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SRI KRISHNA CONSULTING

                                               COMPANY FINALYTICS




                                                     Microsoft Corp 


                         Exclusive Fundamental Analysis of US Stocks



                                                        Prepared and Edited By‐
                                                 SRI KRISHNA CONSULTING


                                  Download more reports from http://www.srikrishnaconsulting.com




                                                                      Disclaimer

   The information, opinions, estimates and forecasts contained in this document have been arrived at or obtained from public sources believed to be 
reliable and in good faith which has not been independently verified and no warranty, express or implied, is made as to their accuracy, completeness or 
                                                                      correctness. 




        For more information about this sample and our other services, please write to info@srikrishnaconsulting.com



                                                    Monday, June 04, 2012
Description                                                    Page

                              Summary                                                                               3
                                               Latest Result                                                        3
                                               Valuation Matrix                                                     3
                                               ROE Analysis                                                         3

                              Income Statement                                                                      4

                              Balance Sheet                                                                         5

                              Cash flow Statement                                                                   6

                              Quarterly Result                                                                      6

                              Growth Analysis                                                                       7

                              Comparative Analysis                                                                  8
                                            Income Statement                                                        8
                                            Balance Sheet                                                           8

                              Index Analysis                                                                        9
                                               Income Statement                                                     9
                                               Balance Sheet                                                        9

                              Ratio Analysis                                                                       10
                                               Annual                                                              10
                                               Quarterly                                                           11

                              TTM Analysis                                                                         11

                              Valuation and Projection                                                             12
         CONTENT              Technical Analysis                                                                   13




                                                 About Sri Krishna Consulting
                   We provide financial research and analytics services to our worldwide client. Our research is customized and 
                   proprietary to our clients and often provided in client formats and templates. Our expert team of analyst add 
                   crucial values to client proprietary methodology and add efficiencies.
                   We have four areas of practice:
                   ‐‐Equity Research
                   ‐‐Credit Research
                   ‐‐Commodities Research
                   ‐‐Consultancy and Strategy.
                   With a zeal to perform, we adopt best quality driven process and approaches. Our quality driven process and 
                   approaches have already give us a place as a top‐tire provider of Financial Research and Analytics.

                   Financial Research Team
                   We have a robust investment research team with expertise in the financial domain. These professionals 
                   include CFAs, CAs and MBAs specializing in finance, with expertise in investment and retail banking, equity 
                   research, financial and sectoral analysis, etc. Our delivery teams are the core of our business, and we maintain 
                   their exceptional quality by selecting personnel on the basis of educational and functional experience. Our HR 
                   teams are always searching for outstanding performers.




                                                    Contact Us: info@srikrishnaconsulting.com




                                       © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com
Page 2
Summary
Latest Results                                                                                                                    At a glance
                                 Annual                          Quarterly                                  TTM                   Business Summary
                                                   % Change                          % Change                         % Change
                               6/30/2011                          2012 Q3                                 2012 Q3
             Sales                69943.00          11.94        17407.00             (16.65)            73031.00       1.36
            EBITDA                30595.00          13.47        7054.00               (0.20)            30848.00       1.37      Microsoft develops, manufactures, licenses, and supports a 
         Adjusted PAT             23150.00          23.40         5108.00              (0.23)            23344.00      (0.53)         wide range of software products for a multitude of 
         Reported PAT             23150.00          23.40        5108.00               (0.23)            23344.00      (0.53)                        computing devices.
              EPS                     2.73          27.65          0.60                (0.23)              2.75        (0.91)

                                                                                                                                  Industry                              Application Software
Valuation Data                                                                                                                    Latest 10 K filing                              6/30/2011
                                                                                                                                  Latest 10 Q Filing                              3/31/2012
                                          Company                                               Industry                          Next Report Date                                7/19/2012
          P/E(TTM)                         10.35                                                 19.72                            No. of Employee                                    90,000
                                                                                                                                  No. Equity Share 
         P/E(Forward)                      10.46                                                  NA                                                                                   9742
                                                                                                                                  (Million)
         PEG Ratio                         1.18                                                   NA                              Price                                               28.45
        Price/Sales                        3.27                                                  2.80                             Market Cap (Million)                             277159.9
     Dividend Yield(%)                     2.81                                                  2.65                             Total Debt                                      22233.00
        Price/Book                         3.48                                                  3.81                             Enterprise Value                                 292371.9
   Price/Free Cash Flow                    11.11                                                 13.69
   Price/Enterprise Value                  0.95                                                   NA                              Market Data
                                                                                                                                  Exchange Traded                                   NASDAQ
                                                                                                                                  Ticker                                              MSFT
ROE Analysis                                                                                                                      52 Week High                                         32.95
                                                                                                                                  52 Week Low                                          23.65
        Particulars               2007              2008              2009             2010                 2011                  Short Interest Ratio                                  1.76
    Reported PAT / PBT            0.70              0.74              0.74             0.75                 0.82                  Beta                                                     1
   Normalized PAT / PBT           0.70              0.74              0.72             0.75                 0.82                  Average Target Price                                  35.5
         PBT / PBIT               1.00              1.00              1.00             0.99                 0.99                  One Year Return                                      19.01
        PBIT / Sales              0.39              0.39              0.34             0.40                 0.41                  Three Months Return                                 ‐11.07
    Sales / Total Assets          1.30              1.41              1.15             1.04                 0.88                  One Month Return                                     ‐8.17
    Total Assets / Net 
  Worth(Without Treasury                                                                                                                         Analyst Rating
          Stock)                 126.75            118.25         128.56              129.87               140.02
 Reported ROE (Excluding 
      Treasury Stock)            45.23              48.73             36.83           40.63                40.55
 Normalized ROE(Excluding                                                                                                                           Strong 
      Treasury Stock)            45.23              48.73             35.84           40.77                40.55                                     Buy 
  Reported ROE (Including                                                                                                                             15
      Treasury Stock)              NA                NA                NA               NA                  NA                                                Hold 
 Normalized ROE(Including                                                                                                                                      8
      Treasury Stock)              NA                NA                NA               NA                  NA




                                                        ROE

                                                                                                                                   65.42
                             48.73 
          45.23 
                                                                            40.77                  40.55 
                                                    35.84                                                                                             Ownership (%)



                                                                                                                                                  21.5
                                                                                                                                                                              13.81

                   0.00               0.00                    0.00                   0.00                     0.00                                              1.49

              2007               2008                   2009                    2010                     2011                    Institutional  Top 10     Mutual Fund  5%/Insider 
                                                                                                                                  Ownership  Institutions  Ownership  Ownership 
                                                                                                                                      (%)         (%)         (%)          (%) 
               Normalized ROE(Excluding Treasury Stock)         Normalized ROE(Including Treasury Stock)




                                                                            © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com
Page 3
Income Statement
  Particulars (in Millions)               2007            2008           2009             2010              2011

            Sales                  51122.00           60420.00       58437.00       62484.00         69943.00
                                                                                                                                              Operating Income
     cost of goods sold                9493.00        10198.00       10455.00       10595.00         13348.00                                                                 35000.00 
                                                                                                                                                                    69,943
                                                                                                                                          60,420 58,437    62,484             30000.00 
        Gross profit               41629.00           50222.00       47982.00       51889.00         56595.00
    General selling and                                                                                                          51,122                                       25000.00 
  administrative expenses          14870.00           18387.00       16541.00       17067.00         17867.00
 Research and development                                                                                                                                                     20000.00 
         expenses                      7121.00         8164.00        9010.00        8714.00          9043.00
      other operating                                                                                                                                                         15000.00 
    income/(Expenses)                  1667.00         1686.00        (816.00)        842.00              941.00
                                                                                                                                                                              10000.00 
      Operating profit             21305.00           25357.00       21615.00       26950.00         30626.00                                                                 5000.00 
   Other non‐operating 
    income/(expenses)                    (4.00)        (143.00)        (56.00)           14.00            (31.00)                                                             0.00 
                                                                                                                                  2007    2008     2009     2010    2011
           EBITDA                  21301.00           25214.00       21559.00       26964.00         30595.00

         Depreciation                  1200.00         1400.00        1700.00        1800.00          2229.00

            EBIT                   20101.00           23814.00       19859.00       25164.00         28366.00                        Operating profit          EBITDA           Sales

     Interest expenses                    0.00            0.00          38.00         151.00              295.00

