Wipro 4Q FY 2013

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Please refer to important disclosures at the end of this report 1

(` cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)Net revenue 11,026 11,025 0.0 9,869 11.7EBITDA 2,253 2,218 1.6 1,961 14.9

EBITDA margin (%) 20.4 20.1 31bp 19.9 56bp

PAT 1,737 1,725 0.7 1,481 17.3Source: Company, Angel Research

Wipro came out with a lower-than-expected set of results for 4QFY2013; the

results are lower on the revenue as well the margin front. The IT services USD

revenue growth came in at just 0.5% qoq. The only positive in the results was the

2.5% qoq volume growth in IT services. Going forward, for 1QFY2014, the

Management has given a USD revenue guidance of US$1,575mn-1,610mn,which translates into a qoq growth of -0.6 to +1.6%, which is well below our

expectation of +1.5-3.5% qoq growth. The Management has factored in the

continued uncertainty in ramp up of discretionary projects. We recommend anAccumulate rating on the stock.Quarterly highlights: For 4QFY2013, Wipros consolidated revenues came in at`11,026cr, almost flat qoq. The consolidated EBITDA margin increased by 31bp

qoq to 20.4%, while its EBIT margin declined by 98bp qoq to 16.7%. The overall

reported EBIT margin of the business, excluding demerged entities, stood at

17.8%, in line with estimates. The EBIT margin for IT services stood at 20.2%,

down ~60bp qoq. The PAT came in-line with expectations at `1,737cr, up 0.7%

qoq, aided by`

328cr of other income.Outlook and valuation: The Management has given a USD revenue guidance ofUS$1,575mn-1,610mn for 1QFY2014, which translates into a qoq growth of-0.6 to +1.6%. The soft guidance is on account of 1Q tending to be a seasonally

weak quarter for India and the Middle East geographies, which have been the

growth drivers in 4QFY2013. Additionally, revenues around discretionary

segments remain uncertain. The company however expects the growth rates to

improve going into 2QFY2014 and 3QFY2014. The Management indicated that

the pipeline for the company as on March 2013 appears similar to that as in

March 2012; however, the company sees itself better placed than around this

time last year, to latch on to the opportunities in the market. We expect USD and

INR revenue CAGR for IT services to be at 7.6% and 7.2%, respectively over

FY2013-15. We value the stock at 13.5x FY2015E EPS of `28.5, which gives us atarget price of `385. We recommend Accumulate rating on the stock.Key financials (Consolidated, IFRS)Y/E March (` cr) FY2011 FY2012 FY2013E FY2014E FY2015ENet sales 31,099 37,525 43,361 40,173 43,697% chg 14.7 20.7 15.6 (7.4) 8.8

Net profit 5,297 5,573 6,660 6,553 7,127% chg 15.3 5.2 19.5 (1.6) 8.8

EBITDA margin (%) 21.2 19.8 20.2 20.4 20.6

EPS (`) 21.7 22.7 27.0 26.2 28.5P/E (x) 17.0 16.2 13.7 14.1 12.9

P/BV (x) 3.8 3.2 3.2 2.8 2.4

RoE (%) 22.0 19.5 23.4 19.7 18.4

RoCE (%) 15.5 14.7 17.1 14.1 13.7

EV/Sales (x) 2.6 2.2 1.7 1.7 1.5

EV/EBITDA (x) 12.4 10.9 8.6 8.5 7.1

Source: Company, Angel Research; Note: *Closing price as on 18 April 2013

ACCUMULATECMP `369

Target Price `385

Investment Period 12 Months

Stock Info

Sector

Net debt (`cr) (9,020)

Bloomberg Code

Shareholding Pattern (%)

Promoters 78.3

MF / Banks / Indian Fls 3.3

FII / NRIs / OCBs 7.3Indian Public / Others 11.1

Abs. (%) 3m 1yr 3yr

Sensex (5.1) 9.3 8.1

Wipro (7.2) (13.7) (14.9)

Face Value (`)

BSE Sensex

Nifty

Reuters Code

90,448

0.8

418/290

147,559

IT

Avg. Daily Volume

Market Cap (`cr)

Beta

52 Week High / Low

2

19,016

5,783

WIPR.BO

WPRO@IN

Ankita Somani+91 22 3935 7800 Ext: 6819

[email protected]

