Improvement in demand environment key for further upside

IT Sector Update S t U d t

September 24, 2012 We have revisited ratings and earnings estimates of our coverage universe stocks to factor in recent interaction with managements, weaker Rupee assumptions and valuations. The management commentaries have been mixed. TCS and HCL Tech maintain optimism about growth and g p g demand environment, whereas Infosys and Wipro continue to guide a challenging demand environment. Rampups in recent deal wins have led to relatively optimistic commentary from TCS and HCL Tech. Companies continue to experience slower decision-making and elongated sales cycles. Clients from the financial services industry (mainly, from the investment banking segment) are under pressure and players with higher exposure here are likely to be hurt more in the near-term.

Improvement in demand environment key for further upside

TCS expects growth to be front-ended while Infosys, Wipro and MindTree are banking on back-ended growth in F13. In our view, ramp-ups in recent deal wins, deal pipeline and different business mixes explains partly the differences in growth patterns and expectations. Salary hikes and promotions would impact margins of IT companies under coverage this quarter - Wipro (2 months incremental impact), HCL Tech (w.e.f. Jul), Persistent Systems (offshore w.e.f. Jul), Hexaware (onsite w.e.f. Jul), w e f Jul) MindTree (18% employees w e f Sep 2 months incremental impact of 80% employees) and Infosys w.e.f. Sep, employees), (~20,000 promotions). Barring a few instances, the managements have guided a stable pricing environment and have suggested no undue pressure on pricing. However, further deterioration in macroeconomic environment could delay investment into technology and thus, put pressure on pricing. Since our last sector update report (dated June 12, 2012), CNXIT index has underperformed Nifty index by ~5%. We maintain our view that the sector will deliver in line/lower relative returns considering (a) no change in nearterm demand outlook, (b) major policy announcements by the Government, which can be construed as steps taken towards achieving economic reforms and liberalisation, thus strengthening the Rupee, (c) high possibility of reversal of tightening monetary policy stance to support a slowing domestic economy and (d) relative valuation gaps.

Analyst Email

| Dipesh Mehta | dipesh.mehta@sbicapsec.com

Preferred large cap stocks: Infosys, HCL Tech

Associate | Ankit Pande Email | ankit.pande@sbicapsec.com

Preferred mid cap stocks: MindTree, NIIT Technologies

Please refer to the last page for disclaimer

Improvement in demand environment key for further upside

Valuations and relative price performance

Com pany CMP Rating TP US$ revenue YoY (%) EPS (Rs) PE F 13e 15.5 18.7 14.1 12.7 9.4 10.9 9.9 10.5 7.7 F 14e 14.5 17.4 13.2 11.9 7.9 10.4 9.1 10.3 7.1 P/BV F 13e F 14e 3.7 3.1 6.2 5.1 2.8 2.5 3.2 2.8 1.7 1.4 3.2 2.9 2.3 1.9 1.8 1.6 1.6 1.4 EV/EBIDTA F 13e F 14e 9.8 8.8 13.3 12.2 9.5 8.6 7.9 7.5 3.8 3.2 7.2 6.7 5.0 4.6 5.6 5.0 4.3 3.6 RoE (%) F 13e 26.1 37.1 21.7 27.0 19.3 31.4 26.1 18.5 22.4 F 14e 23.4 32.5 20.3 25.1 19.4 29.2 22.8 16.5 20.7

F 13e F 14e F 13e F 14e Infosys 2,593 ADD 2,700 6.1 12.0 167.5 179.5 TCS 1,304 REDUCE 1,275 12.0 12.1 69.6 75.0 Wipro 378 ADD 390 5.2 11.9 26.9 28.7 HCL Tech* 570 ADD 610 12.4 13.0 44.8 48.0 Persistent 413 ADD 465 12.0 13.1 44.0 52.0 Hexaw are^ 125 REDUCE 125 20.1 16.0 11.4 12.0 MindTree 689 ADD 735 10.3 12.3 69.7 76.1 MphasiS** 389 REDUCE 360 (6.1) 1.6 37.1 37.8 NIIT Technologies 290 ADD 330 12.3 12.0 37.7 41.0 *Jun year end; ^Dec year end (F13e corresponds to C12e); **Oct year end (F12e, F13e) Source: Company, Bloomberg, SSLe

CMP Index / Stock CNX Nifty 5,691 CNX IT 6,380 Infosys 2,593 TCS 1,304 1 304 Wipro 378 HCL Tech 570 Persistent 413 Hexaw are 125 MindTree 689 MphasiS 389 NIIT Technologies 290 Source: Bloomberg, SSL

1M 5.0 4.8 7.7 0.4 04 6.3 2.2 6.4 3.1 6.0 0.4 9.7

3M 10.2 5.6 4.1 6.5 65 (5.9) 18.3 6.2 (0.7) 13.2 10.8 1.8

Return (%) 6M 6.1 (2.2) (9.2) 11.6 11 6 (11.6) 15.9 29.1 2.1 43.7 (7.8) 18.0

1Y 9.8 16.6 8.5 27.6 27 6 7.6 44.0 37.7 71.7 98.2 14.9 40.5

3Y 5.2 10.6 4.8 33.2 33 2 4.7 20.8 51.4 5.4 (13.6) 37.8

% Outperform ance / Underperform ance w rt Nifty 1M 3M 6M 1Y 3Y (0.1) 2.7 (4.6) (4 6) 1.3 (2.8) 1.4 (1.8) 1.0 (4.6) 4.8 (4.6) (6.1) (3.7) (3 7) (16.1) 8.1 (4.0) (10.9) 3.0 0.6 (8.3) (8.3) (15.2) 5.5 55 (17.7) 9.8 23.0 (3.9) 37.6 (13.9) 11.9 6.8 (1.3) 17.8 17 8 (2.3) 34.1 27.9 61.9 88.4 5.1 30.6 5.4 (0.4) 28.0 28 0 (0.5) 15.5 46.2 0.2 (18.9) 32.6

Improvement in demand environment key for further upside

Performance at a glance (LTM and LQ)

Com panies Infosys TCS Wipro HCL Tech* Aggregate (Top-4) *Year-end June Source: Company, SSL Revenues (LTM) US$ m n YoY (%) 7,075 11.3 10,488 19.1 6,028 11.1 4,152 17.1 27,743 15.0 Revenues (LQ) US$ m n QoQ (%) YoY (%) 1,752 (1.1) 4.8 2,728 3.0 13.1 1,515 (1.4) 7.6 1,080 3.0 12.1 7,075 1.0 9.6 Rs bn 26.9 40.9 17.4 11.5 96.8 EBIT (LQ) QoQ (%) 1.7 11.3 10.9 40.4 11.1 YoY (%) 38.0 44.7 24.0 72.6 41.2 EBIT Margin (LQ) (%) QoQ (bps) YoY (bps) 28.0 (190) 193 27.5 ( ) (21) 133 21.0 25 (98) 19.4 372 393 25.0 4 136

Sep 12 quarter
We expect revenue growth performance to be broadly similar to the June quarter with TCS and HCL Tech outgrowing Infosys and Wipro. However, we expect Infosys to narrow down its underperformance this quarter. IT companies operating margin performance would vary this quarter depending upon salary hike cycles. Cross-currency movements thus far this quarter have been stable to marginally negative.