             EBT                   20101.00           23814.00       19821.00       25013.00         28071.00

             Tax                       6036.00         6133.00        5252.00        6253.00          4921.00
                                                                                                                                   Financial Data Mining
             EAT                   14065.00           17681.00       14569.00       18760.00         23150.00

   Non recurring income                   0.00            0.00           0.00             0.00              0.00                         Get a Free Quote
     Reported profit               14065.00           17681.00       14569.00       18760.00         23150.00
     Minority Interest                     0                  0              0              0                0




                                                                                 Profit Levels




                    2007                              2008                           2009                                  2010                              2011

                        Gross profit              Operating profit              EBITDA             EBIT              EBT             EAT             Reported profit


                                                                                Profit Margins

      2011                       80.92                               43.79                   43.74                    40.56                      40.13               33.10 
      2010                        83.04                                43.13                     43.15                 40.27                      40.03               30.02 
      2009                             82.11                               36.99                   36.89                    33.98                  33.92               24.93 
      2008                        83.12                                41.97                     41.73                 39.41                      39.41               29.26 
      2007                        81.43                                41.67                     41.67                 39.32                      39.32                27.51 

                                                  Gross profit       Operating profit        EBITDA           EBIT         EBT       EAT




                                                                         © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com
Page 4
Balance Sheet
   Particulars (in Millions)           2007         2008         2009            2010              2011
      Sources of Fund
        Owners Fund
                                                                                                                           Sources of Fund

 Redeemable Preferred Stock            0.00         0.00         0.00            0.00              0.00
    Preferred Stock ‐ Non 
      Redeemable, Net                  0.00         0.00         0.00            0.00              0.00
       Common Stock               60557.00      62849.00    62382.00        62856.00           63415.00
  Additional Paid‐In Capital           0.00         0.00         0.00            0.00              0.00
     Retained Earnings 
   (Accumulated Deficit)         (31114.00)    (27703.00)   (23793.00)      (17736.00)         (8195.00)
  Treasury Stock ‐ Common              0.00         0.00         0.00            0.00              0.00
    ESOP Debt Guarantee                0.00         0.00         0.00            0.00              0.00
    Unrealized Gain (Loss)             0.00         0.00       939.00        1231.00            1658.00

     Other Equity, Total           1654.00       1140.00        30.00         (176.00)           205.00
         Total Equity            31097.00       36286.00    39558.00        46175.00           57083.00

          Loan Fund
      Long Term Debt                   0.00         0.00      3746.00        4939.00           11921.00

  Capital Lease Obligations            0.00         0.00         0.00            0.00              0.00        2007      2008      2009      2010      2011
    Deferred Income Tax                0.00         0.00         0.00         229.00            1456.00
                                                                                                                     Total Equity           Total Loan Fund
      Minority Interest                0.00         0.00         0.00            0.00              0.00

   Other Liabilities, Total       8320.00        6621.00     7550.00         8623.00            9470.00
     Total Loan Fund              8320.00        6621.00    11296.00        13791.00           22847.00
        Total Fund               39417.00       42907.00    50854.00        59966.00           79930.00
                                                                                                                         Application of Funds
         Uses of funds
         Fixed Assets
 Property/Plant/Equipment, 
         Total ‐ Net               4350.00       6242.00     7535.00         7630.00            8162.00
       Goodwill, Net               4760.00      12108.00    12503.00        12394.00           12581.00
      Intangibles, Net              878.00       1973.00     1759.00         1158.00             744.00
   Long Term Investments          10117.00       6588.00     4933.00         7754.00           10865.00

 Note Receivable ‐ Long Term           0.00         0.00         0.00            0.00              0.00


Other Long Term Assets, Total     2898.00        2640.00     1878.00         1501.00            1434.00
     Other Assets, Total             0.00           0.00        0.00            0.00               0.00        2007       2008       2009       2010       2011
     Total Fixed Assets          23003.00       29551.00    28608.00        30437.00           33786.00
     Net Current Assets                                                                                                      Total Fixed Assets
     Total Current Assets         40168.00      43242.00    49280.00        55676.00           74918.00
                                                                                                                             Total Net Current Assets
   Total Current Liabilities      23754.00      29886.00    27034.00        26147.00           28774.00
  Total Net Current Assets       16414.00       13356.00    22246.00        29529.00           46144.00
        Total Assets             39417.00       42907.00    50854.00        59966.00           79930.00



                                            % of Total Fund
                                84.57 
              78.89                              77.79           77.00 
                                                                                     71.42 
                                                                                                                      Financial Data Mining
                                                                                     28.58 
              21.11                              22.21           23.00 
                                15.43                                                                                     Get a Free Quote

               2007             2008             2009            2010                   2011

                                   Total Loan Fund           Total Equity




                                                                © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com
Page 5
Cash flow Statement
   Particulars (in Millions)           2007            2008            2009           2010           2011

                                                                                                                                        Cash Flow
Cash from Operating Activities     17796.00        21612.00        19037.00      24073.00        26994.00

Cash from Investing Activities      6089.00        (4587.00)      (15770.00)    (11314.00)      (14616.00)

Cash from Financing Activities    (24544.00)   (12934.00)          (7463.00)    (13291.00)       (8376.00)
  Foreign Exchange Effects            56.00       137.00             (67.00)       (39.00)         103.00
     Net Change in Cash             (603.00)     4228.00           (4263.00)      (571.00)        4105.00
                                                                                                                     2007       2008        2009       2010        2011

Net Cash ‐ Beginning Balance           6714            6111           10339           6076           5505
 Net Cash ‐ Ending Balance             6111           10339            6076           5505           9610
                                                                                                                              Cash from Operating Activities
                                                                                                                              Cash from Investing Activities
                       Quarterly Income Statement                                                                             Cash from Financing Activities

   Particulars (in Millions) 2011 Q3       2011 Q4       2012 Q1       2012 Q2       2012 Q3
            Sales                 16428.00     17367.00      17372.00       20885.00      17407.00
     cost of goods sold            3369.00       3144.00       3189.00       5143.00       3356.00
         Gross profit             13059.00     14223.00      14183.00      15742.00      14051.00
     General selling and 
  administrative expenses          4469.00       5001.00       3969.00       4787.00       4469.00
 Research and development 
          expenses
       other operating 
                                   2269.00       2393.00       2329.00       2371.00       2517.00
                                                                                                                            Financial Data Mining
     income/(Expenses)              309.00          148.00           107.00        195.00            9.00
       Operating profit            6630.00         6977.00          7992.00       8779.00         7074.00
    Other non‐operating                                                                                                        Get a Free Quote
     income/(expenses)                7.00            0.00            (4.00)        50.00          (20.00)
           EBITDA                  6637.00         6977.00          7988.00       8829.00         7054.00
         Depreciation               528.00          564.00           588.00        495.00          596.00
             EBIT                  6109.00         6413.00          7400.00       8334.00         6458.00
      Interest expenses              84.00           94.00            94.00         95.00           95.00
             EBT                   6025.00         6319.00          7306.00       8239.00         6363.00
             Tax                    793.00          445.00          1568.00       1615.00         1255.00
             EAT                   5232.00         5874.00          5738.00       6624.00         5108.00
    Non recurring income              0.00            0.00             0.00          0.00            0.00
       Reported profit             5232.00         5874.00          5738.00       6624.00         5108.00
      Minority Interest                   0               0                0             0               0




                                                         Sales and Profit Margin




                  2011 Q3                 2011 Q4                     2012 Q1                   2012 Q2                     2012 Q3

                                           Sales               Operating Profit Margin             PAT Margin




                                                                      © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com
Page 6
Growth Analysis
                                                                                                    Average         Median 
      Particulars (%)              2008           2009              2010            2011                                                  5 Year CAGR
                                                                                                    Growth          Growth
            Sales                     18.19              (3.28)          6.93          11.94              8.44           9.43                1.06
     cost of goods sold                7.43               2.52           1.34          25.98              9.32           4.97                1.07
        Gross profit                  20.64              (4.46)          8.14           9.07              8.35           8.61                1.06

    General selling and 
  administrative expenses             23.65          (10.04)               3.18            4.69             5.37           3.93              1.04
 Research and development 
         expenses                     14.65          10.36               (3.29)            3.78             6.37           7.07              1.05
      other operating 
    income/(Expenses)                  1.14         (148.40)         (203.19)          11.76            (84.67)           (73.63)            0.89
      Operating profit                19.02          (14.76)           24.68           13.64             10.65             16.33             1.08