WiproPerformance Highlights

4QFY2013 Result Update | IT

April 19, 2013

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Wipro | 4QFY2013 Result Update

April 19, 2013 2

Exhibit 1:4QFY2013 performance (Consolidated, IFRS)

Y/E March (` cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy) FY2013 FY2012 % chg (yoy)Net revenue 11,026 11,025 0.0 9,869 11.7 43,361 37,525 15.6Cost of revenue 7,201 7,281 (1.1) 6,580 9.4 29,772 26,317 13.1

Gross profit 3,826 3,744 2.2 3,289 16.3 13,588 11,207 21.2SG&A expense 1,573 1,526 3.1 1,328 18.4 6,074 4,806 26.4

EBITDA 2,253 2,218 1.6 1,961 14.9 8,752 7,414 18.0Dep. and amortization 415 272 52.6 267 55.7 1,237 1,013 22.2

EBIT 1,838 1,946 (5.6) 1,694 8.5 7,514 6,401 17.4

Other inc., net of finance chgs. 328 271 198 990 574

PBT 2,175 2,210 (1.6) 1,893 14.9 8,505 6,975 21.9

Income tax 438 485 (9.7) 402 9.0 1,835 1,376 33.3

PAT 1,737 1,725 0.7 1,491 16.5 6,670 5,599 19.1Minority interest - - 10 (100.0) 10 26 (62.1)

Adj. PAT 1,737 1,725 0.7 1,481 17.3 6,660 5,573 19.5

Diluted EPS (`) 7.0 6.9 1.7 6.0 16.3 27.0 22.7 18.9Gross margin (%) 34.7 34.0 (74)bp 33.3 137bp 31.3 29.9 147bp

EBITDA margin (%) 20.4 20.1 31bp 19.9 56bp 20.2 19.8 43bp

EBIT margin (%) 16.7 17.7 (98)bp 17.2 (50)bp 17.3 17.1 27bp

PAT margin (%) 18.7 18.1 62bp 15.1 362bp 17.6 16.4 126bp

Source: Company, Angel Research

Exhibit 2:4QFY2013 Actual vs Angel estimates

(` cr) Actual Estimate Variation (%)Net revenue 11,026 11,212 (1.7)

EBITDA margin (%) 20.4 20.3 17bp

PAT 1,737 1,675 3.7


Disappointing show, volume growth the only positive

For 4QFY2013, Wipros IT services revenue came in at US$1,585mn, up merely

0.5% qoq and below our estimate of an ~2.0% qoq growth. The only positive in

the results came in the form of an overall volume growth of 2.5% qoq (ie 2.4%

onsite and 2.5% offshore). The company reported a 2.3% and 1.0% qoq onsite

and offshore price realization decline respectively in constant currency (CC) terms

during 4QFY2013. Factors that contributed to the CC pricing decline include:

1) lower working days qoq, and 2) change in business mix (higher growth from

India and the Middle East geographies). In CC terms, the revenue growth was of

1.4% qoq. In INR terms, the revenue from the IT services segment came in at

`8,554cr, down 0.6% qoq.

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Exhibit 3:Volume trend (Effort wise)

0.2(0.1)

(1.1)

(0.1)

2.4

1.11.2

0.8

(1.3)

2.5

(2)

(1)

0

1

2

3

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

(%)

Onsite Offshore


Exhibit 4:Pricing trend (Effort wise, CC basis)

- 0.2

1.4

3.2

(2.3)

1.1

(1.0)

1.1

3.0

(1.0)

(3)

(2)

(1)

0

1

2

3

4


(%)

Onsite Offshore


Industry wise, Wipros growth was led by energy & utilities and manufacturing &

hi-tech industry verticals, the revenues from which grew by 3.9% and 3.4% qoq,

respectively, in CC terms.

For FY2013, energy & utilities was the only vertical that grew in double digits

(ie by ~19% yoy), aided by the acquisition of SAIC, while global media & telecom

was the only vertical that declined (-3.9% yoy).

Coming back to 4QFY2013, in tandem with its peers, Wipro reported a muted

revenue growth in the global media and telecom industry segment, the revenues of

which declined by 1.9% qoq in CC terms. The Management indicated that revenue

growth from the telecom industry is expected to remain sluggish for the next few

quarters. The revenue from retail & transportation and healthcare, lifesciences &

services grew by 1.3% and 2.8% qoq, respectively in CC terms. The Managementindicated that the company is seeing bottoming out of weakness in multiple

segments like in telecom OEMs and hi-tech, which should help growth from

2QFY2014 onwards.