Exchange rate volatility

USD vs. INR Sep '11 Jun '12 QTD Sep '12 44.1 50.7 53.4 49.6 57.2 56.2 45.8 54.2 55.4 0.5 0.7 0.7 EUR vs. USD Sep '11 Jun '12 QTD Sep '12 1.45 1.33 1.31 1.34 1.24 1.21 1.41 1.28 1.25 0.8 0.5 0.6 GBP vs. USD Sep '11 Jun '12 QTD Sep '12 1.65 1.63 1.63 1.54 1.53 1.55 1.61 1.58 1.58 0.5 0.4 0.4 AUD vs. USD Sep '11 Jun '12 QTD Sep '12 1.11 1.05 1.06 0.97 0.97 1.01 1.05 1.01 1.04 1.0 0.6 0.6

Max Min Average Volatility (%) Source: Bloomberg, SSL

Exchange rates volatility continued this quarter as well, though the extent of the volatility dampened slightly. well slightly By and large, the Rupee has been more volatile and has depreciated to a greater extent than the Euro, the British Pound and the Australian Dollar, with the US Dollar as the benchmark.

Improvement in demand environment key for further upside

Companies under coverage

Improvement in demand environment key for further upside

Infosys: Chances of further disappointment lower; valuations give comfort I f

The stock has outperformed broader markets by 2.7/-6.1% in last 1M/3M, and currently trades at 15.5/14.5x F13e/F14e earnings estimates. Considering recent stock outperformance, we expect some pause and further upside would hinge on improvement in performance We remain positive on the stock considering expected performance. improvement in growth performance and reasonable valuations. The company has lowered revenue growth guidance to at least 5% at the of 1QF13 which implies a CQGR of 3.1% through 2Q-4QF13. Considering recent acquisitions of Lodestone and the captive BPO unit of US-based Marsh & McLennan, company is expected to revise F13 guidance upwards. The company continues to see healthy client additions, robust pipeline and a stable pricing environment. We expect company to catch up with the growth momentum of peers and narrow down its relative underperformance beginning 2Q/3Q. Weaker rupee would partly mitigate margins downside on account of integration of lower margins acquisitions, onsite hiring and lower utilization.
(Rs)
4,000

ADD

TP 2,700

Forward P/E Chart

3,000 3 000

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1,000

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TCS: Rich valuations led to downgrade

The stock has underperformed broader markets by 4.6/3.7% in last 1M/3M, and currently trades at 18.7/17.4x F13e/F14e earnings estimates. We remain positive on growth prospects, though not comfortable with the current valuations, and thus, downgrade the stock to REDUCE. The management remains fairly confident about growth going forward, on the back of deal pipeline and ramp-ups of deal wins in the past. TCS continues to maintain that it will grow ahead of NASSCOMs industry guidance of 11-14% for F13 in constant currency. Retail, Insurance, Manufacturing and Hi-tech verticals are growing well. The management has lowered growth expectations for the Telecom vertical. The management expects margins to remain under some pressure despite weaker Rupee d R due t a) i to ) investments i new geographies and new areas, b) i t t in hi d investment i t t in recent deal wins such as Friends Life and other ramp-ups, implying that there may be a slight movement onsite and c) change in revenue mix with higher contribution from India, APAC and emerging geographies that do not come at the same level of margins.
(Rs)
2,000 1,600 1,200 800 400 0

REDUCE

TP 1,275 ,

Forward P/E Chart

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Improvement in demand environment key for further upside

Wipro: No valuation trigger in sight with languishing near-term outlook Wi

The stock has outperformed broader markets by 1.3/-16.1% in last 1M/3M, and currently trades at 14.1/13.2x F13e/F14e earnings estimates. The company has guided a tepid 2Q (0.3-2.3% QoQ) on the back of a weak 1Q (Dollar revenues de-grew 1.4% QoQ) mainly due to weakness in India business. NASSCOM de grew growth rates seem to be out of reach as the company will have to grow at a CQGR of ~7.4% over 3Q-4Q to achieve double-digit growth rate in F13. The management guides healthy deal pipeline and expect investment in S&M and front-end with focus on momentum verticals would pay off in coming quarter. Discretionary spending in BFSI, particularly investment banking, remains under pressure and it is seeing pressure on pricing in certain areas such as investment banking and commoditised services. Margins are expected to remain under pressure due to salary hike and investment into S&M .
1,000 800 600

ADD

TP 390

Forward P/E Chart

(Rs)

400 200 0

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HCL Tech: Strong growth with sustaining margins to drive stock

The stock has outperformed broader markets by -2.8/8.1% in last 1M/3M, and currently trades at 12.7/11.9x F13e/F14e earnings estimates. Consistent volume outperformance with preservation of profitability will narrow down valuation discount to its peers (~35% discount to TCS and ~20% discount to Infosys). Recent deal wins and strength in first time outsourcers and rebid market give us confidence that HCL Tech will outgrow peers in coming quarters. The company has utilised the uncertainty in the macro environment and pressure on RTB/CTB spends as an opportunity to break into the Fortune500/Global2000 firms. It has successfully expanded and deepened relationship with its clients. The management suggested that company is expected to be aggressive again in chasing deals from the OND quarter after consolidating large wins and cross-selling/up-selling for last few quarters. The management expects to maintain F12 profitability in F13 at existing currency levels, despite ~200bps impact spread over the next two quarters on account of wage hikes. It suggests a stable pricing outlook, except in some pockets of financial services and in certain commoditised services.
1,000

ADD

TP 610

Forward P/E Chart

750

(Rs)

500

250

0
Nov-05 5 Jan-08 8 Jun-01 May-11 Feb-09 9 Aug-02 2 Sep-03 3 Dec-06 6 2 Jun-12
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Improvement in demand environment key for further upside

