buy digital strength - hdfc securities - 2qfy18 - hdfc sec... · remains zensar’s key strength....

RESULTS REVIEW 2QFY18 07 NOV 2017

Zensar Technologies BUY

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters

Digital strength Zensar delivered a fine performance in 2Q. Revenue stood at USD 118.6mn (+3.8%, +3.3% CC), in-line with our estimate of USD 118.0mn. Growth was led by AMS (83% of rev, +5.8% QoQ), offset by weakness in IMS (-5.2% QoQ). IMS restructuring is taking longer-than-expected, and will be completed by FY18E. EBITDA margin expansion of 151bps at 11.8% (vs. estimate of 9.9%), despite a wage hike (-150 bps impact) and IMS weakness, was a positive surprise. Digital (36.8% of rev, +5.5% QoQ and 35.3% YoY) remains Zensar’s key strength. The deal size in Digital (BFSI and Retail) is increasing, and more than ~50% of new deal wins are in the Digital. Zensar’s growth will be below the industry average in FY18E owing to changes in clients’ preferences, issue with Oracle ATG (bottomed out in 2Q), and IMS restructuring (Product and MVS). Revenue growth will revive in FY19/20E, and EBITDA margin will recover gradually to 13.1/14.0% in FY18/19E. We maintain our positive view owing to Zenzar’s Digital/SMAC capabilities (well-penetrated within

the Top-20 clients), and a robust Digital deal pipeline. We build 7.5/14.5% revenue/EPS CAGR over FY17-20E. Maintain a BUY with a TP of Rs 930 based on 13x Sep-19 EPS.

Highlights of the quarter BFSI and Retail strong: BFSI (19.2%) and Retail

(28.9%) grew 6.0/6.0% QoQ respectively. Manufacturing (48.7%) bounced back strongly (+3.8% QoQ), led by traction in Top-5 clients (+5.0% QoQ). IMS revenue declined 5.2% QoQ, led by IMS services (-3.9%) and IMS maintenance (-7.8% QoQ).

Digital projects are initially onsite-heavy, and off-shoring, efficiencies and automation will lead to gradual margin expansion. The size of Digital deals is in the range of USD 0.5-5mn TCV.

Near-term outlook: Growth will be led by Digital ramp-up, Retail, BFSI and recovery in IMS. Margins will recover gradually in 2HFY18. The stock has underperformed in the last one year (-12%), and factored in most negatives.

Financial Summary (Consolidated) YE March (Rs bn) 2QFY18 2QFY17 YoY (%) 1QFY18 QoQ (%) FY16 FY17 FY18E FY19E FY20E Net Sales 7.64 7.79 (1.8) 7.38 3.6 29.78 30.73 31.09 33.98 37.03 EBITDA 0.90 1.11 (18.9) 0.76 18.9 4.40 3.85 3.78 4.47 5.17 APAT 0.63 0.69 (9.1) 0.47 32.8 3.06 2.31 2.46 2.92 3.46 Diluted EPS (Rs) 13.8 15.1 (9.1) 10.4 32.8 68.1 51.6 55.5 65.7 77.5 P/E (x) 11.8 15.5 14.4 12.2 10.3 EV / EBITDA (x) 7.6 8.4 8.2 6.5 5.2 RoE (%) 24.9 16.7 15.7 16.4 17.0 Source: Company, HDFC sec Inst Research

INDUSTRY IT

CMP (as on 07 Nov 2017) Rs 846

Target Price Rs 930 Nifty 10,350

Sensex 33,371

KEY STOCK DATA

Bloomberg ZENT IN

No. of Shares (mn) 45

MCap (Rs bn) / ($ mn) 38/584

6m avg traded value (Rs mn) 21

STOCK PERFORMANCE (%)

52 Week high / low Rs 1,030/732

3M 6M 12M

Absolute (%) 6.9 (4.7) (12.4)

Relative (%) 3.5 (16.4) (33.9)

SHAREHOLDING PATTERN (%)

Promoters 48.93

FIs & Local MFs 2.49

FPIs 14.97

Public & Others 33.61 Source : BSE Amit Chandra [email protected] +91-22-6171-7345