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Exhibit 5:Revenue growth (Service wise CC basis)

% to revenue % growth (qoq) % growth (yoy)Global media and telecom 13.8 (1.9) (1.5)

Financial solutions 26.3 (0.3) 4.7Manufacturing and hi-tech 19.3 3.4 5.1

Healthcare, life sciences and services 10.1 2.8 5.7

Retail and transportation 15.1 1.3 3.1

Energy and utilities 15.4 3.9 15.1


Service wise, Wipros anchor service lines - business application services

(contributed 31.4% to revenue) and technology infrastructure services (contributed

24.5% to revenue) posted a 0.4% and 4.0% qoq revenue growth, respectively. The

application development and maintenance (ADM) segment (contributed 20.7% to

revenue) declined by 3.4% qoq. The analytics and information management

services segment, the R&D business, and the BPO delivered an almost flat revenue

performance on a sequential basis. The Management indicated that analytics,

mobility and data will be the next growth drivers for the overall IT industry, and

that the company is making continuous investments in these areas. The company is

seeing bottoming out of weakness in multiple segments, such as the IMS business

out of India, and product engineering.

Exhibit 6:Revenue growth (Service wise)

Service verticals % to revenue % growth (qoq) % growth (yoy)Technology infrastructure services 24.5 4.0 12.0

Analytics and information management 7.1 0.3 7.2

Business application services 31.4 0.4 5.8

BPO 8.8 0.7 11.0

Product engineering and mobility 7.5 0.9 (4.3)

ADM 20.7 (3.4) (9.7)

R&D business 10.4 0.5 (10.0)

Consulting 2.4 5.2 (12.7)


Geography wise, Wipros primary revenue growth came in from India and the

Middle East geographies, which cumulatively grew by 7.0% qoq, while revenues

from Europe declined by 0.9% qoq in CC terms.

For the full year FY2013, it was the other emerging markets segment that drove

growth for Wipro, growing by ~25% yoy, while the others grew in low single digits.

Exhibit 7:Revenue growth (Geography wise, CC basis)

% to revenue % growth (qoq) % growth (yoy)America 50.1 1.0 (0.4)

Europe 28.5 (0.9) 8.3

India and Middle East 9.4 7.0 9.5

APAC and other emerging markets 12.0 4.3 20.3


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April 19, 2013 5

Segmental performance

During the quarter, the IT services segments revenue came in at US$1,585mn, up

0.5% qoq, with India and the Middle East geographies being the major revenue

drivers, cumulatively growing by 4.7% qoq.

Exhibit 8:IT services Revenue growth (qoq)

1.5

(0.9)

1.52.8

(0.3)

6.4

(4.8)

0.9(0.5)

4.7

(1.6)

1.1

5.3

3.5

0.5

2.0

(1.4)

1.7 2.40.5

(6)

(4)

(2)

0

2

4

6

8


(%)

Global IT India and Middle East BPO IT services


Exhibit 9:Global IT services revenue trend

0.8

0.8

0.2

(1.0)

2.5

2.0

(1.4)

1.7

2.4

0.5

(2.0)

(1.5)

(1.0)

(0.5)

0.0

0.5

1.0

1.5

2.0

2.5

3.0


(%)

Global IT volume growth IT services revenue growth (in USD)


The IT products segment reported a 14.7% yoy increase in its revenue to `1,075cr

during the quarter. The consumer care and lighting segment posted another

modest quarter with a 15.1% yoy growth in revenue to `1,044cr; the company is

hiving off this business into an unlisted entity.

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Exhibit 10:IT products Revenue growth (yoy)

937953

899

997

1,075

2.9

(5.2)

(10.2)

10.8

14.7

(15)

(5)

5

15

25

700

800

900

1,000

1,100


(%)

(`cr)

IT products yoy growth (%)


Exhibit 11:Consumer care and lighting Revenue growth (yoy)

907

980

1,0081,028

1,044

25.2

29.9

25.9

17.0

15.1 15

17

19

21

23

25

27

29

31

800

850

900

950

1,000

1,050

1,100


(%)

(`cr)

Consumer care and lightening yoy growth (%)


On a consolidated level, Wipros revenue came in at `11,026cr, almost flat qoq.

