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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
RECO : ACCUMULATE TP : Rs 1,275
Investment Rationale
§ Fastest growing Offshore IT services player amongst Tier I Universe
Ø Expected to end FY11 with 29% YoY Growth for US$ Revenue, second consecutive year to post the
highest growth in the industry.
Ø Demand for offshore services to continue growing and India’s market share being <5% globally, huge
opportunity persists.
Ø Posed at the right position, at the right time with the right scale! Has showed tremendous resilience in
slowdown.
Ø Growing at ~6% CQGR since last 7 Quarters.
§ Investments made in slowdown is paying well!!
Ø Margin expansion by ~400 bps in last seven quarters. Large scale to further help manage wage and
currency pressures.
Ø The only player hiring aggressively in slowdown. Better placed to capture the flush of demand.
§ Premium Valuations to continue
Ø Considering huge potential, and growth rate, premium valuations to sustain.
Valuations
§ At CMP of Rs 1,183, the stock is trading at a P/E of 23.1x/19.2x on FY12E/FY13E earnings of Rs 51/Rs 61.5
respectively
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
RECO : ACCUMULATE TP : Rs 1,275
Investment Rationale
§ Fastest growing Offshore IT services player amongst Tier I Universe
Ø Expected to end FY11 with 29% YoY Growth for US$ Revenue, second consecutive year to post the
highest growth in the industry.
Ø Demand for offshore services to continue growing and India’s market share being <5% globally, huge
opportunity persists.
Ø Posed at the right position, at the right time with the right scale! Has showed tremendous resilience in
slowdown.
Ø Growing at ~6% CQGR since last 7 Quarters.
§ Investments made in slowdown is paying well!!
Ø Margin expansion by ~400 bps in last seven quarters. Large scale to further help manage wage and
currency pressures.
Ø The only player hiring aggressively in slowdown. Better placed to capture the flush of demand.
§ Premium Valuations to continue
Ø Considering huge potential, and growth rate, premium valuations to sustain.
Valuations
§ At CMP of Rs 1,183, the stock is trading at a P/E of 23.1x/19.2x on FY12E/FY13E earnings of Rs 51/Rs 61.5
respectively
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