   Other non‐operating 
    income/(expenses)               3475.00          (60.84)         (125.00)         (321.43)         741.93             (92.92)            1.51
          EBITDA                      18.37          (14.50)           25.07            13.47           10.60              15.92             1.08
        Depreciation                  16.67           21.43             5.88            23.83           16.95              19.05             1.13
            EBIT                      18.47          (16.61)           26.71            12.72           10.33              15.60             1.07
     Interest expenses                 0.00            0.00           297.37            95.36           98.18              47.68             0.00
            EBT                       18.47          (16.77)           26.19            12.23           10.03              15.35             1.07
            Tax                        1.61          (14.36)           19.06           (21.30)          (3.75)             (6.38)            0.96
            EAT                       25.71          (17.60)           28.77            23.40           15.07              24.56             1.10
   Non recurring income                0.00            0.00             0.00             0.00            0.00               0.00             0.00
      Reported profit                 25.71          (17.60)           28.77            23.40           15.07              24.56             1.10
     Minority Interest                 0.00            0.00             0.00             0.00            0.00               0.00             0.00




                                                                  Growth Rates (Year on Year)




                            2008                                  2009                                     2010                                  2011



                        Sales      Gross profit            Operating profit           EBITDA            EBIT         EBT            EAT        Reported profit




                                                                     Profit Index (Year on Year)




                          2007                       2008                             2009                            2010                              2011

                           Sales          Gross profit            Operating profit                EBITDA           EBIT             EAT        Reported profit




                                                                         © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com
Page 7
Comparative Analysis
                                Income Statement
       Particulars (%)               2007      2008      2009          2010            2011
             Sales                 100.00    100.00    100.00        100.00          100.00
      cost of goods sold            18.57     16.88     17.89         16.96           19.08
         Gross profit               81.43     83.12     82.11         83.04           80.92
     General selling and 
   administrative expenses          29.09     30.43     28.31         27.31           25.55

 Research and development 
         expenses                   13.93     13.51     15.42         13.95           12.93
       other operating 
     income/(Expenses)               3.26      2.79     (1.40)         1.35            1.35                     Source of Fund (%) 2011
       Operating profit             41.67     41.97     36.99         43.13           43.79
    Other non‐operating 
     income/(expenses)              (0.01)    (0.24)    (0.10)         0.02           (0.04)
           EBITDA                   41.67     41.73     36.89         43.15           43.74                          29%
         Depreciation                2.35      2.32      2.91          2.88            3.19
             EBIT                   39.32     39.41     33.98         40.27           40.56
      Interest expenses              0.00      0.00      0.07          0.24            0.42
             EBT                    39.32     39.41     33.92         40.03           40.13
             Tax                    11.81     10.15      8.99         10.01            7.04                                              71%
             EAT                    27.51     29.26     24.93         30.02           33.10
    Non recurring income             0.00      0.00      0.00          0.00            0.00
       Reported profit              27.51     29.26     24.93         30.02           33.10
      Minority Interest              0.00      0.00      0.00          0.00            0.00
                                                                                                                 Total Equity         Total Loan Fund

                                  Balance Sheet
        Particulars                  2007      2008      2009           2010           2011
      Sources of Fund
       Owners Fund

 Redeemable Preferred Stock          0.00      0.00      0.00           0.00           0.00
    Preferred Stock ‐ Non 
      Redeemable, Net                0.00      0.00      0.00          0.00            0.00
       Common Stock                153.63    146.48    122.67        104.82           79.34
  Additional Paid‐In Capital         0.00      0.00      0.00          0.00            0.00
      Retained Earnings            (78.94)   (64.57)   (46.79)       (29.58)         (10.25)                        Application of Fund (%) 
  Treasury Stock ‐ Common            0.00      0.00      0.00          0.00            0.00                                  2011
    ESOP Debt Guarantee              0.00      0.00      0.00          0.00            0.00
    Unrealized Gain (Loss)           0.00      0.00      1.85          2.05            2.07
     Other Equity, Total             4.20      2.66      0.06         (0.29)           0.26
        Total Equity
              0                     78.89     84.57     77.79         77.00           71.42
                                                                                                                                              42%
          Loan Fund
      Long Term Debt                 0.00      0.00      7.37          8.24           14.91
  Capital Lease Obligations          0.00      0.00      0.00          0.00            0.00                           58%
   Deferred Income Tax               0.00      0.00      0.00          0.38            1.82
     Minority Interest               0.00      0.00      0.00          0.00            0.00
   Other Liabilities, Total         21.11     15.43     14.85         14.38           11.85
      Total Loan Fund               21.11     15.43     22.21         23.00           28.58
         Total Fund                100.00    100.00    100.00        100.00          100.00
                                                                                                                   Total Fixed Assets
       Uses of funds
        Fixed Assets                                                                                               Total Net Current Assets
 Property/Plant/Equipment, 
         Total ‐ Net                11.04     14.55     14.82         12.72           10.21
       Goodwill, Net                12.08     28.22     24.59         20.67           15.74
      Intangibles, Net               2.23      4.60      3.46          1.93            0.93
   Long Term Investments            25.67     15.35      9.70         12.93           13.59

 Note Receivable ‐ Long Term         0.00      0.00      0.00           0.00           0.00                    Equity Research Report
Other Long Term Assets, Total        7.35      6.15      3.69          2.50            1.79
     Other Assets, Total             0.00      0.00      0.00          0.00            0.00
     Total Fixed Assets             58.36     68.87     56.26         50.76           42.27                          Get a Free Quote
     Net Current Assets
     Total Current Assets          101.91    100.78     96.90         92.85           93.73
   Total Current Liabilities        60.26     69.65     53.16         43.60           36.00
  Total Net Current Assets          41.64     31.13     43.74         49.24           57.73
        Total Assets               100.00    100.00    100.00        100.00          100.00



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Page 8
Index Analysis
                                Income Statement
          Particulars                   2007      2008      2009           2010           2011
                                (Base Year)
            Sales                     100.00    118.19    114.31         122.23         136.82
     cost of goods sold               100.00    107.43    110.13         111.61         140.61
        Gross profit                 100.00     120.64    115.26         124.65         135.95                     Credit/Bond Analysis
     General selling and              100.00    123.65    111.24         114.77         120.15
 Research and development             100.00    114.65    126.53         122.37         126.99
      other operating 
      Operating profit
                                      100.00
                                     100.00
                                                101.14
                                                119.02
                                                          (48.95)
                                                          101.46
                                                                          50.51
                                                                         126.50
                                                                                         56.45
                                                                                        143.75
                                                                                                                      Get a Free Quote
    Other non‐operating               100.00   3575.00   1400.00        (350.00)        775.00
          EBITDA                     100.00     118.37    101.21         126.59         143.63
        Depreciation                  100.00    116.67    141.67         150.00         185.75
            EBIT                     100.00     118.47     98.80         125.19         141.12
     Interest expenses                  0.00      0.00      0.00           0.00           0.00
            EBT                      100.00     118.47     98.61         124.44         139.65
             Tax                      100.00    101.61     87.01         103.60          81.53
            EAT                      100.00     125.71    103.58         133.38         164.59
   Non recurring income                 0.00      0.00      0.00           0.00           0.00
      Reported profit                100.00     125.71    103.58         133.38         164.59
      Minority Interest                 0.00      0.00      0.00           0.00           0.00



                                  Balance Sheet
          Particulars                  2007       2008      2009           2010           2011
       Sources of Fund
        Owners Fund
                                                                                                                 Index of Loan Fund and Fixed 
 Redeemable Preferred Stock            0.00       0.00      0.00          0.00            0.00                              Assets
    Preferred Stock ‐ Non              0.00       0.00      0.00          0.00            0.00
       Common Stock                  100.00     103.78    103.01        103.80          104.72
  Additional Paid‐In Capital           0.00       0.00      0.00          0.00            0.00
      Retained Earnings              100.00      89.04     76.47         57.00           26.34
  Treasury Stock ‐ Common              0.00       0.00      0.00          0.00            0.00
    ESOP Debt Guarantee                0.00       0.00      0.00          0.00            0.00
    Unrealized Gain (Loss)             0.00       0.00      0.00          0.00            0.00
     Other Equity, Total             100.00      68.92      1.81        (10.64)          12.39
         Total Equity                100.00     116.69    127.21        148.49          183.56