Hiring and utilization

Wipro reported a net addition of 2,907 employees in its IT services employee base,

which now stands at 145,812 headcounts. Voluntary attritions (annualized) in the

global IT business declined to 12.5% in 4QFY2012 from 12.9% in 3QFY2012. The

utilization rate of the global IT business remained almost flat qoq at 64.9%, which

is at low levels for the company on an historical basis. The Management indicated

that this is because of the following factors: 1) hyper automation process being

implemented in the run services, resulting in higher productivity; 2) freshers added

into the system and 3) lesser number of working days. Going ahead, increased

utilization level will be an important margin lever.

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Exhibit 12:Employee pyramid

Employee pyramid 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13Utilization Global IT (%) 67.4 68.3 66.8 64.8 64.9

Attrition (%)Global IT 14.4 15.2 14.4 12.9 12.5

BPO 15.1 13.4 14.4 12.5 12.8

Net additions (814) 2,632 2,017 2,336 2,907


Margins mixed

During 4QFY2013, Wipros consolidated EBITDA margin increased by 31bp qoq

to 20.4%, while its EBIT margin declined by 98bp qoq to 16.7% as depreciation

increased by 53% qoq. The overall reported EBIT margin in the business, excluding

demerged entities, stood at 17.8%, in line with estimates. The IT services segmentsEBIT margin was at 20.2%, down ~60bp qoq. The EBIT margin during the quarter

saw headwinds from currency and a qoq decline in productivity; however, factors

like a decline in SGA expenses as a percentage of sales by ~30bp qoq and a shift

in the mix by ~40bp qoq in favor of offshore, partially offset the same. The EBIT

margin of the IT products business segment grew by 10bp qoq to 2.5%.

Exhibit 13:Segment-wise EBIT margin trend

20.7 21.0 20.7 20.8 20.2

4.7

2.2 3.0 2.4 2.5

12.511.6

11.3

13.6

12.8

17.2 17.6 17.4 17.7 16.7

0

5

10

15

20

25


(%)

IT services IT products Consumer care and lightening Consolidated


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Client pyramid

Wipro added 52 new clients in 4QFY2013, with its active client base increasing to

978 from 966 in 3QFY2013. The companys client pyramid witnessed an addition

of three clients in the US$20mn-50mn revenue bracket. Overall, six clients were

added in the US$1mn+ revenue brackets. The companys revenue from its top

clients jumped up by 13% qoq, while revenues from the top 5/10 clients declined

by 0.3%/1.7% qoq.

Exhibit 14:Client metrics

Particulars 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13US$100mn plus 7 8 9 10 10

US$75mn$100mn 9 6 7 6 6

US$50mn$75mn 9 11 9 10 10

US$20mn$50mn 50 48 46 47 50

US$10mn$20mn 46 58 62 59 57US$5mn$10mn 87 82 62 82 80

US$3mn$5mn 84 89 85 79 78

US$1mn$3mn 183 176 182 191 199

New clients 41 37 53 50 52

Active customers 943 919 939 966 978


Outlook and valuation

For 1QFY2014, the Management has given a USD revenue guidance of

US$1,575mn-1,610mn, which translates into a qoq growth of -0.6 to +1.6%, well

below our expectation of +1.5-3.5% qoq growth. The guidance is also soft given

that 1Q traditionally is a strong quarter for IT companies. The Management has

factored in the continued uncertainty in ramp up of discretionary projects. It has

also taken into consideration the fact that 1Q tends to be a seasonally weak

quarter for India and Middle East geographies, which were the growth drivers in

4QFY2013 (accounting for 43% of incremental revenues). Additionally, revenues

around discretionary segments remain uncertain. The Management indicated that

CY2013 IT budgets are expected to remain stable and anticipates a positive

demand environment ahead. The company however expects the growth rates to

improve going into 2QFY2014 and 3QFY2014. Despite some healthy deal wins in

2QFY2013 and 3QFY2013, ramp-ups have continued to be slow.

The Management indicated that the pipeline for the company as on March 2013

appears similar to that in March 2012, which however is in contrast to the

commentary it had given in January 2013, of the deal pipeline being better.