Apurva Prasad [email protected] +91-22-6171-7327

ZENSAR TECHNOLOGIES : RESULTS REVIEW 2QFY18

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Quarterly Consolidated Financials Snapshot Particulars (Rs bn) 2QFY18 2QFY17 YoY (%) 1QFY18 QoQ (%) Net Sales US$ mn 118.6 116.0 2.2 114.3 3.8 Net Sales 7.64 7.79 (1.8) 7.38 3.6 Cost of Revenue 5.43 5.46 (0.6) 5.33 1.8 SG&A 1.31 1.21 8.2 1.29 1.9 EBITDA 0.90 1.11 (18.9) 0.76 18.9 Depreciation 0.17 0.12 45.4 0.18 (5.5) EBIT 0.73 0.99 (26.5) 0.58 26.5 Interest 0.05 0.02 181.1 0.06 (11.3) Exchange Gain/(Loss) 0.15 -0.01 NM 0.12 NM Other income 0.04 0.03 59.0 0.07 (35.3) PBT 0.87 0.99 (12.4) 0.71 22.9 Tax 0.23 0.28 (18.2) 0.23 0.4 Minority Interest 0.02 0.02 (36.4) 0.01 73.6 RPAT 0.63 0.69 (9.1) 0.47 32.8 EO Items (Adj For Tax) 0.00 0.00 NM 0.00 NM APAT 0.63 0.69 (9.1) 0.47 32.8 Source: Company, HDFC sec Inst Research Margin Analysis MARGIN ANALYSIS % 2QFY18 2QFY17 YoY (%) 1QFY18 QoQ (%) Employee Expenses % Net Sales 71.1 70.2 89 72.3 (123) SG&A Expenses % Net Sales 17.1 15.6 158 17.4 (28) Gross Margin % 28.9 29.8 (89) 27.7 123 EBITDA Margin (%) 11.8 14.3 (247) 10.3 151 EBIT Margin (%) 9.6 12.8 (320) 7.8 173 Tax Rate (%) 26.2 28.1 (189) 32.1 (587) APAT Margin (%) 8.2 8.8 (66) 6.4 180 Source: Company, HDFC sec Inst Research

USD revenue growth was fuelled by Digital, and 50% of the incremental revenue came from this space Digital commerce has picked up after several quarters of weakness in Oracle ATG EBITDA% recovered strongly, despite a salary hike, IMS restructuring, led by higher utilisation (+270 bps), and operational efficiencies. Wage hike impact was USD 1.9-2 mn (-150 bps QoQ) PAT recovered to Rs 625mn, led by margin expansion and lower ETR ETR will be in the range of 28-29%for FY18-19E


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Service Line Revenue Break-up (Contribution %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Application Management Services (AMS) 76.5 77.2 76.7 76.2 81.4 81.5 83.1 IMS 23.5 22.8 23.3 23.8 18.6 18.5 16.9 Maintenance 7.7 8.1 6.9 6.7 7.2 6.3 5.6 Services 15.8 14.7 16.4 17.1 11.4 12.2 11.3 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Company, HDFC Sec Inst Research Service Line Revenue Growth (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Application Management Services (AMS) 0.1 3.1 2.1 0.6 0.8 3.2 5.8 IMS (14.7) (0.8) 5.1 3.4 (26.2) 2.5 (5.2) Maintenance (9.0) 7.8 (12.8) (1.1) 1.4 (9.8) (7.8) Services (17.2) (5.0) 15.0 5.4 (37.1) 10.3 (3.9) Total (3.8) 2.2 2.7 1.3 (5.6) 3.1 3.8 Source: Company, HDFC Sec Inst Research

Vertical Revenue Break-up (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Manufacturing 53.7 54.0 51.8 51.8 52.8 48.7 48.7 Retail and Consumer Services 23.8 24.0 25.7 25.2 26.4 28.3 28.9 Financial Services 18.0 18.0 18.1 19.4 17.4 18.8 19.2 Emerging 4.5 4.0 4.5 3.6 3.4 4.2 3.2 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Company, HDFC Sec Inst Research Vertical Revenue Growth (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Manufacturing (0.1) 2.8 (1.5) 1.3 (3.8) (4.9) 3.8 Retail and Consumer Services 7.5 2.9 9.9 (0.5) (1.1) 10.5 6.0 Financial Services (13.8) 2.1 3.1 8.8 (15.3) 11.4 6.0 Emerging (37.5) (8.9) 15.6 (18.5) (10.9) 27.3 (20.9) Total (3.8) 2.2 2.7 1.3 (5.6) 3.1 3.8 Source: Company, HDFC Sec Inst Research