          Loan Fund
      Long Term Debt                   0.00       0.00      0.00          0.00            0.00               2007       2008       2009        2010       2011
  Capital Lease Obligations            0.00       0.00      0.00          0.00            0.00
   Deferred Income Tax                 0.00       0.00      0.00          0.00            0.00
     Minority Interest                 0.00       0.00      0.00          0.00            0.00                    Total Loan Fund            Total Fixed Assets
   Other Liabilities, Total          100.00      79.58     90.75        103.64          113.82
      Total Loan Fund                100.00      79.58    135.77        165.76          274.60
         Total Fund                  100.00     108.85    129.02        152.13          202.78

         Uses of funds
         Fixed Assets

 Property/Plant/Equipment, 
         Total ‐ Net                 100.00     143.49    173.22        175.40          187.63
       Goodwill, Net                 100.00     254.37    262.67        260.38          264.31
      Intangibles, Net               100.00     224.72    200.34        131.89           84.74
   Long Term Investments             100.00      65.12     48.76         76.64          107.39

 Note Receivable ‐ Long Term           0.00       0.00      0.00           0.00           0.00

Other Long Term Assets, Total        100.00      91.10     64.80         51.79           49.48
     Other Assets, Total               0.00       0.00      0.00          0.00            0.00
     Total Fixed Assets              100.00     128.47    124.37        132.32          146.88
     Net Current Assets
     Total Current Assets            100.00     107.65    122.68        138.61          186.51
   Total Current Liabilities         100.00     125.81    113.81        110.07          121.13
  Total Net Current Assets           100.00      81.37    135.53        179.90          281.13
        Total Assets                 100.00     108.85    129.02        152.13          202.78




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Page 9
Ratio Analysis‐Annual
          Particulars                 2007          2008          2009              2010            2011
                                     Per Share Ratio
      Normalized EPS                  1.44          1.90          1.59              2.14            2.73
          Basic EPS                   1.44          1.90          1.63              2.13            2.73
         Diluted EPS                  1.42          1.87          1.62              2.10            2.69
     Adjusted Cash EPS                1.57          2.05          1.82              2.33            2.99                                   EPS Trend
     Dividend Per Share               0.40          0.44          0.52              0.52            0.64
  Operating Profit per Share          2.19          2.72          2.42              3.06            3.61
    Book Value Per Share 
 (Excluding Treasury Stocks)          3.19          3.89          4.42              5.24            6.72

     Book Value Per Share 
  (Including Treasury Stocks)         3.19          3.89          4.42              5.24            6.72
  Net Operating Income Per 
             Share                   5.25           6.48          6.53              7.09           8.24
    Free Reserve Per Share           (3.19)         (2.97)        (2.66)            (2.01)         (0.97)


                                  Profitability Ratio (%)                                                                 2007      2008       2009       2010      2011
     Operating Margin                41.67          41.97         36.99            43.13           43.79
    Gross Profit margin              81.43          83.12         82.11            83.04           80.92
                                                                                                                               Normalized EPS            Basic EPS
     Net profit Margin               27.51          29.26         24.93            30.02           33.10
Normalized Net Profit Margin         27.51          29.26         24.26            30.13           33.10                       Diluted EPS
   Adjusted Cash Margin              29.86          31.58         27.84            32.90           36.29
    Effective Tax Rate               30.03          25.75         26.50            25.00           17.53
 Normalized Return on Net 
 Worth (Excluding Treasury 
          Stock)                     45.23          48.73         35.84            40.77           40.55

Reported Return on Net Worth 
  (Excluding Treasury Stock)         45.23          48.73         36.83            40.63           40.55                              Debt‐Equity Ratio
  Return on Long Term Fund           35.68          41.21         28.65            31.28           28.96


                                     Leverage Ratio
   Long term Debt/Equity                     0.00          0.00          0.09              0.11            0.21
     Total Debt/Equity                       0.27          0.18          0.29              0.30            0.40
  Owned Fund as % of Total 
           Fund                          78.89          84.57         77.79             77.00          71.42

 Fixed Assets Turnover Ratio                 2.22          2.04          2.04              2.05            2.07


                                     Liquidity Ratio                                                                      2007       2008       2009      2010       2011
         Current Ratio                       1.69          1.45          1.82              2.13            2.60
  Current Ratio (Including St. 
            Loans)                        1.69           1.45          1.82              2.13           2.60
                                                                                                                                         Long term Debt/Equity
         Quick Ratio                      1.64           1.41          1.80              2.10           2.56                             Total Debt/Equity
   Inventory Turnover Ratio              45.36          57.22         68.67             85.77          66.23


                                    Payout Ratio(%)
    Dividend Payout Ratio                27.36          23.10         31.71             24.24          23.30
 Dividend Pay out Ratio (Cash                                                                                                            Liquidity Ratio
           Profit)                       25.21          21.40         28.40             22.12          21.25
   Earning Retention Ratio               72.64          76.90         68.29             75.76          76.70

 Cash Earning Retention Ratio            74.79          78.60         71.60             77.88          78.75


                                     Coverage Ratio
Adjusted Cash flow Time Total 
            Debt                             2.14          3.26          1.69              1.75            1.18
 Financial Charges Coverage                                                                                                 2007      2008       2009       2010      2011
       Ratio (Pre Tax)                        NA             NA     522.61            166.65           96.16
 Financial Charges Coverage 
                                                                                                                                   Current Ratio
       Ratio (Post Tax)                       NA             NA     384.39            125.24           79.47
                                                                                                                                   Current Ratio (Including St. Loans)
                                                                                                                                   Quick Ratio




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Page 10
Ratio Analysis‐Quarter
                                   Per Share Ratio                                                                             Per Share Ratio (QoQ)
        Particulars               2011 Q3         2011 Q4       2012 Q1        2012 Q2          2012 Q3
    Operating Income Per 
         Share(Rs.)                     1.93           2.04           2.05           2.47               2.05

Operating Profit Per Share(Rs.)
                                        0.78           0.82           0.94           1.04               0.83
      Adjusted EPS(Rs.)                 0.61           0.69           0.68           0.78               0.60


                                  Profitability Ratio
   Operating Profit Margin            40.36           40.17         46.01           42.03              40.64
      EBITDA Margin                   40.40           40.17         45.98           42.27              40.52          2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3
        EBIT Margin                   37.19           36.93         42.60           39.90              37.10
        PAT Margin                    31.85           33.82         33.03           31.72              29.34
                                                                                                                               Operating Income Per Share(Rs.)
                                                                                                                               Operating Profit Per Share(Rs.)
                                                                                                                               Adjusted EPS(Rs.)
                                      TTM Analysis
   Particulars (in Millions)      2012 Q2      % of Sales       2012 Q3        % of Sales       Changes
            Sales                  72052.00         100.00       73031.00           100.00            1.36
     cost of goods sold            14845.00          20.60       14832.00            20.31           (0.09)
         Gross profit              57207.00          79.40       58199.00            79.69            1.73
     General selling and           18226.00          25.30       18226.00            24.96            0.00
 Research and development 
       other operating 
                                    9362.00
                                     759.00
                                                     12.99
                                                      1.05
                                                                  9610.00
                                                                   459.00
                                                                                     13.16
                                                                                      0.63
                                                                                                      2.65
                                                                                                    (39.53)
                                                                                                                         Fundamental Analysis and 
      Operating profit
    Other non‐operating 
                                   30378.00
                                       53.00
                                                     42.16
                                                      0.07
                                                                 30822.00
                                                                     26.00
                                                                                     42.20
                                                                                      0.04
                                                                                                      1.46
                                                                                                    (50.94)
                                                                                                                               Modeling
           EBITDA                  30431.00          42.23       30848.00            42.24            1.37
        Depreciation                2175.00           3.02        2243.00             3.07            3.13
            EBIT                   28256.00          39.22       28605.00            39.17            1.24                      Get a Free Quote
     Interest expenses               367.00           0.51         378.00             0.52            3.00
             EBT                   27889.00          38.71       28227.00            38.65            1.21
             Tax                    4421.00           6.14        4883.00             6.69           10.45
             EAT                   23468.00          32.57       23344.00            31.96           (0.53)
    Non recurring income                0.00          0.00            0.00            0.00              NA
      Reported profit              23468.00          32.57       23344.00            31.96           (0.53)
      Minority Interest                 0.00          0.00            0.00            0.00              NA

             EPS                        2.77                         2.75                              (0.91)
             SPS                        8.51                         8.59                               0.97




                                                                             Profit Margins (TTM)


              2012 Q3                    79.69                       42.20                   42.24              39.17           38.65            31.96           31.96 