Persistent Systems: Consistent performance is the key P i t tS t

The stock has outperformed broader markets by 1.4/-4.0% in last 1M/3M, and currently trades at 9.4/7.9x F13e/F14e earnings estimates. We expect Persistent to clock strong growth (mid single-digit) QoQ in 2QF13 with higher contribution from IP business largely driven by the recent additions of IBMs business, IBM s Tivoli Network Performance Manager (incremental ~US$0.8mn QoQ). Margins are unlikely to gain from Rupee depreciation this quarter due to salary hikes (offshore w.e.f. Jul) and continuing investments into IBM TNPM deal. However, margins are likely to improve from 3Q onwards due to normalisation impact of wage hikes in Sep quarter, little incremental investments QoQ into IBM TNPM deal and momentum in top-line led by seasonally strong IP revenues top line revenues.
(Rs)
800

ADD

TP 465

Forward P/E Chart

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Hexaware: Strong growth momentum, rather expensive valuations

The stock has underperformed broader markets by 1.8/10.9% in last 1M/3M, and currently trades at 10.9/10.4x C12e/C13e earnings estimates. We see very little meaningful upside/downside deviation from the managements guidance of 20% growth in C12. Overall, it is seeing a stable demand environment with some instances of delays in decision making and volatility with specific projects. It hopes to maintain profitability levels of 1Q in C12 (i.e. EBIT margins of 20.8%), barring currency fluctuations. Hexaware announced a large deal win of TCV US$100mn over 4 years in 2Q (w.e.f. early C13). The management has stated that it is pursuing 4 large deals, one of which is in final stages. We remain positive on the companys growth prospects and margin sustainability, though not comfortable with the current valuations which leave little absolute upside.
250 200 150

REDUCE

TP 125

Forward P/E Chart

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Improvement in demand environment key for further upside

MindTree: G h drivers intact, reasonable valuations Growth d i i bl l i

The stock has outperformed broader markets by 1.0/3.0% in last 1M/3M, and currently trades at 9.9/9.1x F13e/F14e earnings estimates. The management now hopes to grow in line with NASSCOMs industry estimates of 11-14% in F13 It now guides stable to marginal growth only in the PES segment with F13. segment, some recovery starting next quarter when PES is expected to record some sequential growth. MindTrees margins may not show improvement in 2Q despite Rupees depreciation due to salary hikes (18% employees w.e.f. Sep, 2 months incremental impact of 80% employees). However, we expect a significant improvement YoY in margins in F13 due to a) a successful restructuring of the PES division b) continuing traction in ITS division, division, c) improving pyramid and d) other operating efficiencies.
1,000 800 600
(Rs)

ADD

TP 735

Forward P/E Chart

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MphasiS: HPES remains a cause for concern

The stock has outperformed broader markets by -4.6/0.6% in last 1M/3M, and currently trades at 10.5/10.3x F12e/F13e earnings estimates. MphasiS is expected to lag behind peers due to heavy dependence on HP, which is facing several problems and appears challenged for growth. HPES revenues continued their declined with another shrinkage by ~7% QoQ in constant currency due to HP losing market share and MphasiS losing out to HP India. The management expects weakness to continue for a few more quarters, thus negating some of the growth from direct channel, acquisitions and non-HPES.
1,200

REDUCE

TP 360

Forward P/E Chart

900

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Better execution and cost rationalisation have resulted into improvement in profitability and cash generation, despite significant pressure on business. In the near-term, the managements handling of its pricing situation in the new MSA with HP ( f S (w.e.f. Nov 1) is f ) a key event to watch.

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Improvement in demand environment key for further upside

NIIT Technologies: St Strong growth visibility at a reasonable price th i ibilit t bl i

The stock has outperformed broader markets by 4.8/-8.3% in last 1M/3M, and currently trades at 7.7/7.1x F13e/F14e earnings estimates. The stock is likely to get re-rated given the improved revenue visibility, expected improvement in margins and better cash g generation (OCF/revenues 12.3% in F14e vs. 4.5% in F11). ( ) The companys order book of US$240mn executable over the next twelve months provides definite visibility of an incremental ~US$30mn in F13. The management expects good traction in projects such as CCTNS and a seasonally stronger quarter from the GIS business in 2Q, along with continuing momentum from its large Travel clients. A weaker Rupee SG&A rationalisation normalisation of wage hikes and some Rupee, rationalisation, headroom in utilisation will provide an upside to margins in the near-term.
(Rs)
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TP 330

Forward P/E Chart

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Improvement in demand environment key for further upside

Financials

10

Improvement in demand environment key for further upside

Infosys Financials
Income statement
Y/E Mar (Rs m n) Revenue YoY (%) EBITDA YoY (%) Depreciation & amortisation p EBIT YoY (%) Other income PBT Provision for taxation Effective tax rate (%) Profit after tax YoY (%) Exceptional items Net incom e F 11 275,010 20.9 89,640 14.2 8,620 81,020 17.3 12,110 93,130 24,900 26.7 68,230 9.7 68,230 F 12 337,340 22.7 107,160 19.5 9,370 97,790 20.7 19,040 116,830 33,670 28.8 83,160 21.9 83,160 F 13e 405,126 20.1 126,783 18.3 10,478 116,306 18.9 17,799 134,105 37,898 28.3 96,207 15.7 96,207 F 14e 432,360 6.7 132,773 4.7 11,771 121,002 4.0 23,181 144,183 41,092 28.5 103,091 7.2 103,091

Balance sheet
Y/E Mar (Rs m n) Net fixed assets Goodw ill and intangible assets Investments Cash & bank balance Debtors and unbilled revenues Other current assets Other non-current assets Total assets Equity Borrow ings Unearned and deferred revenues Other current liabilities Non-current liabilities Total liabilities F 11 48,440 8,730 1,670 166,660 58,960 15,530 12,640 312,630 273,030 5,180 31,050 3,370 312,630 F 12 54,090 11,660 3,890 205,910 77,550 15,230 15,150 383,480 334,610 5,450 42,210 1,210 383,480 F 13e 56,321 17,652 4,000 249,070 91,558 15,000 20,150 453,751 403,939 7,292 38,400 4,120 453,751 F 14e 57,216 17,706 4,000 315,302 97,713 15,000 20,150 527,087 476,785 7,782 38,400 4,120 527,087