IMS recovery will take another 1 to 2 quarters AMS was strong, led by Digital and traction in top accounts Retail and BFSI led growth, primarily owing to Digital engagements with clients Focus will be on the Top-50 higher margin strategic accounts; will achieve higher penetration in Digital within Top-50 accounts Core IMS grew 12.1% QoQ in 2Q on a small revenue base, and growth momentum is expected to continue


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Onsite: Offshore Revenue Break-up (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Onsite 63.7 68.8 66.2 66.5 65.5 62.5 62.5 Offshore 36.3 31.2 33.8 33.5 34.5 37.5 37.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Company, HDFC Sec Inst Research Onsite: Offshore Revenue Growth (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Onsite (7.1) 10.4 (1.1) 1.7 (7.0) (1.7) 3.8 Offshore 2.8 (12.2) 11.2 0.5 (2.8) 12.0 3.8 Total (3.8) 2.2 2.7 1.3 (5.6) 3.1 3.8 Source: Company, HDFC Sec Inst Research

Project Type Revenue Break-up (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Fixed Price 52.9 49.8 49.7 47.2 47.1 47.9 50.9 T&M 47.1 50.2 50.3 52.8 52.9 52.1 49.1 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Company, HDFC Sec Inst Research Project Type Revenue Growth (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Fixed Price (5.8) (3.7) 2.6 (3.9) (5.8) 4.8 10.3 T&M (1.4) 8.8 2.9 6.4 (5.4) 1.5 (2.2) Total (3.8) 2.2 2.7 1.3 (5.6) 3.1 3.8 Source: Company, HDFC Sec Inst Research

Onsite recovered owing to growth in manufacturing Digital deals are initially on-site heavy, off-shoring leads to margin expansion Over 50% of the revenue is expected to be from the Digital space in 3 years across Retail (Digital-heavy), Financial services and Hi-tech Fixed price contracts have increased, leading to higher margins in the quarter


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Geographical Revenue Break-up (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 North Americas 77.7 74.9 75.1 74.4 73.8 74.4 72.0 Europe 10.5 10.5 9.9 12.0 13.8 13.8 14.2 Africa 7.2 8.0 8.6 9.3 9.0 9.5 9.9 RoW 4.7 6.6 6.4 4.3 3.5 2.3 3.9 Total 100.0 100.0 100.0 100.0 100.1 100.0 100.0 Source: Company, HDFC Sec Inst Research Geographical Revenue Growth (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 North Americas (2.4) (1.4) 2.9 0.4 (6.4) 3.9 0.4 Europe 2.0 2.3 (3.1) 22.8 8.5 3.1 6.8 Africa (8.0) 13.9 10.8 9.4 (8.7) 8.8 8.1 RoW (25.2) 43.6 0.1 (32.1) (23.2) (32.3) 75.9 Total (3.8) 2.2 2.7 1.3 (5.5) 3.0 3.8 Source: Company, HDFC Sec Inst Research

Client-wise Revenue Break-up (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Top 5 clients 37.6 36.6 38.9 37.5 38.4 34.9 35.3 Top 10 clients 45.9 45.7 48.6 45.0 46.1 43.1 43.6 Source: Company, HDFC Sec Inst Research Client-wise Revenue Growth (QoQ, %) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Top 5 clients 3.3 (0.6) 9.4 (2.4) (3.4) (6.3) 5.0 Top 10 clients 2.8 1.7 9.3 (6.3) (3.3) (3.6) 5.0 Source: Company, HDFC Sec Inst Research

Geographically, Europe and Africa were strong because of Retail ad BFSI traction US will remain the key focus geography; heavy investments in SG&A are made in the US Top 5/10 accounts’ revenue was up 5.0/5.0% QoQ, after three quarters of decline