              2012 Q2                    79.40                       42.16               42.23                  39.22           38.71            32.57           32.57 



                                       Gross profit         Operating profit        EBITDA            EBIT      EBT      EAT      Reported profit




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Page 11
Valuation and Projection
                                     Price Estimates                                                                Analyst Recommendation
       Average Target                     35.50
       Median Target                      36.00
                                                                                                           Strong Buy       Buy      Hold     Underperform          Sell
        High Target                       40.00
         Low Target                       20.00                                                                                0% 2%
       No. of Analyst                     30.00


                                         Projection                                                                            30%          38%

                                  Quarter        Quarter       Year Ending  Year Ending 
                                  Ending Jun‐12 Ending Sep‐12 Jun‐12         Jun‐13                                                 30%
            Sales                      18698.80      18456.60       74290.40      80645.30
             EPS                            0.66          0.71          2.72          3.05
           Growth                           7.67          6.24          6.22          8.55


                           Performance Over Industry
         Particulars                       Company                       Industry
                                                                                                                             Earning Surprise
       Dividend Yield                        2.81                          2.65
 Dividend Yield ‐ 5 Year Avg.                1.94                          2.04                               19%

Dividend 5 Year Growth Rate                  12.83                        4.96
     Payout Ratio(TTM)                       27.36                        73.24
     Quick Ratio (MRQ)                       2.88                         1.77
    Current Ratio (MRQ)                      2.94                         2.08
  LT Debt to Equity (MRQ)                    17.39                        10.08
 Total Debt to Equity (MRQ)                  17.39                        13.61
  Interest Coverage (TTM)                      ‐‐                         4.43                                                                  3%               3%
     Gross Margin (TTM)                      76.62                        65.56
  Gross Margin ‐ 5 Yr. Avg.                  79.36                        67.6                                                 0%
    EBITD Margin (TTM)                       41.9                           ‐‐
      EBITD ‐ 5 Yr. Avg                      41.05                        30.91                               Q1               Q2               Q3              Q4
  Operating Margin (TTM)                     37.99                        26.15


Operating Margin ‐ 5 Yr. Avg.                37.45                        26.08
   Pre‐Tax Margin (TTM)                      38.65                        25.63
 Pre‐Tax Margin ‐ 5 Yr. Avg.                 38.63                        26.43
  Net Profit Margin (TTM)                    31.96                        17.65


Net Profit Margin ‐ 5 Yr. Avg.               29.17                        17.62

  Effective Tax Rate (TTM)                    17.3                        30.48

Effective Tax Rate ‐ 5 Yr. Avg.              24.48                        38.29                                      Excel‐VBA Based Model
 Revenue/Employee (TTM)                       NA                           NA                                           Get a Free Quote
Net Income/Employee (TTM)                     NA                           NA

 Receivable Turnover (TTM)                    NA                           NA

  Inventory Turnover (TTM)                    NA                           NA

    Asset Turnover (TTM)                      NA                           NA

   Return on Assets (TTM)                     NA                           NA

 Return on Assets ‐ 5 Yr. Avg.                NA                           NA


Return on Investment (TTM)                    NA                           NA
Return on Investment ‐ 5 Yr. 
            Avg.                              NA                           NA

   Return on Equity (TTM)                     NA                           NA


 Return on Equity ‐ 5 Yr. Avg.                NA                           NA




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Page 12
Technical Analysis

                                                                      Price Chart
          35                                                                                                                                     18000000

          30                                                                                                                                     16000000
                                                                                                                                                 14000000
          25
                                                                                                                                                 12000000
          20                                                                                                                                     10000000
          15                                                                                                                                     80000000
                                                                                                                                                 60000000
          10
                                                                                                                                                 40000000
          5                                                                                                                                      20000000
          0                                                                                                                                      0
           22‐Nov                                                1‐Feb                                                          16‐Apr

                                               Volume             Adj Close             EMA(200)     EMA(50)



                1.50
                1.00
                0.50
                0.00
               ‐0.50
               ‐1.00


                                                                   MACD             Signal line




                100
                 80
                 60
                 40
                 20
                  0


                                                                              RSI(14)




                                          Technical Indicators

                       Price          28.45                 AS On:                  6/1/2012

                       EMA(13)        29.89                 ADX                             19

                       EMA(26)        30.35                 DX                              46
                                                                                                                 Technical Analysis
                                                                                                                 Get a Free Quote
                       EMA(50)        29.96                 +DI                             12