Financial ratios
Y/E Mar Profitability & return ratio(%) EBITDAM EBITM NPM RoE Per share data (Rs) EPS CEPS BV DPS Valuation ratios PE (x) P/BV (x) ( ) P/S (x) EV/EBITDA (x) EV/Sales (x) Turnover ratio DSO (days) Source: Company, SSLe F 11 32.6 29.5 24.8 26.6 119.4 134.5 477.9 60.0 21.7 5.4 5.4 14.7 4.8 78 F 12 31.8 29.0 24.7 27.4 144.8 161.1 582.7 47.0 17.9 4.5 4.4 11.9 3.8 84 F 13e 31.3 28.7 23.7 26.1 167.5 185.8 703.3 40.0 15.5 3.7 3.7 9.8 3.1 82 F 14e 30.7 28.0 23.8 23.4 179.5 199.9 829.9 45.0 14.5 3.1 3.4 8.8 2.7 82

Cash flow statement

Y/E Mar (Rs m n) Net profit Depreciation & amortisation Others Operating CF Purchase of fixed assets Purchase of investments Other investing activities Investing CF Issue of equity shares Proceeds from borrow ings Dividend (incl. dividend tax) Others Financing CF Inc/(dec) in cash & bank bal. Closing cash & bank bal. F 11 68,230 8,620 (17,780) 59,070 (13,000) 35,640 (330) 22,310 240 (36,650) (36,410) 44,970 166,660 F 12 83,160 9,370 (10,410) 82,120 (14,420) (3,060) (3,130) (20,610) 60 (23,270) (23,210) 38,300 205,910 F 13e F 14e 96,207 103,091 10,478 11,771 (15,746) (5,665) 90,938 109,197 (12,708) (2,200) (5,992) (20,900) (26,878) (26,878) 43,160 249,070 (12,666) (54) (12,720) (30,245) (30,245) 66,232 315,302
11

Improvement in demand environment key for further upside

TCS Financials
Income statement
Y/E Mar (Rs m n) Revenue YoY (%) EBITDA YoY (%) Depreciation & amortisation p EBIT YoY (%) Other income PBT Provision for taxation Effective tax rate (%) Profit after tax YoY (%) Non-controlling interest Reported net profit F 11 373,245 24.3 111,961 28.9 7,185 104,776 31.6 5,355 110,131 21,661 19.7 88,470 27.1 1,189 87,281 F 12 488,938 31.0 144,205 28.8 9,036 135,169 29.0 4,041 139,210 31,688 22.8 107,522 21.5 1,111 106,411 F 13e 620,979 27.0 182,749 26.7 9,988 172,762 27.8 7,154 179,915 42,400 23.6 137,515 27.9 1,348 136,167 F 14e 664,560 7.0 192,876 5.5 10,633 182,243 5.5 12,800 195,043 46,810 24.0 148,233 7.8 1,400 146,833

Balance sheet
Y/E Mar (Rs m n) Net fixed assets Goodw ill and intangible assets Investments Cash & bank balance Debtors and unbilled revenues Other current assets Other non-current assets Total assets Equity Borrow ings Unearned and deferred revenues Other current liabilities Non-current liabilities Total liabilities F 11 51,996 34,064 77,218 15,538 95,396 21,009 31,086 326,307 257,302 748 7,720 49,942 10,596 326,307 F 12 64,548 34,973 80,740 19,936 137,501 26,976 47,374 412,049 330,722 1,266 8,230 60,726 11,105 412,049 F 13e 80,000 34,973 102,830 29,115 173,874 27,420 54,083 502,295 410,151 1,266 9,315 70,064 11,500 502,295 F 14e 95,000 34,973 154,430 42,804 186,077 28,291 59,583 601,157 503,427 1,266 9,968 74,596 11,900 601,157

Financial ratios
Y/E Mar Profitability and return ratios (%) EBITDAM EBITM NPM RoE Per share data (Rs) EPS CEPS BV DPS Valuation ratios PE (x) P/BV (x) ( ) P/S (x) EV/EBITDA (x) EV/Sales (x) Turnover ratios DSO (days) Source: Company, SSLe F 11 30.0 28.1 23.4 37.6 44.6 48.3 131.5 14.0 29.2 9.9 6.8 22.0 6.6 93 F 12 29.5 27.6 21.8 36.6 54.4 59.0 169.0 25.0 24.0 7.7 5.2 17.0 5.0 103 F 13e 29.4 27.8 21.9 37.1 69.6 74.7 209.6 21.0 18.7 6.2 4.1 13.3 3.9 102 F 14e 29.0 27.4 22.1 32.5 75.0 80.5 257.2 24.0 17.4 5.1 3.8 12.2 3.5 102

Cash flow statement

Y/E Mar (Rs m n) Net income Depreciation & Amortisation Others Operating CF Purchase of fixed assets Purchase of investments Other investing activities Investing CF Issue of equity shares Proceeds from borrow ings Dividends (incl. dividend tax) Others Financing CF Inc/(dec) in cash & bank bal. Closing cash & bank bal. F 11 F 12 F 13e F 14e 87,281 106,411 136,167 146,833 7,185 9,036 9,988 10,633 (25,428) (39,906) (41,360) (11,588) 69,038 75,540 104,795 145,878 (16,796) (927) (131) (17,854) (295) (45,646) ( (246) ) (46,187) 4,997 15,538 (19,786) (9,592) (120) (29,498) (367) (38,670) ( , (2,491) ) (41,528) 4,515 19,936 (25,439) (22,089) (47,529) (48,087) (48,087) 9,179 29,115 (25,633) (51,600) (77,233) (54,956) (54,956) 13,688 42,804
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Improvement in demand environment key for further upside

Wipro Financials
Income statement
Y/E Mar (Rs m n) Revenue YoY (%) EBITDA YoY (%) Depre. & amorti. p EBIT YoY (%) Other income PBT Provision for taxation Effective tax rate (%) Profit for the period YoY (%) Non-controlling interest Net Profit F 11 310,542 14.2 65,880 11.0 8,211 57,669 12.0 5,366 63,035 9,714 15.4 53,321 15.6 345 52,977 F 12 371,971 19.8 74,141 12.5 10,130 64,011 11.0 5,737 69,748 13,762 19.7 55,986 5.0 256 55,730 F 13e 439,354 18.1 88,316 19.1 11,067 77,249 20.7 6,863 84,112 17,521 20.8 66,591 18.9 337 66,254 F 14e 475,775 8.3 93,738 6.1 11,894 81,843 5.9 9,320 91,163 20,056 22.0 71,107 6.8 320 70,787