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Headcount, Utilisation Data (Nos.) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Total headcount 8,256 8,238 8,316 8,564 8,524 8,567 8,414 Software Professionals 7,540 7,487 7,550 7,713 7,716 7,848 7,727 Sales 113 92 82 103 102 91 78 Support 603 659 684 748 706 628 609 Net additions 64 (18) 78 248 (40) 43 (153)

Utilisation (%) 81.0 79.8 80.1 79.5 79.2 83.2 85.9 Source: Company, HDFC Sec Inst Research

Key Assumptions Particulars FY16 FY17 FY18E FY19E FY20E Total Volume growth (%) 10.7 3.6 11.1 4.2 7.2 Total Pricing change (%) (5.0) (2.6) (5.6) 4.3 1.7 Total USD revenue growth (%) 4.6 0.5 4.8 8.7 9.0 USD/INR rate 65.1 67.1 64.7 65.0 65.0 EBITDA margin (%) 14.8 12.5 12.2 13.1 14.0 Source: Company, HDFC Sec Inst Research

Change In Estimates Particulars Earlier estimates Revised estimates % change FY18E Revenue (US$ mn) 483 479 (0.7) Revenue (Rs mn) 31,309 31,093 (0.7) EBITDA (Rs mn) 3,740 3,782 1.1 EBITDA margin (%) 11.9% 12.2% 22 bps EPS (Rs) 56.2 55.5 (1.2) FY19E Revenue (US$ mn) 525 521 (0.8) Revenue (Rs mn) 34,251 33,979 (0.8) EBITDA (Rs mn) 4,453 4,467 0.3 EBITDA margin (%) 13.0% 13.1% 15 bps EPS (Rs) 71.5 65.7 (8.1) Source: Company, HDFC Sec Inst Research

Utilisation increased 270 bps to 85.9%; target utilisation band for the company is between 83-86%.


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Peer Valuations

Company Mcap CMP

Reco. TP EPS (Rs) P/E (x) RoE (%)

(Rs bn) (Rs) (Rs) FY17 FY18E FY19E FY20E FY17 FY18E FY19E FY20E FY17 FY18E FY19E FY20E L&T Infotech 139 815 BUY 890 56.9 59.7 65.5 71.4 14.3 13.7 12.4 11.4 36.9 29.6 27.8 26.3 Mphasis 134 693 BUY 750 38.8 41.3 47.1 53.3 17.9 16.8 14.7 13.0 13.4 13.8 16.1 16.8 Hexaware * 95 320 BUY 315 13.9 16.9 18.2 21.7 23.0 18.9 17.6 14.7 26.7 26.6 24.5 25.4 L&T Tech 87 860 NEU 805 41.8 40.7 49.2 56.9 20.6 21.1 17.5 15.1 33.3 25.1 25.3 24.6 Mindtree 82 487 NEU 465 24.9 24.2 32.1 40.8 19.6 20.1 15.2 11.9 16.8 18.1 20.7 23.8 Cyient 60 530 BUY 587 30.6 36.3 42.0 48.3 17.3 14.6 12.6 11.0 17.4 18.2 19.0 19.7 Tata Elxsi 54 865 NR 935 28.1 34.1 39.7 46.3 30.8 25.3 21.8 18.7 37.0 34.4 32.7 31.1 Persistent 52 649 BUY 715 38.8 41.0 46.1 55.5 16.7 15.8 14.1 11.7 17.0 16.3 16.3 17.5 eClerx 51 1,271 SELL 1,085 87.8 76.5 85.0 97.2 14.5 16.6 14.9 13.1 30.8 23.7 23.7 24.5 Zensar 38 846 BUY 930 51.6 55.5 65.7 77.5 15.5 14.4 12.2 10.8 16.7 15.7 16.4 17.0 KPIT Tech 31 157 NEU 140 11.1 11.9 13.2 15.1 14.1 13.1 11.9 10.4 14.8 14.3 14.2 14.7 Sonata 20 186 BUY 214 14.6 15.4 18.1 20.8 12.7 12.0 10.2 8.9 31.2 30.1 32.0 32.7

