msat_1qfy13 results review aug 03, 2012

7/31/2019 MSAT_1QFY13 Results Review Aug 03, 2012

1/5


2/5

Mahindra Satyam CMP

Rs. 89

Target

Rs. 95

Rating

ADDQuarterly Financial Results

Rs. mn\Period Jun-12 Jun-11 yoy Growth Mar-12 qoq Growth FY12 FY13E yoy Growth

Revenue (US$) 342 320 6.9% 332 2.9% 1,307 1,425 9.0%

Revenue (INR) 18,799 14,339 31.1% 16,658 12.9% 63,956 72,945 14.1%

Employee cost 11,078 9,301 19.1% 10,204 8.6% 39,436 44,481 12.8%

Operating and admin 3,646 2,938 24.1% 3,539 3.0% 14,280 14,929 4.5%

EBITDA 4,075 2,100 94.1% 2,915 39.8% 10,240 13,535 32.2%Depreciation 494 380 29.8% 415 18.9% 1,577 1,993 26.4%

EBIT 3,581 1,720 108.3% 2,500 43.3% 8,663 11,542 33.2%

Other Income 670 1,009 -33.6% 727 -7.8% 4,189 2,904 -30.7%

Interest and Financing 31 45 -31.1% 25 23.3% 118 125 5.8%

Exce tional Items 0 0 -1 094 -1 094 0

Consolidated financial results

2

PBT 4,889 2,683 82.2% 4,295 13.8% 13,828 15,599 12.8%Tax 1,326 426 211.7% -943 -240.7% 851 4,128 384.8%

PAT 3563 2257 57.8% 5238 -32.0% 12977 11471 -11.6%

Minority Interest 40 - (104) (84) 40 -147.7%

PAT after Minorty 3,523 2,257 56.1% 5,342 -34.1% 13,061 11,431 -12.5%

EPS - Diluted 2.6 1.9 2.2 20.1% 8.7 8.9 2.0%

EBITDA margin % 21.7% 14.6% 703bps 17.5% 418bps 16.0% 18.6% 254bps

EBIT margin 19.1% 12.0% 706bps 15.0% 404bps 13.5% 15.8% 228bps

Tax rate 27.1% 15.9% 1126bps -21.9% nm 6.2% 26.5% 2031bps

PAT margin % 19.0% 15.7% 321bps 31.4% -1249bps 20.3% 15.7% -456bps


3/5

Mahindra Satyam CMP

Rs. 89

Target

Rs. 95

Rating

ADD

Key estimate revision

FY13E FY14E

Old New Change Old New Change

Revenues -US$ mn

1,425 1,425 0% 1,576 1,573 0%

USD/INR rate49.0 51.2 4% 48.0 49.0 2%

Revenues - INRmn

69,814 72,945 4% 75,654 77,061 2%

EBITDA13,097 13,535 3% 14,336 13,640 -5%

Margin %18.8% 18.6% -20bps 18.9% 17.7% -125bps

EPS8.9 8.9 0% 10.2 9.7 -5%

US$ Revenue progression

Business Overview

250

275

300

325

350

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13

3

All figures in Rs. mn, except EPS, which is in Rs.

EBITDA margin progression

Source: Source: Company Data / Spark Capital

MSAT 12-m forward P/E

Source: Bloomberg / Spark Capital

4%

8%

12%

16%

20%

24%

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13

0%

10%

20%

30%

40%

50%

60%

70%

0

5

10

15

20

25

30

Jan-10

Mar-10

May-10

Jul-10

Sep-10

Nov-10

Jan-11

Mar-11

May-11

Jul-11

Sep-11

Nov-11

Jan-12

Mar-12

May-12

Jul-12

P/E

1yr fwd P/E Avg P/E Discount to Infy


4/5

Mahindra Satyam CMP

Rs. 89

Target

Rs. 95

Rating

ADDFinancial Summary

Abridged Financial Statements Key metricsRs. mn FY11 FY12 FY13E FY14E FY11 FY12 FY13E FY14E

Revenues 51,450 63,956 72,945 77,061 Cashflow

Employee Cost 35,943 39,436 44,481 47,741 Net cash from operations -611 -3,375 10,318 9,793

Operating and Administration Expen 10,956 14,280 14,929 15,680 Net cash f rom investing 2,401 939 754 1,557

EBITDA 4,551 10,240 13,535 13,640 Net cash from f inancing -204 0 -125 -125

Depreciation 1,847 1,577 1,993 2,033 Free cash flow -3,153 -6,625 8,168 7,593

EBIT 2,704 8,663 11,542 11,608 Cash at year-end 5,055 25,102 40,088 51,312

Other Income 2,942 4,189 2,904 3,757 Growth

Interest and Financing Charges 97 118 125 125 Revenues -6.1% 24.3% 14.1% 5.6%

Exceptional Items 6,411 -1,094 0 0 EBITDA -18.1% 125.0% 32.2% 0.8%

PBT -862 13,828 15,599 15,422 PAT nm 108.4% 2.0% 8.9%

Tax 578 851 4,128 3,856 EPS nm 68.9% 108.4% 2.0%

PAT -1,440 12,977 11,471 11,567 Margins

4

Minority Interest 33 -84 40 0 EBITDA 8.8% 16.0% 18.6% 17.7%

PAT after Minorty and exceptio 4,938 10,290 10,491 11,429 PAT nm 20.4% 15.7% 15.0%

EPS - Basic 4.2 8.7 8.9 9.7 Return

EPS - Diluted 4.2 8.7 8.9 9.7 ROE -3.2% 34.3% 32.1% 24.6%

Balance sheet ROCE 20.2% 30.3% 27.4% 22.9%

Share Capital 2,353 2,354 2,354 2,354

Loan Funds 315 3,201 3,201 3,201 Fully diluted shares (mn) 1,178 1,178 1,178 1,178

Deferred Tax Liability 68 15 15 15 Market cap (Rs. mn) 105,039 105,039 105,039 105,039

Amounts Pending Investigation Sus 12,304 12,304 12,304 12,304 EV (Rs.mn) 81,532 81,532 81,532 81,532

Total - Sources of funds 59,134 45,543 57,013 68,580 EV/Sales (x) 1.6 1.3 1.1 1.1

Fixed assets incl CWIP 9,499 10,095 10,252 10,419 EV/EBITDA (x) 17.9 8.0 6.0 6.0

Investments 4,348 2,168 2,168 2,168 P/E (x) 21.3 10.2 10.0 9.2

Sundry Debtors 11,588 14,018 15,988 16,890 EPS(E) / Current market price 4.7% 9.8% 10.0% 10.9%

Cash and Bank Balances 27,538 29,140 40,088 51,312 Revenue per employee (000's ) 1,758 2,043 2,244 2,337

Net current assets 16,242 31,584 42,855 54,227 EBITDA per employee (000's) 156 327 416 414

Total - Application of funds 59,134 45,543 56,970 68,510 PAT per employee (000's) 169 329 323 347

Valuation


5/5

msat_1qfy13 results review aug 03, 2012

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