IT Industry Analysis

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IT Industry Analysis 2010 - top 3 players - Financial Analysis

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IT Industry Analysis

  1. 1. IT Industry Analysis Presented by Sompal Duhan Deepa Chandrasekar Prof . Aman Chugh
  2. 2. World's largest software companies • A Top 10 extract of the world's largest software companies according to the Forbes Global 2000 is provided below Source : www.wikipedia.com www.forbes.com Image Source : respective Company Websites
  3. 3. Computers - Software – Large Cap (12) Image Source : respective Company Websites
  4. 4. Industry Financials – Computers - Software Large Cap (in Cr.) • Equity - 1833.24 • Sales - 100654.21 • NP - 24267.7 • M.Cap - 525559.66 • P/E - 21.66
  5. 5. Size of the Industry 5.7 45 83 85 175 0 20 40 60 80 100 120 140 160 180 200 1995-2000 2000-2005 2005-2009 2009 2020 Size - in Billion $ Source : Nasscom
  6. 6. Sector Wise Contribution to Indian GDP • Contribution in Indian GDP – The Indian Information Technology industry accounts for a 5.9% of the country's GDP Source : Nasscom 5.9%
  7. 7. FDI Flow in IT Sector • 100% FDI is permitted through automatic route. From April 2000 to January 2009 SECTOR AMOUNT OF FDI INFLOWS PERCENT OF TOTAL FDI INFLOWS (In terms of Rs) In Rs Million In US$ Million Services Sector 787420.81 18118.40 22.39 Computer Software & hardware 391109.74 8876.43 11.12 Source : www.fdi.com
  8. 8. Exports grew 15.01 % • Growth of software exports made by STP, considering the global recession. The exports grew from Rs 180155.31crore in 2007-08 to Rs 207357.92 crore in 2008-09, with a YOY growth of 15.01 %. • STP Scheme, which is a 100% export oriented scheme, has attracted many entrepreneurs in the area of software and services. • As on 31st March 2009, 8455 units were operative out of which 7214 units have exported software in FY 2008-09. Source : http://www.stpp.soft.net/latestnews.html
  9. 9. Major Takeover • Satyam's new board of directors, which met to select the highest bidder, chose Tech Mahindra following its bid of Rs 1,757 crore for 31 per cent stake in the scam-tainted IT giant. • Tech Mahindra offered Rs 58 for each Satyam share. TAKE OVER
  10. 10. Major Industry Players TCS Infosys Wipro Source : infoindialine.com
  11. 11. Infosys Source : www.infosys.com
  12. 12. Finacle – Product of • A universal banking solution to large and medium size banks across India and overseas. • Infosys BPO, the company provides finance and accounting, and administration and sales order processing.
  13. 13. PAT & EBITA of 0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00 PAT Rs crs 0.00 2,000.00 4,000.00 6,000.00 8,000.00 10,000.00 EBIDTA Rs crs
  14. 14. Revenue Margins of • Q1 revenues at US$ 1,358 million • Growth of 4.8% QoQ and 21% YoY • 38 clients added in the quarter • 97% from the existing clients 0.00 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 2006 2007 2008 2009 2010 Revenue In Rs crs
  15. 15. TATA Consultancy Services • India's IT Services industry was born in Mumbai in 1967 with the establishment of Tata Group in partnership with Burroughs. • The first software export zone SEEPZ was set up here way back in 1973, the old avatar of the modern day IT park. Source : wikipedia & www.tcs.com
  16. 16. PAT Margins of 0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00 8,000.00 20062007200820092010 EBIDTA 0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 20062007200820092010 PAT In Rs crs In Rs crs
  17. 17. Revenue Margins of 0.00 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 20062007200820092010 EBIDTA Financial Highlights for Quarter Ended June 30, 2010: • Operating Profits at $487 million; Growth 32.5% Y-o-Y and 5.1% Q-o-Q • Profit After Tax at $403 million; Growth of 29.3% Y-o-Y and (4.9) % Q-o-Q • Earnings Per Share at $0.21 Source :http://www.tcs.com/news_events/press_releases/Pages/ In Rs crs
  18. 18. Wipro • 1945 - Western India Vegetables Products Limited. • 1970 – Infotech Area • 1977 – Wipro • 1981 – Launched the 1st mini computer • 2000 – Listed in NYSE – Mcap - USD $ 24 billion
  19. 19. PAT Margins of 0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 20062007200820092010 PAT 0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00 2006 2007 2008 2009 2010 EBIDTA In Rs crs in Rs crs
  20. 20. Revenue Margins of 0.00 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 2006 2007 2008 2009 2010 Revenue For the quarter ended March 31, 2010, • IT Products business recorded revenues of Rs. 8.90 billion, • representing a growth of 2% YoY. • EBIT for this segment was Rs. 262 million. • Operating Income to revenue for the quarter was 2.9%. http://www.wipro.in/Company/ In Rs crs
  21. 21. Comparison of the Major Player Company Market Cap (Rs. in Cr.) P/E (TTM) (x) P/BV (TTM) (x) EV/EBIDTA (x) ROE (%) ROCE (%) TCS 169,444.59 28.72 11.28 21.82 39.5 44.6 InfosysTech 164,367.83 28.73 7.46 16.84 29.1 37.8 Wipro 106,269.51 22.09 6.01 16.25 32.4 28.5 0 10 20 30 40 50 TCS Infosys Wipro P/E EV/EBIDTA ROE Source : infoindialine.com
  22. 22. Som Mittal – Nasscom Chief • The information technology (IT) sector In India is to grow by 4%-7% this fiscal and is expected to attain a double- digit growth in the next fiscal starting from April 2010.
  23. 23. Latest News…. • TCS (Mr.Ratan Tata) & Infosys (Mr.Narayana Murthy) looking for the successors….
  24. 24. Thankyou! From Sompal & Deepa

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