Source: HDFC sec Inst Research * YE Dec


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Income Statement (Consolidated) YE March (Rs bn) FY16 FY17 FY18E FY19E FY20E Net Revenues (US $mn) 455 457 479 521 568 Growth (%) 4.6 0.5 4.8 8.7 9.0 Net Revenues (Rs mn) 29.78 30.73 31.09 33.98 37.03 Growth (%) 12.1 3.2 1.2 9.3 9.0 Personnel expenses 20.37 21.74 21.94 23.65 25.58 SG&A 5.01 5.13 5.37 5.86 6.28 EBITDA 4.40 3.85 3.78 4.47 5.17 EBITDA Margin (%) 14.8 12.5 12.2 13.1 14.0 EBITDA Growth (%) 12.3 (12.5) (1.8) 18.1 15.8 Depreciation 0.46 0.46 0.69 0.72 0.78 EBIT 3.95 3.39 3.10 3.75 4.39 Other Income (Including EO Items) 0.45 0.14 0.72 0.75 0.84 Interest 0.11 0.09 0.22 0.21 0.19 PBT 4.29 3.44 3.60 4.29 5.05 Tax (Incl Deferred) 1.17 1.06 1.02 1.24 1.46 Minority Interest 0.03 0.04 0.06 0.06 0.06 RPAT 3.09 2.34 2.52 2.98 3.52 EO (Loss) / Profit (Net Of Tax) 0.00 0.00 0.00 0.00 0.00 APAT 3.06 2.31 2.46 2.92 3.46 APAT Growth (%) 15.8 (24.7) 6.8 18.5 18.4 Adjusted EPS (Rs) 68.1 51.6 55.5 65.7 77.5 EPS Growth (%) 16.9 (24.2) 7.6 18.3 18.0

Source: Company, HDFC sec Inst Research

Balance Sheet (Consolidated) YE March (Rs bn) FY16 FY17 FY18E FY19E FY20E SOURCES OF FUNDS Share Capital - Equity 0.45 0.45 0.45 0.45 0.45 Reserves 12.18 14.31 16.24 18.52 21.22 Total Shareholders’ Funds 12.63 14.76 16.69 18.97 21.67 Minority Interest 0.04 0.07 0.13 0.19 0.26 Total Debt 1.48 1.32 1.32 1.32 1.32 Net Deferred Taxes -0.22 -0.17 -0.17 -0.17 -0.17 Long Term Provisions & Others 0.49 0.74 0.79 0.86 0.93 TOTAL SOURCES OF FUNDS 14.42 16.72 18.75 21.17 24.01 APPLICATION OF FUNDS Net Block 3.84 4.51 4.45 4.40 4.37 CWIP 0.00 0.01 0.01 0.01 0.01 Investments 0.38 1.11 1.11 1.11 1.11 LT Loans & Advances 0.37 0.44 0.48 0.53 0.57 Total Non-current Assets 4.59 6.07 6.05 6.05 6.06 Inventories 1.26 1.13 1.24 1.36 1.48 Debtors 5.40 5.33 5.54 6.05 6.59 Other Current Assets 3.35 3.61 3.73 4.08 4.44 Cash & Equivalents 3.85 4.76 6.24 8.04 10.21 Total Current Assets 13.86 14.82 16.76 19.53 22.73 Creditors 1.66 1.75 1.72 1.86 2.01 Other Current Liabilities & Provns 2.37 2.41 2.33 2.55 2.78 Total Current Liabilities 4.03 4.16 4.05 4.41 4.78 Net Current Assets 9.83 10.66 12.70 15.12 17.95 TOTAL APPLICATION OF FUNDS 14.42 16.72 18.75 21.17 24.01 Source: Company, HDFC sec Inst Research