Balance sheet
Y/E Mar (Rs m n) Net fixed assets Goodw ill & intangible assets Investments Cash & bank balance Debtors and unbilled revenues Other current assets Other non-current assets Total assets Equity Borrow ings Unearned and deferred revenues Other current liabilities Non-current liabilities Total liabilities F 11 55,094 58,369 49,282 61,141 85,776 36,115 25,666 371,443 240,371 52,802 6,595 60,980 10,695 371,443 F 12 58,988 72,166 41,961 77,666 110,353 43,508 31,359 436,001 286,163 58,958 9,569 71,668 9,643 436,001 F 13e 64,509 71,646 60,000 89,271 127,413 44,543 32,506 489,888 328,606 58,958 10,545 81,419 10,360 489,888 F 14e 71,313 71,146 70,000 112,621 137,975 45,343 33,546 541,944 372,736 58,958 11,419 87,772 11,060 541,944

Financial ratios
Y/E Mar Profitability and return ratio (%) EBITDAM EBITM NPM RoE Per share data (Rs) EPS CEPS BV DPS Valuation ratios PE (x) P/BV (x) ( ) P/S (x) EV/EBITDA (x) EV/Sales (x) Turnover ratios (days) DSO + unbilled revenues Source: Company, SSLe F 11 21.2 18.6 17.2 24.4 21.6 25.1 97.7 6.0 17.5 3.9 3.0 13.2 2.8 101 F 12 19.9 17.2 15.1 21.3 22.7 26.9 116.1 6.0 16.7 3.3 2.5 11.7 2.3 108 F 13e 20.1 17.6 15.2 21.7 26.9 31.5 133.1 8.0 14.1 2.8 2.1 9.5 1.9 106 F 14e 19.7 17.2 14.9 20.3 28.7 33.6 150.7 9.0 13.2 2.5 2.0 8.6 1.7 106

Cash flow statement

Y/E Mar (Rs m n) Net profit Depre. & amorti. Others Operating CF Purchase of fixed assets Purchase of investments Other investing activities Investing CF Issue of equity shares Proceeds from borrow ings Dividends (incl. dividend tax) Others Financing CF Inc/(dec) in cash & bank bal. Closing cash & bank bal. F 11 53,321 8,211 (21,095) 40,437 (11,690) (11,772) 6,223 (17,239) 25 (10,122) (15,585) ( (696) ) (26,378) (3,180) 61,141 F 12 55,986 10,129 (26,039) 40,076 (12,203) 4,057 90 (8,056) 22 712 (17,229) ( (902) ) (17,397) 14,623 77,666 F 13e 66,591 11,067 (19,142) 58,516 (16,068) (18,039) 10,250 (23,857) (23,054) (23,054) 11,605 89,271 F 14e 71,107 11,894 (17,275) 65,726 (18,199) (10,000) 11,800 (16,399) (25,978) (25,978) 23,350 112,621
13

Improvement in demand environment key for further upside

HCL Tech Financials

Income statement
Y/E Jun (Rs m n) Revenue YoY (%) EBITDA YoY (%) Dep. & amortisation p EBIT YoY (%) Other income PBT Provision for taxation Effective tax rate (%) PAT YoY (%) Minority interest Net incom e F 11 F 12p F 13e F 14e 160,342 210,312 251,280 274,309 27.4 31.2 19.5 9.2 27,488 40,251 48,352 49,706 6.6 46.4 20.1 2.8 4,974 5,641 6,400 6,796 22,514 34,610 41,953 42,910 8.4 53.7 21.2 2.3 (561) (1,170) (772) 1,456 21,953 33,440 41,181 44,366 4,840 8,180 9,883 10,648 22.0 24.5 24.0 24.0 17,113 25,260 31,297 33,718 31.2 47.6 23.9 7.7 1 17,113 25,261 31,297 33,718

Balance sheet
Y/E Jun (Rs m n) Net fixed assets Goodw ill and intangible assets Investments Cash & bank balance Debtors and unbilled revenues Other current assets Other non-current assets Total assets Equity Borrow ings Unearned and deferred revenues Other current liabilities Other liabilities Total liabilities F 11 22,180 41,905 19,773 5,201 34,087 12,554 10,630 146,329 84,399 21,254 8,066 28,635 3,975 146,329 F 12p 24,776 49,408 21,327 6,671 53,442 15,212 18,450 189,287 107,318 19,224 10,546 42,467 9,731 189,287 F 13e 29,357 47,807 25,147 7,441 58,046 17,822 20,696 206,316 124,941 15,074 10,517 48,542 7,241 206,316 F 14e 34,596 46,176 28,969 9,845 63,365 19,290 21,243 223,484 144,139 10,920 11,075 49,317 8,034 223,484

Financial ratios
Y/E Jun Profitability and return ratio (%) EBITDAM EBITM NPM RoE Per share data (Rs) EPS CEPS BV DPS Valuation ratios PE (x) P/BV (x) ( ) P/S (x) EV/EBITDA (x) EV/Sales (x) Turnover ratios DSO incl. unbilled (days) Source: Company, SSLe F 11 17.1 14.0 10.7 22.1 24.8 32.1 122.5 7.5 22.9 4.7 2.4 14.2 2.4 77 F 12p 19.1 16.5 12.0 26.4 36.4 44.6 154.8 12.0 15.6 3.7 1.9 9.6 1.8 92 F 13e 19.2 16.7 12.5 27.0 44.8 54.0 178.9 12.5 12.7 3.2 1.6 7.9 1.5 84 F 14e 18.1 15.6 12.3 25.1 48.0 57.6 205.0 12.5 11.9 2.8 1.5 7.5 1.4 84

Cash flow statement

Y/E Jun (Rs m n) Net income Depreciation & amortisation Others Operating CF Purchase of fixed assets Purchase of investments Other investing activities Investing CF Proceeds from equity issuance Proceeds from borrow ings Dividend incl. dividend tax Others Financing CF Inc/(dec) in cash & bank bal. Closing cash & bank bal. F 11 17,113 4,974 (4,902) 17,185 (7,785) 501 (559) (7,843) 901 (4,866) (5,187) ( ) (57) (9,210) 133 5,201 F 12p 25,261 5,653 (4,959) 25,955 (9,058) (1,570) (1,003) (11,631) 390 (4,544) (7,979) 968 (11,165) 3,159 6,671 F 13e 31,297 6,399 (6,694) 31,003 (11,783) (4,512) (16,295) (3,526) (10,188) (13,714) 994 7,441 F 14e 33,718 6,796 (6,241) 34,273 (13,036) (4,680) (17,716) (3,640) (10,258) (13,898) 2,658 9,845
14

