HCL TECHNOLOGIES

Income Statement 2012A 2013A

Revenues 21037 25932
Employees benefits expense 11105 12574
Other Expenses 6031 7346
Depreciation and Amortization cost 549 637
EBIT 3352 5376
Interest expense (net of interest income) 143 106
EBT 3210 5270
Tax Expense 783 1225
Profits after tax (continuing operations) 2427.08 4044.58
Income from discontinued operations (net of taxes) 0 0
Consolidated net income 2427 4045
Minority interest share of profits 0 -4
Consolidated net income attributable to HCL 2427 4049

Balance Sheet - Assets 2012A 2013A

Cash 1948 3577
Inventories 226 232
Accounts Receivables 3876 4497
Investment 546 627
Other current assets 1825 2129
Loans 675 1572
Other financial assets 0 0
Total current assets 9095 12634

Property & Equipment 1918 2193

Goodwill 0 0
Capital WIP 578 494
Other intangible assets 4535 4560
Investments 127 86
Loans 996 1274
Other Financial assets 0 0
Deferred Tax assets 662 742
Other non current assets 426 418
Total assets 18338 22399

Balance Sheet - Liabilities and equity 2012A 2013A

Short term debt 449 129
Accounts payable 469 401
Other financial liabilities 0 0
Provision 1467 1722
Current tax liabilities 0 0
Other short term liabilities 4168 5221
Total current liabilities 6553 7472

Long term debt 1077 797

Other financial liabilities 0 0
Other long term liabilities 662 720
Long term provision 207 201
Deferred tax liabilities

Minority intrest 1 45
Common equity 9838 13164
Total liabilities and equity 18338 22399
Check 1 1
 NAME - PRAPHUL GUPTA
ENROLLMENT NUMBER - JL18FS039

2014A 2015A 2016A 2017A 2018A 2019A

32821 37841 31676 48640 51786 61370
14906 17726 15093 22866 24729 29283
9202 10502 9147 14316 14594 17218
681 404 393 828 1383 2073
8032 9208 7043 10630 11080 12796
115 91 74 89 69 174
7917 9117 6969 10541 11011 12622
1410 1815 1364 1936 2302 2502
6507.76 7301.95 5605.25 8604.50 8709 10120
0 0 0 0 0
6508 7302 5605 8605 8709 10120
-18 25 18 -38 1 0
6526 7277 5587 8643 8708 10120

2014A 2015A 2016A 2017A 2018A 2019A

8807 9786 9285 1321 1699 5934
122 158 264 276 172 91
5683 6539 7682 8301 9639 11706
606 763 535 1146 2357 2220
2521 3613 3754 1768 1506 1952
1590 2189 3340 2528 3410 1312
0 0 0 11130 5775 6507
19330 23047 24860 26470 24558 29722

2658 3404 3817 3998 4560 5293

0 0 0 6504 6799 9061
531 552 606 448 320 235
4786 4872 6139 4733 7394 8534
55 107 321 160 303 85
1429 1442 1746 0 235 355
0 0 0 710 857 1201
815 790 826 1652 1837 2455
375 1032 1030 1094 1160 1634
29980 35245 39344 45769 48023 58575

2014A 2015A 2016A 2017A 2018A 2019A

206 355 214 62 42 724
468 625 700 801 918 1305
0 0 0 7545 6606 6950
1462 1734 1804 473 530 586
0 0 0 739 686 924
7105 7231 7442 1722 1325 1810
9242 9945 10160 11342 10107 12299

201 168 737 383 338 2977

0 0 0 25 246 536
736 615 443 201 212 247
194 211 398 696 700 821
0 34 226

57 82 312 173 0 103

19550 24224 27294 32950 36386 41366
29980 35245 39344 45769 48023 58575
1 1 1 1 1 1
 HISTORICAL
Income Statement ratios Unit 2013A 2014A 2015A
Year on year revenue growth % 23% 27% 15%
Employees benefit expenses as % revenues % 48% 45% 47%
Other Expenses as % revenue % 28% 28% 28%
Depreciation expenses as % of opening Property & Equipment % 33% 31% 15%
Interest expenses as % of opening total debt % 7% 12% 22%
Effective tax rate as % of pre-tax profit % 23% 18% 20%
Minority share of profit as % of total consolidated profit % 0% 0% 0%