                       EMA(200)       27.31                 ‐DI                             33

                       RSI(14)        26.40                 %K(Fast)                         0

                       MACD            ‐0.47                %K(Slow)                       7.19

                       William(%R)   ‐100.00                %d(Slow)                      12.28




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Microsoft inc

  • 1. SRI KRISHNA CONSULTING COMPANY FINALYTICS Microsoft Corp  Exclusive Fundamental Analysis of US Stocks Prepared and Edited By‐ SRI KRISHNA CONSULTING Download more reports from http://www.srikrishnaconsulting.com Disclaimer  The information, opinions, estimates and forecasts contained in this document have been arrived at or obtained from public sources believed to be  reliable and in good faith which has not been independently verified and no warranty, express or implied, is made as to their accuracy, completeness or  correctness.  For more information about this sample and our other services, please write to info@srikrishnaconsulting.com Monday, June 04, 2012
  • 2. Description Page Summary 3 Latest Result 3 Valuation Matrix 3 ROE Analysis 3 Income Statement 4 Balance Sheet 5 Cash flow Statement 6 Quarterly Result 6 Growth Analysis 7 Comparative Analysis 8 Income Statement 8 Balance Sheet 8 Index Analysis 9 Income Statement 9 Balance Sheet 9 Ratio Analysis 10 Annual 10 Quarterly 11 TTM Analysis 11 Valuation and Projection 12 CONTENT Technical Analysis 13 About Sri Krishna Consulting We provide financial research and analytics services to our worldwide client. Our research is customized and  proprietary to our clients and often provided in client formats and templates. Our expert team of analyst add  crucial values to client proprietary methodology and add efficiencies. We have four areas of practice: ‐‐Equity Research ‐‐Credit Research ‐‐Commodities Research ‐‐Consultancy and Strategy. With a zeal to perform, we adopt best quality driven process and approaches. Our quality driven process and  approaches have already give us a place as a top‐tire provider of Financial Research and Analytics. Financial Research Team We have a robust investment research team with expertise in the financial domain. These professionals  include CFAs, CAs and MBAs specializing in finance, with expertise in investment and retail banking, equity  research, financial and sectoral analysis, etc. Our delivery teams are the core of our business, and we maintain  their exceptional quality by selecting personnel on the basis of educational and functional experience. Our HR  teams are always searching for outstanding performers. Contact Us: info@srikrishnaconsulting.com © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 2
  • 3. Summary Latest Results At a glance Annual Quarterly TTM Business Summary % Change % Change % Change 6/30/2011 2012 Q3 2012 Q3 Sales 69943.00 11.94 17407.00 (16.65) 73031.00 1.36 EBITDA 30595.00 13.47 7054.00 (0.20) 30848.00 1.37 Microsoft develops, manufactures, licenses, and supports a  Adjusted PAT 23150.00 23.40 5108.00 (0.23) 23344.00 (0.53) wide range of software products for a multitude of  Reported PAT 23150.00 23.40 5108.00 (0.23) 23344.00 (0.53) computing devices. EPS 2.73 27.65 0.60 (0.23) 2.75 (0.91) Industry Application Software Valuation Data Latest 10 K filing 6/30/2011 Latest 10 Q Filing 3/31/2012 Company Industry Next Report Date 7/19/2012 P/E(TTM) 10.35 19.72 No. of Employee 90,000 No. Equity Share  P/E(Forward) 10.46 NA 9742 (Million) PEG Ratio 1.18 NA Price 28.45 Price/Sales 3.27 2.80 Market Cap (Million) 277159.9 Dividend Yield(%) 2.81 2.65 Total Debt 22233.00 Price/Book 3.48 3.81 Enterprise Value 292371.9 Price/Free Cash Flow 11.11 13.69 Price/Enterprise Value 0.95 NA Market Data Exchange Traded NASDAQ Ticker MSFT ROE Analysis 52 Week High 32.95 52 Week Low 23.65 Particulars 2007 2008 2009 2010 2011 Short Interest Ratio 1.76 Reported PAT / PBT 0.70 0.74 0.74 0.75 0.82 Beta 1 Normalized PAT / PBT 0.70 0.74 0.72 0.75 0.82 Average Target Price 35.5 PBT / PBIT 1.00 1.00 1.00 0.99 0.99 One Year Return 19.01 PBIT / Sales 0.39 0.39 0.34 0.40 0.41 Three Months Return ‐11.07 Sales / Total Assets 1.30 1.41 1.15 1.04 0.88 One Month Return ‐8.17 Total Assets / Net  Worth(Without Treasury  Analyst Rating Stock) 126.75 118.25 128.56 129.87 140.02 Reported ROE (Excluding  Treasury Stock) 45.23 48.73 36.83 40.63 40.55 Normalized ROE(Excluding  Strong  Treasury Stock) 45.23 48.73 35.84 40.77 40.55 Buy  Reported ROE (Including  15 Treasury Stock) NA NA NA NA NA Hold  Normalized ROE(Including  8 Treasury Stock) NA NA NA NA NA ROE 65.42 48.73  45.23  40.77  40.55  35.84  Ownership (%) 21.5 13.81 0.00  0.00  0.00  0.00  0.00  1.49 2007 2008 2009 2010 2011 Institutional  Top 10  Mutual Fund  5%/Insider  Ownership  Institutions  Ownership  Ownership  (%)  (%)  (%)  (%)  Normalized ROE(Excluding Treasury Stock) Normalized ROE(Including Treasury Stock) © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 3
  • 4. Income Statement Particulars (in Millions) 2007 2008 2009 2010 2011 Sales 51122.00 60420.00 58437.00 62484.00 69943.00 Operating Income cost of goods sold 9493.00 10198.00 10455.00 10595.00 13348.00 35000.00  69,943 60,420 58,437 62,484 30000.00  Gross profit 41629.00 50222.00 47982.00 51889.00 56595.00 General selling and  51,122 25000.00  administrative expenses 14870.00 18387.00 16541.00 17067.00 17867.00 Research and development  20000.00  expenses 7121.00 8164.00 9010.00 8714.00 9043.00 other operating  15000.00  income/(Expenses) 1667.00 1686.00 (816.00) 842.00 941.00 10000.00  Operating profit 21305.00 25357.00 21615.00 26950.00 30626.00 5000.00  Other non‐operating  income/(expenses) (4.00) (143.00) (56.00) 14.00 (31.00) 0.00  2007 2008 2009 2010 2011 EBITDA 21301.00 25214.00 21559.00 26964.00 30595.00 Depreciation 1200.00 1400.00 1700.00 1800.00 2229.00 EBIT 20101.00 23814.00 19859.00 25164.00 28366.00 Operating profit EBITDA Sales Interest expenses 0.00 0.00 38.00 151.00 295.00 EBT 20101.00 23814.00 19821.00 25013.00 28071.00 Tax 6036.00 6133.00 5252.00 6253.00 4921.00 Financial Data Mining EAT 14065.00 17681.00 14569.00 18760.00 23150.00 Non recurring income  0.00 0.00 0.00 0.00 0.00 Get a Free Quote Reported profit 14065.00 17681.00 14569.00 18760.00 23150.00 Minority Interest 0 0 0 0 0 Profit Levels 2007 2008 2009 2010 2011 Gross profit Operating profit EBITDA EBIT EBT EAT Reported profit Profit Margins 2011 80.92  43.79  43.74  40.56  40.13  33.10  2010 83.04  43.13  43.15  40.27  40.03  30.02  2009 82.11  36.99  36.89  33.98  33.92  24.93  2008 83.12  41.97  41.73  39.41  39.41  29.26  2007 81.43  41.67  41.67  39.32  39.32  27.51  Gross profit Operating profit EBITDA EBIT EBT EAT © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 4
