 4QFY15 stands at 0.3% in USD terms and
2.5% in constant currency terms, which is at the higher end of the
guidance band.
n Our overall INR revenue estimate is INR121.4b, up 1.3% QoQ, and
we assume realized currency rate to be INR62.7/USD (realized
INR/USD at WPRO in 3QFY15 was 63.2).
n Overall operating profit margin estimate is 19.4%, up 10bp QoQ.
Our gross margin estimate is 31.2%, up 30bp QoQ, and our SGA
estimate is 11.8%, +20bp QoQ. In IT Services, we estimate EBIT
margin of 22.3%, +50bp QoQ. We expect PAT of INR22.1b, up 0.9%
QoQ.
n The stock trades at 16.4x FY16E and 14.1x FY17E earnings. Neutral.
Revenue growth guidance for 1QFY16 and Energy vertical.
Commentary on large deal wins and ramp-up schedule.
Comments on the plan to go leaner, with increasing automation.
n
FY14
FY15
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4QE
1,588
1,631
1,678
1,720
1,740
1,772
1,795
1,801
0.2
2.7
2.9
2.5
1.2
1.8
1.3
0.3
97,294 107,727 112,713 116,535 111,358 116,838 119,929 121,431
1.3
10.7
4.6
3.4
-4.4
4.9
2.6
1.3
7.1
16.8
18.5
21.3
14.5
8.5
6.4
4.2
30.9
31.1
32.2
33.3
32.7
30.8
30.9
31.2
12.8
12.3
12.0
11.6
12.3
12.2
11.6
11.8
20.7
21.2
23.0
24.2
22.9
21.2
22.3
22.4
20.0
22.5
23.0
24.5
22.8
21.4
21.8
22.3
18.1
18.8
20.2
21.7
20.4
18.6
19.3
19.4
2,918
4,949
3,518
3,627
4,449
5,443
5,147
4,994
20.7
22.9
23.0
22.6
21.9
22.8
22.0
22.0
16,233
19,321
20,147
22,265
21,032
20,848
21,928
22,122
3.0
19.0
4.3
10.5
-5.5
-0.9
5.2
0.9
10.8
28.4
26.8
41.3
29.6
7.9
8.8
-0.6
6.6
7.8
8.2
9.0
8.5
8.5
8.9
9.0
147,281 147,216 146,402 146,053 147,452 154,297 156,866 158,681
73.3
74.3
74.3
76.5
77.9
79.4
78.8
78.0
13.2
13.5
14.3
15.1
16.1
16.5
16.5
46.1
45.8
45.9
45.9
45.7
46.3
45.7
45.7
1575-1610 1620-1650 1660-1690 1712-1745 1715-1755 1770-1810 1808-1842 1814-1850
47.4
48.2
50.6
51.3
52.1
53.1
55.1
FY14
(INR m)
FY15E
6,618
6.4
434,269
7,108
7.4
469,556
16.0
32.0
12.2
22.4
22.6
19.8
15,012
22.4
77,966
8.1
31.4
12.0
22.2
22.1
19.4
20,033
22.2
85,930
27.1
31.7
146,053
74.3
10.2
34.8
158,681
76.6
45.9
45.8
E: MOSL Estimates
April 2015
17
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March 2015 Results Preview | April 2015

4QFY15: Pronounced weakness poses questions

amid weak currencies, seasonal sluggishness and client-specific headwinds

Confluence of cross currency headwinds, budget seasonality

Exhibit 1: Expected quarterly performance summary (INR m)

Ashish Chopra (Ashish.Chopra@MotilalOswal.com); +91 22 3982 5424

Net Profit (INR M)

March 2015 Results Preview | Sector: Technology

So, is all well with the industry?

Expect HCLT to report sanguine CC growth, TECHM to lag

(Wait and) watch for INFOs commentary, WPROs guidance

March 2015 Results Preview | Sector: Technology

Source: Company, MOSL

Cross currency impact on USD revenues (bp)

Source: Company, MOSL

Source: Company, MOSL

March 2015 Results Preview | Sector: Technology

Source: Company, MOSL

EBITDA Margin (%)

*Includes ~USD85m from LCC integration

Source: Company, MOSL

March 2015 Results Preview | Sector: Technology

Exhibit 8: 4QFY15 currency highlights (INR)

Exhibit 9: 4QFY15 currency highlights (in USD)

Exhibit 10: Cross currencies: Assumed rates v/s actual

Impact on guided USD revenue

March 2015 Results Preview | Sector: Technology

Exhibit 11: EPS estimates (INR): MOSL v/s consensus

Exhibit 12: Comparative valuation

March 2015 Results Preview | Sector: Technology

Equity Shares (m)

M.Cap. (INR b) /(USD b)

52-Week Range (INR)

Financial Snapshot (USD b)

2013 2014E 2015E 2016E

EPS Gr. (%)

For 1QCY15, CTSH guided for at least USD2.88b revenue, implying

Key issues to watch for

March 2015 Results Preview | Sector: Technology

Equity Shares (m)

M. Cap. (INR b)/(USD b)

52-Week Range (INR)

Financial Snapshot (INR b)

2014 2015E 2016E 2017E

EPS Gr. (%)

Div Yield (%)

1,6,12 Rel Perf. (%)

Quarterly Performance (US GAAP)

We expect USD revenue growth of 1.1% QoQ to USD1.51b. As

Key issues to watch for

March 2015 Results Preview | Sector: Technology

Equity Shares (m)

M. Cap. (INR b)/(USD b)

52-Week Range (INR)

1,6,12 Rel Perf. (%)

Financial Snapshot (INR b)

2013 2014E 2015E 2016E

EPS Gr. (%)

We expect USD revenue to grow 5% QoQ in constant currency.

Quarterly Performance (Indian GAAP)

Key issues to watch for

March 2015 Results Preview | Sector: Technology

Equity Shares (m)