Improvement in demand environment key for further upside

Persistent Systems Financials

Income statement
Y/E Mar (Rs m n) Revenue YoY (%) EBITDA YoY (%) Depri. & Amorti. p EBIT YoY (%) Other income PBT Provision for Taxation Effective tax rate (%) Recurring Net Profit YoY (%) Exceptional items Net Profit F 11 7,758 29.1 1,583 8.2 424 1,159 2.7 344 1,504 106 7.1 1,397 21.5 1,397 F 12 10,003 28.9 2,294 44.9 611 1,683 45.2 286 1,969 551 28.0 1,418 1.5 1,418 F 13e 12,672 26.7 3,242 41.3 763 2,479 47.3 (35) 2,444 683 27.9 1,761 24.2 1,761 F 14e 13,660 7.8 3,308 2.0 804 2,504 1.0 386 2,890 809 28.0 2,081 18.2 2,081

Balance sheet
Y/E Mar (Rs m n) Net fixed assets Goodw ill and intangible assets Investments Cash & bank balance Debtors and unbilled revenues Other current assets Other non-current assets Total assets Equity Borrow ings Unearned and deferred revenues Other current liabilities Non-current liabilities Total liabilities F 11 2,213 602 2,500 1,000 1,687 893 209 9,103 7,471 96 1,249 287 9,103 F 12 2,986 739 2,038 1,375 2,173 576 256 10,143 8,405 7 89 1,571 71 10,143 F 13e 3,271 551 2,123 2,070 2,745 575 256 11,591 9,862 7 90 1,557 75 11,591 F 14e 3,336 382 2,323 3,578 2,959 575 256 13,408 11,615 7 95 1,611 80 13,408

Financial ratios
Y/E Mar Profitability & return ratio (%) EBITDAM EBITM NPM RoE Per share data (Rs) EPS CEPS BV DPS Valuation ratios PE (x) P/BV (x) ( ) P/S (x) EV/EBITDA (x) EV/Sales (x) Turnover ratios DSO (days) Source: Company, SSLe F 11 20.4 14.9 18.0 20.2 34.9 45.5 186.8 5.5 11.8 2.2 2.1 8.2 1.7 74 F 12 22.9 16.8 14.2 17.9 35.4 50.7 210.1 6.0 11.6 2.0 1.6 5.7 1.3 74 F 13e 25.6 19.6 13.9 19.3 44.0 63.1 246.6 6.5 9.4 1.7 1.3 3.8 1.0 74 F 14e 24.2 18.3 15.2 19.4 52.0 72.1 290.4 7.0 7.9 1.4 1.2 3.2 0.8 74

Cash flow statement

Y/E Mar (Rs m n) Net profit Depreciation & amortisation Others Operating CF Purchase of fixed assets Purchase of investments Other investing activities Investing CF Issue of equity shares Proceeds from borrow ings Dividend (incl. dividend tax) Others Financing CF Inc/(dec) in cash & bank bal. Closing cash & bank bal. F 11 1,397 424 (246) 1,575 (970) (1,684) 125 (2,529) (280) ( (432) ) (712) (1,666) 1,000 F 12 1,418 611 (592) 1,436 (1,504) 294 219 (992) 7 (233) ( ) (15) (241) 203 1,375 F 13e 1,761 763 (861) 1,663 (860) (85) 281 (663) (304) (304) 696 2,070 F 14e 2,081 804 (528) 2,357 (700) (200) 378 (522) (328) (328) 1,507 3,578
15

Improvement in demand environment key for further upside

Hexaware Financials
Income statement
Y/E Dec (Rs m n) Revenue YoY (%) EBITDA YoY (%) Depreciation & amortisation p EBIT YoY (%) Other income PBT Provision for taxation Effective tax rate (%) Profit after tax YoY (%) Exceptional items Net incom e C 10 10,546 1.5 938 (53.6) 242 696 (60.3) 249 945 92 9.7 853 (36.5) 224 1,077 C 11 14,505 37.5 2,646 182.1 248 2,398 244.5 677 3,075 407 13.2 2,668 212.8 2,668 C 12e 19,927 37.4 4,473 69.1 298 4,175 74.1 63 4,238 839 19.8 3,398 27.4 3,398 C 13e 22,521 13.0 4,786 7.0 337 4,449 6.6 125 4,574 1,006 22.0 3,568 5.0 3,568

Balance sheet
Y/E Dec (Rs m n) Net fixed assets Goodw ill and intangible assets Investments Cash & bank balance Debtors and unbilled revenues Other current assets Other non-current assets Total assets Equity Borrow ings Unearned revenues Other current liabilities Non-current liabilities Total liabilities C 10 2,919 1,160 397 4,356 2,253 1,298 182 12,564 9,655 112 85 2,700 13 12,564 C 11 3,408 1,377 229 4,377 3,507 1,433 195 14,525 10,162 135 4,196 32 14,525 C 12e 3,755 1,377 229 4,583 4,204 1,440 195 15,783 11,484 150 4,116 32 15,783 C 13e 4,113 1,377 229 5,027 4,751 1,490 195 17,182 12,961 200 3,988 32 17,182

Financial ratios
Y/E Dec Profitability and return ratio(%) EBITDAM EBITM NPM RoE Per share data (Rs) EPS CEPS BV DPS Valuation ratios PE (x) P/BV (x) ( ) P/S (x) EV/EBITDA (x) EV/Sales (x) Turnover ratio DSO (days) Source: Company, SSLe C 10 8.9 6.6 8.1 11.9 3.7 4.5 33.2 1.5 33.6 3.7 1.7 14.3 1.3 78 C 11 18.2 16.5 18.4 26.9 9.1 9.9 34.6 4.0 13.7 3.6 2.5 12.1 2.2 88 C 12e 22.4 21.0 17.1 31.4 11.4 12.4 38.7 6.0 10.9 3.2 1.9 7.2 1.6 77 C 13e 21.2 19.8 15.8 29.2 12.0 13.1 43.5 6.0 10.4 2.9 1.7 6.7 1.4 77