However, the company sees itself better placed than this time last year, to latch on

to opportunities in the market. The Management cited that the company is facing

greater problems in winning deals in the hunting space than in the mining zone.

Win rates for Wipro in deals for traditional commoditized work are softer, which is

a concern given that the pipeline of IT companies in current conditions is

dominated by RTB type deals. We believe that the restructuring initiatives have not

yet started showing the expected results and will start reflecting in the financials of

the company in due course.

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April 19, 2013 9

We expect Wipros volume growth to continue to lag from some of its peer companies.

Wipro has chosen a growth strategy of focusing on a selected few segments in

terms of industry verticals and services. We expect Wipro's transition to take longer

than had been anticipated earlier, and the uncertain macro environment will

further push the timeline. We are modeling in an ~1% qoq USD revenue growth

for 1QFY2014 and an ~2.1% CQGR over 2Q-4QFY2014. We expect USD and

INR revenue CAGR for IT services to be at 7.6% and 7.2%, respectively over

FY2013-15.

Wipro has been showing a decent performance in the past five quarters by

rationalizing costs. The Management has indicated towards giving wage hikes

from June 1, the quantum of which is yet to be decided (the Management has

guided for a single digit increase in wages for offshore). This implies one months

impact on margins in 1QFY2014. On the operating front, Wipro has tailwinds of

improving utilization level and headwinds of moderate volume growth and wage

hikes. We expect the IT services EBIT margin to continue to be narrow; we expect

an EBIT margin of 19.7% and 19.8% for FY2014 and FY2015, respectively, for the

IT services segment. The stock is currently trading at 14.1x FY2014E and 12.9x

FY2015E EPS. We value the stock at 13.5x FY2015E EPS of `28.5, which gives usa target price of `385. We recommend Accumulate rating on the stock.Exhibit 15:Key assumptions

FY2014 FY2015Revenue growth IT services (USD) 6.6 8.5USD-INR rate (realized) 54.0 54.0

Revenue growth Consolidated (`) (7.4) 8.8

EBITDA margin (%) 20.4 20.6

Tax rate (%) 17.4 17.6

EPS growth (%) (2.9) 8.8


Exhibit 16:One-year forward PE chart

50

200

350

500

650

800

950

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12

Apr-13

(`)

Price 34x 28x 21x 14x 7x


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April 19, 2013 10

Exhibit 17:Recommendation summary

Company Reco. CMP Tgt. price Upside FY2015E FY2015E FY2012-15E FY2015E FY2015E(`) (`) (%) EBITDA (%) P/E (x) EPS CAGR (%) RoCE (%) RoE (%)

HCL Tech Buy 736 863 17.3 20.7 11.9 19.6 1.4 21.5Hexaware Buy 88 105 20.0 19.2 7.5 9.5 0.9 22.1

Infosys Accumulate 2,295 2,465 7.4 27.7 12.6 7.9 2.1 19.3

Infotech Enterprises Buy 163 196 20.2 18.5 7.5 14.5 0.4 13.1

KPIT Cummins Buy 96 130 35.6 15.2 6.6 21.8 0.4 18.8

Mahindra Satyam Buy 109 143 31.7 19.1 9.1 2.3 0.9 20.1

MindTree Accumulate 868 926 6.7 19.4 9.4 19.9 0.8 18.8

MphasiS Accumulate 356 395 11.1 17.4 8.6 3.3 0.6 13.6

NIIT Buy 23 30 30.4 9.1 4.3 (7.1) 0.1 11.9

Persistent Accumulate 549 602 9.6 24.6 9.1 19.3 0.9 16.8

TCS Accumulate 1,451 1,585 9.3 27.9 16.5 17.4 3.2 27.9

Tech Mahindra Buy 951 1,230 29.4 18.1 8.3 10.7 1.4 19.1

Wipro Accumulate 369 385 5.0 20.6 12.9 7.9 1.5 18.4Source: Company, Angel Research; Note: Closing price as on 18 April 2013

Company background

Wipro is one of the leading Indian companies, majorly offering IT services. The

company is also engaged in IT hardware (11% of sales) and consumer care and

lighting (10% of sales) businesses. Wipro's IT arm is India's fourth largest IT firm,

employing more than 1,45,000 professionals, offering a wide portfolio of services

such as ADM, consulting and package implementation, and servicing more than

950 clients.