Balance Sheet ratios Unit 2013A 2014A 2015A

Accounts Receivables as % of total revenues % 17% 17% 17%
Property & Equipment as % of total revenues % 8% 8% 9%
Capital WIP as % of total revenues % 2% 2% 1%
Accounts payables as % of total revenue % 2% 1% 2%
Inventory as % of Total revenue % 1% 0% 0%

Key cash flow numbers Unit 2013A 2014A 2015A

Short term borrowings added INR Million 48 73 582
Short term borrowings repaid INR Million 392 0 456

Long term borrowings added INR Million 65 11 91

Long term borrowings repaid INR Million 619 34 17

Dividends paid to minority interest (USD bn) INR Million 0 0 0

Dividends paid to common shareholders (USD bn) INR Million 695 1118 2385
share buyback from minority interest (USD bn) INR Million 0 0 0
Common equity sharebuy back (USD bn) INR Million 0 0 0
Dividend payout ratio as % of total profit % 17% 17% 33%
HISTORICAL FORECASTED
2016A 2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E
-16% 54% 6% 19% 16% 16% 22% 16% 17%
48% 47% 48% 48% 48% 48% 48% 48% 48%
29% 29% 28% 28% 28% 28% 28% 28% 28%
12% 22% 35% 45% 48% 50% 53% 55% 58%
14% 9% 16% 46% 21% 21% 23% 25% 27%
20% 18% 21% 20% 20% 20% 20% 20% 20%
0% 0% 0% 0% 0% 0% 0% 0% 0%

2016A 2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E

24% 17% 19% 19% 19% 20% 19% 19% 19%
12% 8% 9% 9% 9% 9% 9% 9% 9%
2% 1% 1% 0% 1% 1% 1% 1% 1%
2% 2% 2% 2% 2% 2% 2% 2% 2%
1% 1% 0% 0% 0% 0% 0% 0% 0%

2016A 2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E

52 197 0 1404 0 0 0 0 0
195 381 33 698 714 0 0 0 0

693 31 19 3105 0 0 0 0 0
69 243 134 188 365 364 259 2216 0

0 0 0 0 0 0 0 0 0
2251 3385 1691 1099 2162 2162 2162 2162 2162
0 0 0 292 0 0 0 0 0
0 0 3500 4000
40% 39% 19% 11% 28% 28% 25% 22% 23%
Income Statement 2012A 2013A
Revenues 21037 25932
Employees benefits expense 11105 12574
Other Expenses 6031 7346
Depreciation and Amortization cost 549 637
EBIT 3352 5376
Interest expense (net of interest income) 143 106
EBT 3210 5270
Tax Expense 783 1225
Profits after tax (continuing operations) 2427.08 4044.58
Income from discontinued operations (net of taxes) 0 0
Consolidated net income 2427 4045
Minority interest share of profits 0 -4
Consolidated net income attributable to HCL 2427 4049

Balance Sheet - Assets 2012A 2013A

Cash 1948 3577
Inventories 226 232
Accounts Receivables 3876 4497
Investment 546 627
Other current assets 1825 2129
Loans 675 1572
Other financial assets 0 0
Total current assets 9095 12634

Property & Equipment 1918 2193

Goodwill 0 0
Capital WIP 578 494
Other intangible assets 4535 4560
Investments 127 86
Loans 996 1274
Other Financial assets 0 0
Deferred Tax assets 662 742
Other non current assets 426 418
Total assets 18338 22399

Balance Sheet - Liabilities and equity 2012A 2013A

Short term debt 449 129
Accounts payable 469 401
Other financial liabilities 0 0
Provision 1467 1722
Current tax liabilities 0 0
Other short term liabilities 4168 5221
Total current liabilities 6553 7472
Long term debt 1077 797
Other financial liabilities 0 0
Other long term liabilities 662 720
Long term provision 207 201
Deferred tax liabilities

Minority intrest 1 45
Common equity 9838 13164
Total liabilities and equity 18338 22399
Check 1 1
 2014A 2015A 2016A 2017A 2018A 2019A 2020E 2021E
32821 37841 31676 48640 51786 61370 70886 81908
14906 17726 15093 22866 24729 29283 33824 39083
9202 10502 9147 14316 14594 17218 19888 22980
681 404 393 828 1383 2073 2539 3085
8032 9208 7043 10630 11080 12796 14636 16760
115 91 74 89 69 174 794 557
7917 9117 6969 10541 11011 12622 13843 16203
1410 1815 1364 1936 2302 2502 2769 3241
6507.76 7301.95 5605.25 8604.50 8709 10120 11074 12962
0 0 0 0 0 0 0
6508 7302 5605 8605 8709 10120 11074 12962
-18 25 18 -38 1 0 0 0
6526 7277 5587 8643 8708 10120 11074 12962