Cash flow statement

Y/E Dec (Rs m n) Net income Depreciation & amortisation Others Operating CF Purchase of fixed assets Purchase of investments Others Investing CF Issue of equity shares Proceeds from borrow ings Dividend paid (incl. dividend tax) Others Financing CF Inc/(dec) in cash & bank bal. Closing cash & bank bal. C 10 1,077 242 (1,197) 122 (340) (20,020) 22,042 1,682 33 (233) ( ) (75) (275) 1,529 4,356 C 11 2,668 247 (1,502) 1,413 (633) (12,713) 13,171 (175) 38 (1,243) ( (235) ) (1,439) (201) 4,377 C 12e 3,398 298 (1,197) 2,499 (645) 428 (217) (2,076) (2,076) 206 4,583 C 13e 3,568 337 (1,128) 2,776 (695) 453 (242) (2,090) (2,090) 444 5,027
16

Improvement in demand environment key for further upside

MindTree Financials
Income statement
Y/E Mar (Rs m n) Revenue YoY (%) EBITDA YoY (%) Depreciation & amortisation p EBIT YoY (%) Other income PBT Provision for taxation Effective tax rate (%) Profit after tax YoY (%) Non-controlling interest Net incom e F 11 15,090 16.4 1,778 (27.6) 712 1,066 (40.9) 242 1,304 288 22.1 1,016 (52.7) 1,016 F 12 19,152 26.9 2,930 64.8 695 2,235 109.7 385 2,615 430 16.4 2,185 115.1 2,185 F 13e 24,189 26.3 4,707 60.6 722 3,985 78.3 (295) 3,678 842 22.9 2,837 29.8 2,837 F 14e 25,936 7.2 4,451 (5.4) 852 3,599 (9.7) 437 4,025 926 23.0 3,099 9.2 3,099

Balance sheet
Y/E Mar (Rs m n) Net fixed assets Goodw ill Investments Cash & bank balance Debtors and unbilled revenues Other current assets Other non-current assets Total assets Equity Borrow ings Unearned revenues Other current liabilities Non-current liabilities Total liabilities F 11 3,007 1,112 459 3,275 1,549 743 10,145 7,762 41 41 2,095 206 10,145 F 12 2,676 1 3,082 602 4,556 1,308 1,122 13,346 9,572 444 19 3,277 34 13,346 F 13e 3,004 2 4,507 690 5,635 1,319 1,165 16,321 12,171 444 19 3,653 34 16,321 F 14e 3,052 3 6,907 1,042 6,043 1,389 1,215 19,648 15,008 444 19 4,143 34 19,648

Financial ratios
Y/E Mar Profitability and return ratio(%) EBITDAM EBITM NPM RoE Per share data (Rs) EPS CEPS BV DPS Valuation ratios PE (x) P/BV (x) ( ) P/S (x) EV/EBITDA (x) EV/Sales (x) Turnover ratio DSO (days) Source: Company, SSLe F 11 11.8 7.1 6.7 14.0 25.4 43.2 193.9 2.5 27.2 3.6 1.8 14.7 1.7 79 F 12 15.3 11.7 11.4 25.2 53.9 71.0 236.1 4.0 12.8 2.9 1.5 8.4 1.3 87 F 13e 19.5 16.5 11.7 26.1 69.7 87.4 299.1 5.0 9.9 2.3 1.2 5.0 1.0 85 F 14e 17.2 13.9 11.9 22.8 76.1 97.1 368.8 5.5 9.1 1.9 1.1 4.6 0.8 85

Cash flow statement

Y/E Mar (Rs m n) Net income Depreciation & amortisation Others Operating CF Purchase of fixed assets Purchase of investments Others Investing CF Issue of equity shares Proceeds from borrow ings Dividend paid (incl. dividend tax) Others Financing CF Inc/(dec) in cash & bank bal. Closing cash & bank bal. F 11 1,304 712 (1,583) 433 (840) (7,318) 7,775 (383) 139 15 (150) ( ) (2) 2 56 459 F 12 2,615 695 (1,247) 2,063 (484) (8,760) 6,938 (2,306) 144 402 (176) ( ) (5) 365 143 602 F 13e 3,678 722 (1,838) 2,562 (1,050) (1,425) 251 (2,224) (238) ( ) (12) (250) 88 690 F 14e 4,025 852 (1,348) 3,528 (900) (2,400) 398 (2,902) (262) ( ) (12) (274) 352 1,042
17

Improvement in demand environment key for further upside

MphasiS Financials
Income statement
Y/E Oct (Rs m n) Revenue YoY (%) EBITDA YoY (%) Depreciation & amortisation p Operating profit YoY (%) Other income (net) PBT Provision for taxation Effective tax rate (%) Profit after tax YoY (%) Exceptional items Net profit F 10 50,365 18.1 12,649 12.2 1,638 11,011 19.0 1,088 12,099 1,192 9.8 10,908 20.0 10,908 F 11 50,980 1.2 9,845 (22.2) 1,552 8,294 (24.7) 1,752 10,046 1,828 18.2 8,218 (24.7) 8,218 F 12e 54,282 6.5 10,494 6.6 1,757 8,737 5.3 1,398 10,135 2,348 23.2 7,787 (5.2) 7,787 F 13e 56,162 3.5 10,674 1.7 1,761 8,913 2.0 1,407 10,320 2,374 23.0 7,946 2.0 7,946

Balance sheet
Y/E Oct (Rs m n) Fixed assets Goodw ill Investments Cash and bank balances Debtors and unbilled revenues Other current assets Other non-current assets Total assets Equity Borrow ings Unearned revenues Other current liabilities Other non-current liabilities Total liabilities F 10 2,512 3,886 14,602 1,784 11,977 9,446 754 44,960 32,991 454 158 11,354 3 44,960 F 11 2,946 8,698 17,766 2,897 13,072 9,641 975 55,994 38,998 2,923 368 13,683 22 55,994 F 12e 2,557 9,698 22,000 3,884 13,385 9,944 975 62,443 45,187 3,290 297 13,646 22 62,443 F 13e 2,392 9,298 28,000 4,135 13,848 10,244 975 68,892 51,412 3,290 308 13,859 22 68,892

Financial ratios
Y/E Oct Profitability and return ratios (%) EBITDAM EBITM NPM RoE Per share data (Rs) EPS CEPS BV DPS Valuation ratios PE (x) P/BV (x) ( ) P/S (x) EV/EBITDA (x) EV/Sales (x) Turnover ratios DSO (days) Source: Company, SSLe F 10 25.1 21.9 21.7 38.6 52.0 59.8 157.2 4.0 7.5 2.5 1.6 5.2 1.3 87 F 11 19.3 16.3 16.1 22.8 39.1 46.5 185.7 6.5 10.0 2.1 1.6 6.5 1.3 94 F 12e 19.3 16.1 14.3 18.5 37.1 45.4 215.1 6.5 10.5 1.8 1.5 5.6 1.1 90 F 13e 19.0 15.9 14.1 16.5 37.8 46.2 244.7 7.0 10.3 1.6 1.5 5.0 0.9 90