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Profit & Loss account (Consolidated, IFRS)

Y/E March (` cr) FY2011 FY2012 FY2013E FY2014E* FY2015E*Net revenue 31,099 37,525 43,361 40,173 43,697Cost of revenues 21,285 26,317 29,772 28,278 30,688Gross profit 9,814 11,207 13,588 11,895 13,009% of net sales 31.6 29.9 31.3 29.6 29.8

Selling and mktg exp. 2,218 2,778 3,663 2,548 2,766

% of net sales 7.1 7.4 8.4 6.3 6.3

General and admin exp. 1,829 2,029 2,410 2,370 2,571

% of net sales 5.9 5.4 5.6 5.9 5.9

Depreciation and amortization 821 1,013 1,237 1,205 1,311

% of net sales 2.6 2.7 2.9 3.0 3.0

EBIT 5,767 6,401 7,514 6,976 7,672% of net sales 18.5 17.1 17.3 17.4 17.6

Other income, net 472 541 1,001 1,425 1,705

Share in profits of eq. acc. ass. 64.8 33.3 (10.5) 0 0

Profit before tax 6,303 6,975 8,505 8,402 9,377

Provision for tax 971 1,376 1,835 1,848 2,251

% of PBT 15.4 19.7 21.6 22.0 24.0

PAT 5,332 5,599 6,670 6,553 7,127Share in earnings of associate - - - - 1Minority interest 35 26 10 - -

Adj. PAT 5,297 5,573 6,660 6,553 7,127Diluted EPS (`) 21.7 22.7 27.0 26.2 28.5

Note: *exclude numbers of hived off consumer care and lighting segment

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April 19, 2013 12

Balance sheet (Consolidated, IFRS)

Y/E March (` cr) FY2011 FY2012 FY2013E FY2014E FY20115EAssetsGoodwill 5,482 6,794 5,476 5,476 5,476

Intangible assets 355 423 171 171 171

Property, plant & equipment 5,509 5,899 5,053 5,047 4,936

Investment in equ. acc. investees 299 323 - - -

Derivative assets 298 346 5 5 5

Non-current tax assets 924 1,029 1,031 1,031 1,131

Deferred tax assets 147 260 424 424 424

Other non-current assets 898 1,178 1,074 1,074 1,074

Total non-current assets 13,913 16,251 13,233 13,228 13,217Inventories 971 1,066 326 660 718

Trade receivables 6,163 8,033 7,664 7,264 7,901

Other current assets 1,974 2,574 3,107 3,107 3,107

Unbilled revenues 2,415 3,003 3,199 2,862 3,113Available for sale investments 4,928 4,196 6,917 11,544 13,991

Current tax assets 496 564 741 850 900

Derivative assets 171 147 303 350 400

Cash and cash equivalents 6,114 7,767 8,484 9,624 12,530

Total current assets 23,231 27,349 30,740 36,261 42,660Total assets 37,144 43,600 43,973 49,489 55,876EquityShare capital 491 492 493 493 493

Share premium 3,012 3,046 1,176 1,176 1,176

Retained earnings 20,325 24,191 25,918 30,716 36,087

Share based payment reserve 136 198 132 132 132

Other components of equity 58 659 717 717 717

Shares held by controlled trust (54) (54) (54) (54) (54)

Equity attrib. to shareholders of Co. 23,968 28,531 28,381 33,179 38,550

Minority interest 69 85 117 117 117

Total equity 24,037 28,616 28,498 33,296 38,667LiabilitiesLong term loans and borrowings 1,976 2,251 85 185 235

Deferred tax liability 30 35 85 85 85

Derivative liabilities 259 31 12 12 12

Non-current tax liability 502 540 479 529 579

Other non-current liabilities 271 352 339 450 450

Provisions 8 6 1 1 1Total non-current liabilities 3045 3215 1001 1262 1362Loans and bank overdraft 3,304 3,645 6,296 6,496 6,646

Trade payables 4,405 4,726 4,807 4,648 5,045

Unearned revenues 660 957 1,035 900 900

Current tax liabilities 734 723 1,023 1,223 1,373

Derivative liabilities 136 635 98 98 98

Other current liabilities 591 970 1,099 1,399 1,599

Provisions 232 112 117 167 187

Total current liabilities 10,062 11,769 14,474 14,931 15,847

Total liabilities 13,107 14,984 15,475 16,193 17,209

Total equity and liabilities 37,144 43,600 43,973 49,489 55,876

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Cash flow statement (Consolidated, IFRS)