  • 5. Balance Sheet Particulars (in Millions) 2007 2008 2009 2010 2011 Sources of Fund Owners Fund Sources of Fund Redeemable Preferred Stock 0.00 0.00 0.00 0.00 0.00 Preferred Stock ‐ Non  Redeemable, Net 0.00 0.00 0.00 0.00 0.00 Common Stock 60557.00 62849.00 62382.00 62856.00 63415.00 Additional Paid‐In Capital 0.00 0.00 0.00 0.00 0.00 Retained Earnings  (Accumulated Deficit) (31114.00) (27703.00) (23793.00) (17736.00) (8195.00) Treasury Stock ‐ Common 0.00 0.00 0.00 0.00 0.00 ESOP Debt Guarantee 0.00 0.00 0.00 0.00 0.00 Unrealized Gain (Loss) 0.00 0.00 939.00 1231.00 1658.00 Other Equity, Total 1654.00 1140.00 30.00 (176.00) 205.00 Total Equity 31097.00 36286.00 39558.00 46175.00 57083.00 Loan Fund Long Term Debt 0.00 0.00 3746.00 4939.00 11921.00 Capital Lease Obligations 0.00 0.00 0.00 0.00 0.00 2007 2008 2009 2010 2011 Deferred Income Tax 0.00 0.00 0.00 229.00 1456.00 Total Equity Total Loan Fund Minority Interest 0.00 0.00 0.00 0.00 0.00 Other Liabilities, Total 8320.00 6621.00 7550.00 8623.00 9470.00 Total Loan Fund 8320.00 6621.00 11296.00 13791.00 22847.00 Total Fund 39417.00 42907.00 50854.00 59966.00 79930.00 Application of Funds Uses of funds Fixed Assets Property/Plant/Equipment,  Total ‐ Net 4350.00 6242.00 7535.00 7630.00 8162.00 Goodwill, Net 4760.00 12108.00 12503.00 12394.00 12581.00 Intangibles, Net 878.00 1973.00 1759.00 1158.00 744.00 Long Term Investments 10117.00 6588.00 4933.00 7754.00 10865.00 Note Receivable ‐ Long Term 0.00 0.00 0.00 0.00 0.00 Other Long Term Assets, Total 2898.00 2640.00 1878.00 1501.00 1434.00 Other Assets, Total 0.00 0.00 0.00 0.00 0.00 2007 2008 2009 2010 2011 Total Fixed Assets 23003.00 29551.00 28608.00 30437.00 33786.00 Net Current Assets Total Fixed Assets Total Current Assets 40168.00 43242.00 49280.00 55676.00 74918.00 Total Net Current Assets Total Current Liabilities 23754.00 29886.00 27034.00 26147.00 28774.00 Total Net Current Assets 16414.00 13356.00 22246.00 29529.00 46144.00 Total Assets 39417.00 42907.00 50854.00 59966.00 79930.00 % of Total Fund 84.57  78.89  77.79  77.00  71.42  Financial Data Mining 28.58  21.11  22.21  23.00  15.43  Get a Free Quote 2007 2008 2009 2010 2011 Total Loan Fund Total Equity © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 5
  • 6. Cash flow Statement Particulars (in Millions) 2007 2008 2009 2010 2011 Cash Flow Cash from Operating Activities 17796.00 21612.00 19037.00 24073.00 26994.00 Cash from Investing Activities 6089.00 (4587.00) (15770.00) (11314.00) (14616.00) Cash from Financing Activities (24544.00) (12934.00) (7463.00) (13291.00) (8376.00) Foreign Exchange Effects 56.00 137.00 (67.00) (39.00) 103.00 Net Change in Cash (603.00) 4228.00 (4263.00) (571.00) 4105.00 2007 2008 2009 2010 2011 Net Cash ‐ Beginning Balance 6714 6111 10339 6076 5505 Net Cash ‐ Ending Balance 6111 10339 6076 5505 9610 Cash from Operating Activities Cash from Investing Activities Quarterly Income Statement Cash from Financing Activities Particulars (in Millions) 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 Sales 16428.00 17367.00 17372.00 20885.00 17407.00 cost of goods sold 3369.00 3144.00 3189.00 5143.00 3356.00 Gross profit 13059.00 14223.00 14183.00 15742.00 14051.00 General selling and  administrative expenses 4469.00 5001.00 3969.00 4787.00 4469.00 Research and development  expenses other operating  2269.00 2393.00 2329.00 2371.00 2517.00 Financial Data Mining income/(Expenses) 309.00 148.00 107.00 195.00 9.00 Operating profit 6630.00 6977.00 7992.00 8779.00 7074.00 Other non‐operating  Get a Free Quote income/(expenses) 7.00 0.00 (4.00) 50.00 (20.00) EBITDA 6637.00 6977.00 7988.00 8829.00 7054.00 Depreciation 528.00 564.00 588.00 495.00 596.00 EBIT 6109.00 6413.00 7400.00 8334.00 6458.00 Interest expenses 84.00 94.00 94.00 95.00 95.00 EBT 6025.00 6319.00 7306.00 8239.00 6363.00 Tax 793.00 445.00 1568.00 1615.00 1255.00 EAT 5232.00 5874.00 5738.00 6624.00 5108.00 Non recurring income  0.00 0.00 0.00 0.00 0.00 Reported profit 5232.00 5874.00 5738.00 6624.00 5108.00 Minority Interest 0 0 0 0 0 Sales and Profit Margin 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 Sales Operating Profit Margin PAT Margin © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 6
  • 7. Growth Analysis Average  Median  Particulars (%) 2008 2009 2010 2011 5 Year CAGR Growth Growth Sales 18.19 (3.28) 6.93 11.94 8.44 9.43 1.06 cost of goods sold 7.43 2.52 1.34 25.98 9.32 4.97 1.07 Gross profit 20.64 (4.46) 8.14 9.07 8.35 8.61 1.06 General selling and  administrative expenses 23.65 (10.04) 3.18 4.69 5.37 3.93 1.04 Research and development  expenses 14.65 10.36 (3.29) 3.78 6.37 7.07 1.05 other operating  income/(Expenses) 1.14 (148.40) (203.19) 11.76 (84.67) (73.63) 0.89 Operating profit 19.02 (14.76) 24.68 13.64 10.65 16.33 1.08 Other non‐operating  income/(expenses) 3475.00 (60.84) (125.00) (321.43) 741.93 (92.92) 1.51 EBITDA 18.37 (14.50) 25.07 13.47 10.60 15.92 1.08 Depreciation 16.67 21.43 5.88 23.83 16.95 19.05 1.13 EBIT 18.47 (16.61) 26.71 12.72 10.33 15.60 1.07 Interest expenses 0.00 0.00 297.37 95.36 98.18 47.68 0.00 EBT 18.47 (16.77) 26.19 12.23 10.03 15.35 1.07 Tax 1.61 (14.36) 19.06 (21.30) (3.75) (6.38) 0.96 EAT 25.71 (17.60) 28.77 23.40 15.07 24.56 1.10 Non recurring income  0.00 0.00 0.00 0.00 0.00 0.00 0.00 Reported profit 25.71 (17.60) 28.77 23.40 15.07 24.56 1.10 Minority Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Growth Rates (Year on Year) 2008 2009 2010 2011 Sales Gross profit Operating profit EBITDA EBIT EBT EAT Reported profit Profit Index (Year on Year) 2007 2008 2009 2010 2011 Sales Gross profit Operating profit EBITDA EBIT EAT Reported profit © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 7
  • 8. Comparative Analysis Income Statement Particulars (%) 2007 2008 2009 2010 2011 Sales 100.00 100.00 100.00 100.00 100.00 cost of goods sold 18.57 16.88 17.89 16.96 19.08 Gross profit 81.43 83.12 82.11 83.04 80.92 General selling and  administrative expenses 29.09 30.43 28.31 27.31 25.55 Research and development  expenses 13.93 13.51 15.42 13.95 12.93 other operating  income/(Expenses) 3.26 2.79 (1.40) 1.35 1.35 Source of Fund (%) 2011 Operating profit 41.67 41.97 36.99 43.13 43.79 Other non‐operating  income/(expenses) (0.01) (0.24) (0.10) 0.02 (0.04) EBITDA 41.67 41.73 36.89 43.15 43.74 29% Depreciation 2.35 2.32 2.91 2.88 3.19 EBIT 39.32 39.41 33.98 40.27 40.56 Interest expenses 0.00 0.00 0.07 0.24 0.42 EBT 39.32 39.41 33.92 40.03 40.13 Tax 11.81 10.15 8.99 10.01 7.04 71% EAT 27.51 29.26 24.93 30.02 33.10 Non recurring income  0.00 0.00 0.00 0.00 0.00 Reported profit 27.51 29.26 24.93 30.02 33.10 Minority Interest 0.00 0.00 0.00 0.00 0.00 Total Equity Total Loan Fund Balance Sheet Particulars 2007 2008 2009 2010 2011 Sources of Fund Owners Fund Redeemable Preferred Stock 0.00 0.00 0.00 0.00 0.00 Preferred Stock ‐ Non  Redeemable, Net 0.00 0.00 0.00 0.00 0.00 Common Stock 153.63 146.48 122.67 104.82 79.34 Additional Paid‐In Capital 0.00 0.00 0.00 0.00 0.00 Retained Earnings  (78.94) (64.57) (46.79) (29.58) (10.25) Application of Fund (%)  Treasury Stock ‐ Common 0.00 0.00 0.00 0.00 0.00 2011 ESOP Debt Guarantee 0.00 0.00 0.00 0.00 0.00 Unrealized Gain (Loss) 0.00 0.00 1.85 2.05 2.07 Other Equity, Total 4.20 2.66 0.06 (0.29) 0.26 Total Equity 0 78.89 84.57 77.79 77.00 71.42 42% Loan Fund Long Term Debt 0.00 0.00 7.37 8.24 14.91 Capital Lease Obligations 0.00 0.00 0.00 0.00 0.00 58% Deferred Income Tax 0.00 0.00 0.00 0.38 1.82 Minority Interest 0.00 0.00 0.00 0.00 0.00 Other Liabilities, Total 21.11 15.43 14.85 14.38 11.85 Total Loan Fund 21.11 15.43 22.21 23.00 28.58 Total Fund 100.00 100.00 100.00 100.00 100.00 Total Fixed Assets Uses of funds Fixed Assets Total Net Current Assets Property/Plant/Equipment,  Total ‐ Net 11.04 14.55 14.82 12.72 10.21 Goodwill, Net 12.08 28.22 24.59 20.67 15.74 Intangibles, Net 2.23 4.60 3.46 1.93 0.93 Long Term Investments 25.67 15.35 9.70 12.93 13.59 Note Receivable ‐ Long Term 0.00 0.00 0.00 0.00 0.00 Equity Research Report Other Long Term Assets, Total 7.35 6.15 3.69 2.50 1.79 Other Assets, Total 0.00 0.00 0.00 0.00 0.00 Total Fixed Assets 58.36 68.87 56.26 50.76 42.27 Get a Free Quote Net Current Assets Total Current Assets 101.91 100.78 96.90 92.85 93.73 Total Current Liabilities 60.26 69.65 53.16 43.60 36.00 Total Net Current Assets 41.64 31.13 43.74 49.24 57.73 Total Assets 100.00 100.00 100.00 100.00 100.00 © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 8
