Professional Documents
Culture Documents
CLOUD COMPUTING
Market in India is likely to grow from $900 to $3-4 billion in 2015.About 60% of enterprise workload will be on cloud in 5 years. 25% Of the Indian Market in India is Private Cloud The Global Size of Public cloud (SAAS,PAAS& IAAS ) is expected to grow by $160 billion by 2020
VISA
Indian IT majors and other companies are increasingly facing problems relating to the L1 and B1/B2 visas needed to carry out business in the US. The H1B visa category, which is also used in large numbers by Indian IT companies,. H1B is also expensive and comes with lots of administrative constraints, multiple levels of US government scrutiny and compliance requirements. "The B1 in lieu of H1B category is among the most difficult and has been under attack in the US Congress with talk of it being revoked altogether.
ATTRITION
The IT industry witnessed an average attrition of 17-25 per cent in FY12 while the average attrition across sectors-manufacturing, banking and others-was at about eight per cent. The software industry clocked one of its highest attrition rates in FY11.Attrition, which is defined as employees resigning or retiring and does not include people who were fired, has a direct relation to the growth of the sector and India's GDP. When the industry is expanding, new firms set up shop and hire employees on a higher salary, which leads to resignations
INFRASTRUCTURE
The development of country is dependent on infrastructure. For companies that believe in the long term story of India ,this is a probably a good time as one can get real estate and talent at relatively lower cost. Builders in Hyderabad charge 30- 80 per sq. feet in large IT Parks .
It's highly professionally managed IT consulting and services company under the belt of TATA TCS has been building a full set of SAP life cycle services, from consulting to implementation, managed services, BPO and hosting, while deepening its technical and functional capability. Clients cite TCS's commitment to delivery excellence, flexibility to changing requirements, great teamwork and technical expertise as key strengths.
SWOT ANALSIS
Strengths
Weakness
Made progress in commoditized services, but still lags some peers and multinational rivals in highend consulting offerings. Over dependence on US market Fueling the rapid growth has resulted in TCS relying more on junior, albeit well-trained, resources, which has given rise to clients' perception of inconsistent quality of consultants, skills mismatch and resource ramp-up delays.
Threats
People-led linear growth means Cognizant can beat it, and there are no visible leaders beyond N Chandrasekaran. That could pose a big challenge. Cheaper technology Exchange rate fluctuation Attrition
JAPAN
VALUATIONS
DCF
Discounted cash flow tries to work out the value of a company today, based on projections of how much money it's going to make in the future. DCF works best when there is a high degree of confidence about future cash flows. DCF analysis says that a company is worth all of the cash that it could make available to investors in the future.
Read more:
FCF(1+g)/Ke-g FCF*DF DF 268,420.45 2,338.72 0.87 2,033.67 280,415.59 279,797.56 1,429.58 3,400.04 0.76 2,570.92 3,847.37 4,439.67 4,671.28 0.66 0.57 0.50 2,529.71 2,538.39 2,322.45 2013 EBIT 16,347.10 Tax 4086.774265 PAT 12,260.32 Depreciation 1,027.57 Working Capital changes -3216.0975 Capex 1039.39 FCF 13,409.45 2014 19,225.41 4806.351665 14,419.05 1,408.02 -3376.90238 1165.20 15,222.74 2015 22,609.93 5652.483748 16,957.45 1,915.57 -3545.74749 1291.19 17,296.45 2016 26,589.05 6647.2633 19,941.79 2,589.90 -3723.0349 1409.39 19,665.53 2017 31,266.26 7816.566 23,449.70 3,482.61 -3909.1866 1507.91 22,368.37
WACC
15.00%
VALUATION
FCFE
This is a measure of how much cash can be paid to the equity shareholders of the company after all expenses, reinvestment and debt repayment. The FCFE is a measure of what a firm can afford to pay out as dividends. Dividends paid are different from the FCFE for a number of reasons Desire for Stability, Future Investment Needs , Tax Factors.
2012 Year_Index Growth pat per share Add: Depr Less: Capex Less: Delta WC FCFE Beta Ke PV of FCFE 0 53.09 4.690017 6.044131 14.97537 36.76 2013 1 19% 62.91598 5.55767 7.162295 11.37796 49.93 0.75 13.3% 2015 2016 CAGR growth 2 3 4 19% 19% 19% 74.55544 88.34819 104.6926 6.585839 7.80422 9.248 8.48732 10.05747 11.91811 13.48289 15.97722 18.93301 59.17 70.12 83.09 0.75 0.75 0.75 13.3% 13.3% 13.3% 2014 2017 5 19% 124.0607 10.95888 14.12296 22.43561 98.46 0.75 18.5% 2019 transition 6 7 15.80% 13.10% 143.6623 162.4821 12.69038 14.35282 16.35438 18.49681 22.70605 21.8004 117.29 136.54 0.73 0.71 13.1% 13.0% 2018 2020 8 10.40% 179.3802 15.84552 20.42048 19.57443 155.23 0.69 12.8% 2021 9 7.70% 193.1925 17.06562 21.99285 15.99984 172.27 0.67 12.7% 2023 stable 10 11 5.00% 5% 202.8521 212.9948 17.9189 18.81485 23.09249 24.24712 11.1895 11.74897 186.49 195.81 0.65 0.65 12.6% 12.6% 2022
44.09129 46.13526 48.27398 50.51185 42.13788 56.00972 58.14478 59.09917 58.78003 57.17397 53.33867
Sum of High Growth Sum of Transition Phase Terminal Value PV of TV P0 Target Price
3 STAGE MODEL T Three-stage model has an initial phase of stable high growth that lasts for a certain period. In the second phase the growth rate declines linearly until it reaches the a final stable growth rate. This model improves upon both previous models and can be applied to nearly all firms.
growth 18 18 18 18 18 18 PV of DPS in HG 14% 14% 8% 8% 8% PV of DPS in Transition Terminal Value PV of TV Intrinsic Value
11.5 11.78915 12.08557 12.38945 12.70097 13.02032 73.48546 14.52161 15.09735 23.35414 25.51656 27.8792 106.3689 2600.17 1204.382 1384.236
RELETATIVE VALUATIONS
A business valuation method that compares a firm's value to that of its competitors to determine the firms financial worth. Use of relative valuation models is to determine whether a company's stock is a good buy. When performing a relative valuation, a company's sector should be used to determine the most logical multiple to use.
Net Income Book Value Of Equity Dividend Earnings Per Share Pay Out Ratio Retention Ratio Growth Rate Return On Equity Dividends Per Share Growth Rate Payout Ratio
A procedure for valuing the price of a stock by using predicted dividends and discounting them back to present value. The principal behind the model is the net present value of the cash flows. To get a growth number, one option is to take the return on equity (ROE) and multiply it by the retention ratio (which is 1-the payout ratio).
1.148599478 1.112268763 1.085720499 1.126971576 1.104079428 1.096708461 1.092129344 1.386330375 1.170382566 1.297578266
Projections Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 EPS 62.64 73.64 86.55 101.83 119.70 Payout Ratio 20.32% 20.32% 20.32% 20.32% 20.32% Estimated Dividends 30.00 45.00 50.00 55.00 60.00 Cost Of Equity 12.84% 11.84% 11.34% 10.84% 10.34% Present Value 26.58631691 35.9764409 36.2256639 36.4398534 36.6848166
Terminal Value PV of TV
2075.037248 1306.167588
0 11/18/2010
2/26/2011
6/6/2011
9/14/2011
12/23/2011 Dates
4/1/2012
7/10/2012
10/18/2012
1/26/2013
Bollinger Bands