Y/E March (` cr) FY2011 FY2012 FY2013E FY2014E FY2015EPre tax profit from operations 5,832 6,434 7,504 6,976 7,672

Depreciation 821 1,013 1,237 1,205 1,311Expenses (deferred)/written off (35) (26) (10) - -

Pre tax cash from operations 6,618 7,422 8,732 8,181 8,983

Other income/prior period ad 472 541 1,001 1,425 1,705

Net cash from operations 7,090 7,962 9,732 9,607 10,688

Tax (971) (1,376) (1,835) (1,848) (2,251)

Cash profits 6,119 6,586 7,897 7,758 8,438(Inc)/dec in current assets (1,601) (3,197) 47 246 (1,046)

Inc/(dec) in current liab. (499) 1,707 2,706 457 916

Net trade working capital (2,101) (1,490) 2,752 703 (130)

Cashflow from oper. actv. 4,018 5,096 10,650 8,462 8,308(Inc)/dec in fixed assets (985) (1,402) (391) (1,200) (1,200)

(Inc)/dec in intangibles (56) (1,380) 1,570 - -

(Inc)/dec in investments (1,951) 708 (2,398) (4,627) (2,447)

(Inc)/dec in net def. tax assets 22 (113) (164) - -

(Inc)/dec in derivative assets (178) (48) 341 - -

(Inc)/dec in non-current tax asset (578) (105) (2) - (100)

(Inc)/dec in minority interest 25 16 32 - -

Inc/(dec) in other non-current liab 103 (105) (49) 161 50

(Inc)/dec in other non-current ast. (20) (280) 104 - -

Cashflow from investing activities (3,616) (2,709) (957) (5,666) (3,697)Inc/(dec) in debt 165 275 (2,166) 100 50

Inc/(dec) in equity/premium 617 713 (5,055) (0) 0

Dividends (1,558) (1,723) (1,755) (1,755) (1,755)

Cashflow from financing activities (775) (735) (8,976) (1,655) (1,705)Cash generated/(utilized) (374) 1,653 717 1,141 2,905Cash at start of the year 6,488 6,114 7,767 8,484 9,624

Cash at end of the year 6,114 7,767 8,484 9,624 12,530

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April 19, 2013 14

Key Ratios

Y/E March FY2011 FY2012 FY2013E FY2014E FY2015EValuation ratio(x)P/E (on FDEPS) 17.0 16.2 13.7 14.1 12.9

P/CEPS 8.2 7.6 6.5 6.8 6.2

P/BVPS 3.8 3.2 3.2 2.8 2.4

Dividend yield (%) 1.6 1.6 1.6 1.6 1.6

EV/Sales 2.6 2.2 1.7 1.7 1.5

EV/EBITDA 12.4 10.9 8.6 8.5 7.1

EV/Total assets 2.2 1.9 1.7 1.4 1.1

Per share data (`)EPS (Fully diluted) 21.7 22.7 27.0 26.2 28.5

Cash EPS 45.1 48.8 56.7 54.1 59.2

Dividend 6.0 6.0 6.0 6.0 6.0

Book value 98 117 114 133 155

DuPont analysisTax retention ratio (PAT/PBT) 0.8 0.8 0.8 0.8 0.8

Cost of debt (PBT/EBIT) 7.7 6.9 6.9 7.0 7.2

EBIT margin (EBIT/Sales) 0.0 0.0 0.0 0.0 0.0

Asset turnover ratio (Sales/Assets) 0.8 0.9 1.0 0.8 0.8

Leverage ratio (Assets/Equity) 1.5 1.5 1.5 1.5 1.4

Operating ROE 22.2 19.6 23.5 19.8 18.5

Return ratios (%)RoCE (pre-tax) 15.5 14.7 17.1 14.1 13.7

Angel RoIC 28.0 25.8 32.5 30.5 32.1RoE 22.0 19.5 23.4 19.7 18.4

Turnover ratios (x)Asset turnover(fixed assets) 0.9 0.9 1.0 0.9 0.8

Receivables days 66 69 66 68 69

Payable days 71 63 58 58 58

Note: Closing price as on 18 April 2013

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