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Cash Flow Statement (Consolidated) YE March (Rs bn) FY16 FY17 FY18E FY19E FY20E Reported PBT 4.29 3.44 3.60 4.29 5.05 Non-operating & EO items 0.00 -0.12 -0.23 -0.27 -0.31 Interest expenses 0.11 0.09 0.22 0.21 0.19 Depreciation 0.45 0.46 0.69 0.72 0.78 Working Capital Change -1.22 0.27 -0.56 -0.59 -0.62 Tax Paid -1.05 -1.06 -1.02 -1.24 -1.46 OPERATING CASH FLOW ( a ) 2.59 3.08 2.69 3.12 3.61 Capex -0.42 -1.15 -0.62 -0.68 -0.74 Free cash flow (FCF) 2.16 1.94 2.07 2.44 2.87 Investments 0.01 -0.73 0.00 0.00 0.00 Non-operating Income 0.05 -0.27 0.23 0.27 0.31 INVESTING CASH FLOW ( b ) -0.37 -2.14 -0.39 -0.41 -0.43 Debt Issuance/(Repaid) -0.27 -0.16 0.00 0.00 0.00 Interest Expenses -0.11 -0.09 -0.22 -0.21 -0.19 FCFE 1.79 1.69 1.85 2.22 2.69 Share Capital Issuance 0.04 0.00 0.00 0.00 0.00 Dividend -0.97 -0.63 -0.59 -0.70 -0.82 FINANCING CASH FLOW ( c ) -1.30 -0.88 -0.81 -0.91 -1.01 NET CASH FLOW (a+b+c) 0.92 0.06 1.49 1.80 2.17 EO Items, Others 0.03 0.85 0.00 0.00 0.00 Closing Cash & Equivalents 3.85 4.76 6.24 8.04 10.21


Key Ratios (Consolidated) FY16 FY17 FY18E FY19E FY20E PROFITABILITY (%) GPM 31.6 29.2 29.4 30.4 30.9 EBITDA Margin 14.8 12.5 12.2 13.1 14.0 APAT Margin 10.3 7.5 7.9 8.6 9.3 RoE 24.9 16.7 15.7 16.4 17.0 RoIC (or Core RoCE) 22.4 18.1 16.0 18.4 20.5 RoCE 17.6 12.0 12.0 12.7 13.2 EFFICIENCY Tax Rate (%) 27.3 30.9 28.4 29.0 29.0 Fixed Asset Turnover (x) 4.2 3.8 3.5 3.6 3.6 Debtors (days) 66 63 65 65 65 Payables (days) 24 24 23 23 23 Cash Conversion Cycle (days) 43 40 42 42 42 Debt/EBITDA (x) 0.3 0.3 0.3 0.3 0.3 Net D/E (x) (0.2) (0.2) (0.3) (0.4) (0.4) Interest Coverage (x) 41 44 17 21 28 PER SHARE DATA (Rs) EPS 68.1 51.6 55.5 65.7 77.5 CEPS 78.1 61.8 70.6 81.5 94.6 Dividend 14 14 13 15 18 Book Value 278 325 367 418 477 VALUATION P/E(x) 11.8 15.5 14.4 12.2 10.3 P/BV(x) 2.9 2.5 2.2 1.9 1.7 EV/EBITDA(x) 7.6 8.4 8.2 6.5 5.2 EV/Revenues(x) 1.1 1.1 1.0 0.9 0.7 OCF/EV (%) 7.7 9.5 8.7 10.7 13.4 FCF/EV(%) 6.5 6.0 6.7 8.3 10.6 FCFE/MktCap (%) 5.0 4.7 5.1 6.2 7.5 Dividend Yield (%) 1.8 1.8 1.6 1.9 2.3



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Rating Definitions BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Date CMP Reco Target 9-Jan-17 936 BUY 1,185

27-Jan-17 916 BUY 1,210 11-Apr-17 925 BUY 1,209 27-Apr-17 839 BUY 1,023 22-Jul-17 828 BUY 950 4-Oct-17 750 BUY 990 7-Nov-17 846 BUY 930

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Zensar TP

RECOMMENDATION HISTORY


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Disclosure: We, Amit Chandra, MBA & Apurva Prasad, MBA, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. 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HSL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research Report. HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 2496 5066 Compliance Officer: Binkle R. Oza Email: [email protected] Phone: (022) 3045 3600 HDFC Securities Limited, SEBI Reg. No.: NSE-INB/F/E 231109431, BSE-INB/F 011109437, AMFI Reg. No. ARN: 13549, PFRDA Reg. No. POP: 04102015, IRDA Corporate Agent License No.: HDF 2806925/HDF C000222657, SEBI Research Analyst Reg. 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