2014A 2015A 2016A 2017A 2018A 2019A 2020E 2021E

8807 9786 9285 1321 1699 5934 16241 21885
122 158 264 276 172 91 105 121
5683 6539 7682 8301 9639 11706 13651 16097
606 763 535 1146 2357 2220 1404 1532
2521 3613 3754 1768 1506 1952 2519 2300
1590 2189 3340 2528 3410 1312 2556 2629
0 0 0 11130 5775 6507 4682 5619
19330 23047 24860 26470 24558 29722 41158 50184

2658 3404 3817 3998 4560 5293 6114 7064

0 0 0 6504 6799 9061 7455 7772
531 552 606 448 320 235 709 819
4786 4872 6139 4733 7394 8534 6334 6627
55 107 321 160 303 85 195 213
1429 1442 1746 0 235 355 756 618
0 0 0 710 857 1201 554 664
815 790 826 1652 1837 2455 1512 1656
375 1032 1030 1094 1160 1634 1190 1222
29980 35245 39344 45769 48023 58575 65976 76839

2014A 2015A 2016A 2017A 2018A 2019A 2020E 2021E

206 355 214 62 42 724 10 10
468 625 700 801 918 1305 1507 1742
0 0 0 7545 6606 6950 4220 5064
1462 1734 1804 473 530 586 1025 884
0 0 0 739 686 924 470 564
7105 7231 7442 1722 1325 1810 3906 3241
9242 9945 10160 11342 10107 12299 11139 11505
 201 168 737 383 338 2977 2612 2248
0 0 0 25 246 536 161 194
736 615 443 201 212 247 344 289
194 211 398 696 700 821 565 636
0 34 226 774 786

57 82 312 173 0 103 103 103

19550 24224 27294 32950 36386 41366 50278 61078
29980 35245 39344 45769 48023 58575 65976 76839
1 1 1 1 1 1 1 1
2022E 2023E 2024E
99860 115427 135528
47649 55077 64668
28017 32384 38024
3741 4777 5770
20453 23190 27066
512 506 -59
19941 22683 27125
3988 4537 5425
15953 18147 21700
0 0 0
15953 18147 21700
0 0 0
15953 18147 21700

2022E 2023E 2024E

30272 39994 54337
148 171 201
18707 22007 25962
1732 1849 1747
2009 2057 2167
2487 2479 2293
6743 5865 5883
62097 74423 92591

8613 9955 11689

8096 7774 7880
999 1154 1355
6725 7123 7068
191 197 176
393 471 519
797 815 806
1822 1857 1860
1260 1293 1320
90992 105062 125265

2022E 2023E 2024E

10 10 10
2123 2455 2882
6077 5783 5619
700 745 788
677 664 660
2401 2537 2779
11988 12194 12738
1989 -227 -227
232 274 280
259 270 282
684 681 677
869 914 1022

103 103 103

74868 90853 110390
90992 105062 125265
1 1 1
HCL TECHNOLOGIES

Cash flow statement 2020E 2021E

Cash flow from operations 12845 13605
Consolidated net income from continuing operations 11074 12962
Add: Depreciation and amortization 2539 3085
Add: Interest expense 794 557
Add: Increase in accounts payable 202 234
Add: Increase in other short term liabilities 2096 -665
Add: Increase in Provision 439 -142
Add: Increase in other financial liability -2730 844
Add: Increase in current tax liability -454 94
Less: Increase in investment -816 128
Less: Increase in accounts receivables 1945 2446
Less: Increase in other current assets 567 -219
Less: Increase in Loan 1244 73
Less: Increase in other financial assets -1825 936

Cash flow from investment 1497 -4877

Less: Capex in property & equipment 3359 4036
Less: Increase in goodwill -1606 317
Less: Increase in Capital WIP 474 65
Less: Increase in Investments 110 18
Less: Increase in Loans 401 -137
Less: Increase in Deferred Tax assets -943 144
Add: Decrease in other long term assets 444 -32
Add: Decrease in Other intangible assets 2200 -293
Add: Decrease in Other Financial assets 647 -111