Cash flow statement

Y/E Oct (Rs m n) PBT Dep & amortisation Others Operating CF Purchase of fixed assets Purchase of investments Others Investing CF Proceeds from share capital issue Availment of loans Dividend paid incl. dividend tax Others Financing CF Changes in cash and cash equi. Closing cash & bank bal. F 10 12,099 1,638 (5,310) 8,427 (890) (6,988) (64) (7,943) 4 444 (858) 8 (403) 81 1,784 F 11 10,046 1,552 (3,458) 8,139 (1,969) (2,937) (3,393) (8,300) 1 2,300 (980) ( ) (27) 1,293 1,133 2,897 F 12e 10,135 1,757 (3,071) 8,821 (1,368) (4,234) (1,000) (6,603) 367 (1,598) (1,231) 987 3,884 F 13e 10,320 1,761 (2,914) 9,167 (1,595) (6,000) 400 (7,195) (1,721) (1,721) 251 4,135
18

Improvement in demand environment key for further upside

NIIT Technologies Financials

Income statement
Y/E Mar (Rs m n) Revenue YoY (%) EBITDA YoY (%) Depreciation & amortisation p EBIT YoY (%) Other income PBT Provision for taxation Effective tax rate (%) Profit after tax YoY (%) Minority interest Profit after tax F 11 12,323 34.9 2,404 27.3 315 2,089 36.5 88 2,177 323 14.8 1,854 45.2 32 1,822 F 12 15,765 27.9 2,684 11.7 364 2,320 11.0 282 2,602 638 24.5 1,964 5.9 (8) 1,972 F 13e 19,834 25.8 3,474 29.5 492 2,982 28.6 215 3,197 884 27.6 2,314 17.8 52 2,262 F 14e 21,951 10.7 3,859 11.1 558 3,301 10.7 139 3,440 929 27.0 2,511 8.5 52 2,459

Balance sheet
Y/E Mar (Rs m n) Net fixed assets Goodw ill and intangible assets Investments Cash & bank balance Debtors and unbilled revenues Other current assets Other non-current assets Total assets Equity Borrow ings Unearned revenues Other current liabilities Non-current liabilities Total liabilities F 11 2,312 955 443 1,139 3,533 , 1,267 491 10,139 7,521 107 1 2,507 3 10,139 F 12 2,868 1,365 549 2,223 4,642 , 1,013 602 13,262 9,222 486 59 3,491 3 13,262 F 13e 3,636 1,398 650 2,343 5,706 , 1,207 661 15,600 10,931 486 76 4,104 3 15,600 F 14e 4,099 1,458 750 3,209 6,315 , 1,304 706 17,841 12,799 486 90 4,461 3 17,841

Financial ratios
Y/E Mar Profitability and return ratio(%) EBITDAM EBITM NPM RoE Per share data (Rs) EPS CEPS BV DPS Valuation ratios PE (x) P/BV (x) ( ) P/S (x) EV/EBITDA (x) EV/Sales (x) Turnover ratio DSO (days) Source: Company, SSLe F 11 19.5 17.0 14.8 27.3 30.8 36.1 126.9 7.5 9.4 2.3 1.4 6.5 1.3 109 F 12 17.0 14.7 12.5 23.6 33.1 39.2 154.6 8.0 8.8 1.9 1.1 5.6 1.0 112 F 13e 17.5 15.0 11.4 22.4 37.7 45.9 182.4 8.5 7.7 1.6 0.9 4.3 0.7 109 F 14e 17.6 15.0 11.2 20.7 41.0 50.3 213.6 9.0 7.1 1.4 0.8 3.6 0.6 109

Cash flow statement

Y/E Mar (Rs m n) Profit before tax Depreciation & amortisation Others Operating CF Purchase of fixed assets Purchase of investments Others Investing CF Issue of equity shares Proceeds from borrow ings Dividend paid (incl. dividend tax) Others Financing CF Inc/(dec) in cash & bank bal. Closing cash & bank bal. F 11 2,177 315 (1,938) 554 (502) (2,570) 2,698 (374) 65 36 (487) ( (164) ) (549) (369) 1,139 F 12 2,602 364 (1,323) 1,643 (931) (3,066) 3,012 (985) 54 433 (511) ( (144) ) (167) 490 2,223 F 13e 3,197 492 (1,571) 2,119 (1,293) (101) (1,394) 3 (608) (605) 120 2,343 F 14e 3,440 558 (1,308) 2,689 (1,080) (100) (1,180) (643) (643) 867 3,209
19

Key to investment Ratings Guide to the expected return over the next 12 months. 1=BUY (expected to give absolute returns of 20 or more percentage points); 2=ACCUMULATE/ADD (expected to give absolute returns between 10 to 20 percentage points); 3=REDUCE (expected to give absolute returns between 0 to 10 percentage points); 4=SELL (expected to give absolute negative returns)

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Similarly, this document does not have regard to the specific investment objectives, financial situation/circumstances and the particular needs of any specific person who may receive this document. The securities discussed in this report may not be sui for all the investors. The securities described herein may not be eligible for sale in all jurisdictions or to all categories of investors. The countries in which the companies mentioned in this report are organized may have restrictions on investments, voting rights or dealings in securities by nationals of other countries. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Persons who may receives this document should consider and independently evaluate whether it is sui for his/ her/their particular circumstances and, if necessary, seek professional/financial advice. Any such person shall be responsible for conducting his/her/their own investigation and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this document. The price and value of the investments referred to in this document/material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Future returns are not guaranteed and a loss of original capital may occur. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. SBICAP Group does not provide tax advise to its clients, and all investors are strongly advised to consult regarding any potential investment. 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Though utmost care has been taken to ensure its accuracy, no representation or warranty, express or implied is made that it is accurate or complete. SBICAP Group has reviewed the report and, in so far as it includes current or historical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. SBICAP Group endeavors to update on a reasonable basis the information discussed in this document/material, but regulatory, compliance or other reasons may prevent us from doing so. The opinions expressed in this document/material are subject to change without notice and have no obligation to tell the clients when opinions or information in this report change. This report or recommendations or information contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media and should not be reproduced, transmitted or published by the recipient. 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