Cash flow from financing -4035 -3083

Add: New short term debt to be raised 0 0
Add: New long term debt to be raised 0 0
Less: Interest expense 794 557
Less: Short term debt to be repaid 714 0
Less: Long term debt to be repaid 365 364
Less: Dividends to be paid to common shareholders+ Minority Interest 2162 2162
Less: Share buyback from common shareholders+ Minority Interest 0 0

Net cash flows 10307.4 5644

Opening cash balance 5934 16241
Closing cash balance 16241 21885
2022E 2023E 2024E
17190 21055 24160
15953 18147 21700
3741 4777 5770
512 506 -59
382 331 427
-840 136 242
-184 45 43
1013 -294 -165
113 -13 -4
200 117 -102
2610 3301 3955
-291 48 110
-142 -8 -186
1124 -877 18

-5869 -6449 -7713

5290 6119 7504
324 -322 106
67 83 109
-22 6 -21
-226 79 47
166 34 4
-38 -33 -27
-98 -398 54
-133 -17 8

-2933 -4885 -2103

0 0 0
0 0 0
512 506 -59
0 0 0
259 2216 0
2162 2162 2162
0 0 0

8387 9722 14343

21885 30272 39994
30272 39994 54337
Free cash flow to firm calculation (FCFF)
Operating cash profit calculation FY 2019A FY2020E FY2021E
Revenues 70886 81908
Less: Operating expenses (COGS + SGA) 53712 62063
Less: Depreciation 2539 3085
Earnings before interest and tax (EBIT) 14636 16760
Less: Operating taxes 2927 3352
Post tax operating profit (NOPLAT) 11709 13408
Add: Depreciation 2539 3085
Post tax operating cash profit 14247 16493

Operating cash investments FY 2019A FY2020E FY2021E

Capital expenditures investments -1497 4877

Working Capital 15909 20698 23518

Increase in working capital 4789.0 2820.1
Operating cash investments 3293 7698

Free cash flow to firm FY 2019A FY2020E FY2021E

FCFF 10955 8796

Cost of Capital calculation Percent

Tax rate 20% 2019 tax rate
Cost of debt Gurufocus
Cost of equity Gurufocus
Target capital structure (debt to capital) Gurufocus
WACC (Weighted average cost of capital) 3.8% WACC=% of debt in total capital*post tax cost of debt+%

Present value of future cash flows FY 2019A FY2020E FY2021E

Years from current 1 2
Discount factor 1.0 0.9
Present value of FCFF 10554 8163

Terminal value calculation FY 2019A FY2020E FY2021E

Terminal growth
Terminal value TV=FCFF (2024)*(1+g)/(WACC-g)
Present value of terminal value

Share price calculation FY 2019A

Enterprise value (EV) for HCL 1122635
 Less: Short term debt 724
Less: Long term debt 2977
Less: Other long term liabilities 247
Add: Cash and cash equivalents 5934
Add: Other long term assets 1634
Consolidated equity value 1126255
Less: Value of minority interest 99795
Walmart's equity value 1026460
Total shares outstanding (bn) 1356.0 as per consolidated income statement (diluted figure)
Walmart's equity value per share 757.0
Current market price 1146
Gap 51%

SENSITIVITY ANALYSIS
GROWTH RATE
757.0 1.5% 2.0% 2.5%
1.80%
2.80%
WACC

3.80%
4.80%
5.80%
 FY2022E FY2023E FY2024E
99860 115427 135528
75665 87461 102691
3741 4777 5770
20453 23190 27066
4091 4638 5413
16363 18552 21653
3741 4777 5770
20104 23328 27423

FY2022E FY2023E FY2024E

5869 6449 7713

26485 29680 34059

2966.6 3195.4 4378.6
8836 9644 12092

FY2022E FY2023E FY2024E

11268 13684 15331

otal capital*post tax cost of debt+% of equity*cost of equity

FY2022E FY2023E FY2024E

3 4 5
0.9 0.9 0.8
10075 11788 12723

FY2022E FY2023E FY2024E

2.5% AS PER GDP GROWTH RATE
1003146 1280433.25
1062601
come statement (diluted figure)

WTH RATE
3.0% 3.5%