  • 9. Index Analysis Income Statement Particulars 2007 2008 2009 2010 2011 (Base Year) Sales 100.00 118.19 114.31 122.23 136.82 cost of goods sold 100.00 107.43 110.13 111.61 140.61 Gross profit 100.00 120.64 115.26 124.65 135.95 Credit/Bond Analysis General selling and  100.00 123.65 111.24 114.77 120.15 Research and development  100.00 114.65 126.53 122.37 126.99 other operating  Operating profit 100.00 100.00 101.14 119.02 (48.95) 101.46 50.51 126.50 56.45 143.75 Get a Free Quote Other non‐operating  100.00 3575.00 1400.00 (350.00) 775.00 EBITDA 100.00 118.37 101.21 126.59 143.63 Depreciation 100.00 116.67 141.67 150.00 185.75 EBIT 100.00 118.47 98.80 125.19 141.12 Interest expenses 0.00 0.00 0.00 0.00 0.00 EBT 100.00 118.47 98.61 124.44 139.65 Tax 100.00 101.61 87.01 103.60 81.53 EAT 100.00 125.71 103.58 133.38 164.59 Non recurring income  0.00 0.00 0.00 0.00 0.00 Reported profit 100.00 125.71 103.58 133.38 164.59 Minority Interest 0.00 0.00 0.00 0.00 0.00 Balance Sheet Particulars 2007 2008 2009 2010 2011 Sources of Fund Owners Fund Index of Loan Fund and Fixed  Redeemable Preferred Stock 0.00 0.00 0.00 0.00 0.00 Assets Preferred Stock ‐ Non  0.00 0.00 0.00 0.00 0.00 Common Stock 100.00 103.78 103.01 103.80 104.72 Additional Paid‐In Capital 0.00 0.00 0.00 0.00 0.00 Retained Earnings  100.00 89.04 76.47 57.00 26.34 Treasury Stock ‐ Common 0.00 0.00 0.00 0.00 0.00 ESOP Debt Guarantee 0.00 0.00 0.00 0.00 0.00 Unrealized Gain (Loss) 0.00 0.00 0.00 0.00 0.00 Other Equity, Total 100.00 68.92 1.81 (10.64) 12.39 Total Equity 100.00 116.69 127.21 148.49 183.56 Loan Fund Long Term Debt 0.00 0.00 0.00 0.00 0.00 2007 2008 2009 2010 2011 Capital Lease Obligations 0.00 0.00 0.00 0.00 0.00 Deferred Income Tax 0.00 0.00 0.00 0.00 0.00 Minority Interest 0.00 0.00 0.00 0.00 0.00 Total Loan Fund Total Fixed Assets Other Liabilities, Total 100.00 79.58 90.75 103.64 113.82 Total Loan Fund 100.00 79.58 135.77 165.76 274.60 Total Fund 100.00 108.85 129.02 152.13 202.78 Uses of funds Fixed Assets Property/Plant/Equipment,  Total ‐ Net 100.00 143.49 173.22 175.40 187.63 Goodwill, Net 100.00 254.37 262.67 260.38 264.31 Intangibles, Net 100.00 224.72 200.34 131.89 84.74 Long Term Investments 100.00 65.12 48.76 76.64 107.39 Note Receivable ‐ Long Term 0.00 0.00 0.00 0.00 0.00 Other Long Term Assets, Total 100.00 91.10 64.80 51.79 49.48 Other Assets, Total 0.00 0.00 0.00 0.00 0.00 Total Fixed Assets 100.00 128.47 124.37 132.32 146.88 Net Current Assets Total Current Assets 100.00 107.65 122.68 138.61 186.51 Total Current Liabilities 100.00 125.81 113.81 110.07 121.13 Total Net Current Assets 100.00 81.37 135.53 179.90 281.13 Total Assets 100.00 108.85 129.02 152.13 202.78 © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 9
  • 10. Ratio Analysis‐Annual Particulars 2007 2008 2009 2010 2011 Per Share Ratio Normalized EPS 1.44 1.90 1.59 2.14 2.73 Basic EPS 1.44 1.90 1.63 2.13 2.73 Diluted EPS 1.42 1.87 1.62 2.10 2.69 Adjusted Cash EPS 1.57 2.05 1.82 2.33 2.99 EPS Trend Dividend Per Share 0.40 0.44 0.52 0.52 0.64 Operating Profit per Share 2.19 2.72 2.42 3.06 3.61 Book Value Per Share  (Excluding Treasury Stocks) 3.19 3.89 4.42 5.24 6.72 Book Value Per Share  (Including Treasury Stocks) 3.19 3.89 4.42 5.24 6.72 Net Operating Income Per  Share 5.25 6.48 6.53 7.09 8.24 Free Reserve Per Share (3.19) (2.97) (2.66) (2.01) (0.97) Profitability Ratio (%) 2007 2008 2009 2010 2011 Operating Margin 41.67 41.97 36.99 43.13 43.79 Gross Profit margin 81.43 83.12 82.11 83.04 80.92 Normalized EPS Basic EPS Net profit Margin 27.51 29.26 24.93 30.02 33.10 Normalized Net Profit Margin 27.51 29.26 24.26 30.13 33.10 Diluted EPS Adjusted Cash Margin 29.86 31.58 27.84 32.90 36.29 Effective Tax Rate 30.03 25.75 26.50 25.00 17.53 Normalized Return on Net  Worth (Excluding Treasury  Stock) 45.23 48.73 35.84 40.77 40.55 Reported Return on Net Worth  (Excluding Treasury Stock)  45.23 48.73 36.83 40.63 40.55 Debt‐Equity Ratio Return on Long Term Fund 35.68 41.21 28.65 31.28 28.96 Leverage Ratio Long term Debt/Equity 0.00 0.00 0.09 0.11 0.21 Total Debt/Equity 0.27 0.18 0.29 0.30 0.40 Owned Fund as % of Total  Fund 78.89 84.57 77.79 77.00 71.42 Fixed Assets Turnover Ratio 2.22 2.04 2.04 2.05 2.07 Liquidity Ratio 2007 2008 2009 2010 2011 Current Ratio 1.69 1.45 1.82 2.13 2.60 Current Ratio (Including St.  Loans) 1.69 1.45 1.82 2.13 2.60 Long term Debt/Equity Quick Ratio 1.64 1.41 1.80 2.10 2.56 Total Debt/Equity Inventory Turnover Ratio 45.36 57.22 68.67 85.77 66.23 Payout Ratio(%) Dividend Payout Ratio 27.36 23.10 31.71 24.24 23.30 Dividend Pay out Ratio (Cash  Liquidity Ratio Profit) 25.21 21.40 28.40 22.12 21.25 Earning Retention Ratio 72.64 76.90 68.29 75.76 76.70 Cash Earning Retention Ratio 74.79 78.60 71.60 77.88 78.75 Coverage Ratio Adjusted Cash flow Time Total  Debt 2.14 3.26 1.69 1.75 1.18 Financial Charges Coverage  2007 2008 2009 2010 2011 Ratio (Pre Tax) NA NA 522.61 166.65 96.16 Financial Charges Coverage  Current Ratio Ratio (Post Tax) NA NA 384.39 125.24 79.47 Current Ratio (Including St. Loans) Quick Ratio © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 10
  • 11. Ratio Analysis‐Quarter Per Share Ratio Per Share Ratio (QoQ) Particulars 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 Operating Income Per  Share(Rs.) 1.93 2.04 2.05 2.47 2.05 Operating Profit Per Share(Rs.) 0.78 0.82 0.94 1.04 0.83 Adjusted EPS(Rs.) 0.61 0.69 0.68 0.78 0.60 Profitability Ratio Operating Profit Margin 40.36 40.17 46.01 42.03 40.64 EBITDA Margin 40.40 40.17 45.98 42.27 40.52 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 EBIT Margin 37.19 36.93 42.60 39.90 37.10 PAT Margin 31.85 33.82 33.03 31.72 29.34 Operating Income Per Share(Rs.) Operating Profit Per Share(Rs.) Adjusted EPS(Rs.) TTM Analysis Particulars (in Millions) 2012 Q2 % of Sales 2012 Q3 % of Sales Changes Sales 72052.00 100.00 73031.00 100.00 1.36 cost of goods sold 14845.00 20.60 14832.00 20.31 (0.09) Gross profit 57207.00 79.40 58199.00 79.69 1.73 General selling and  18226.00 25.30 18226.00 24.96 0.00 Research and development  other operating  9362.00 759.00 12.99 1.05 9610.00 459.00 13.16 0.63 2.65 (39.53) Fundamental Analysis and  Operating profit Other non‐operating  30378.00 53.00 42.16 0.07 30822.00 26.00 42.20 0.04 1.46 (50.94) Modeling EBITDA 30431.00 42.23 30848.00 42.24 1.37 Depreciation 2175.00 3.02 2243.00 3.07 3.13 EBIT 28256.00 39.22 28605.00 39.17 1.24 Get a Free Quote Interest expenses 367.00 0.51 378.00 0.52 3.00 EBT 27889.00 38.71 28227.00 38.65 1.21 Tax 4421.00 6.14 4883.00 6.69 10.45 EAT 23468.00 32.57 23344.00 31.96 (0.53) Non recurring income  0.00 0.00 0.00 0.00 NA Reported profit 23468.00 32.57 23344.00 31.96 (0.53) Minority Interest 0.00 0.00 0.00 0.00 NA EPS 2.77 2.75 (0.91) SPS 8.51 8.59 0.97 Profit Margins (TTM) 2012 Q3 79.69  42.20  42.24  39.17  38.65  31.96  31.96  2012 Q2 79.40  42.16  42.23  39.22  38.71  32.57  32.57  Gross profit Operating profit EBITDA EBIT EBT EAT Reported profit © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 11
  • 12. Valuation and Projection Price Estimates Analyst Recommendation Average Target 35.50 Median Target 36.00 Strong Buy Buy Hold Underperform Sell High Target 40.00 Low Target 20.00 0% 2% No. of Analyst 30.00 Projection 30% 38% Quarter  Quarter  Year Ending  Year Ending  Ending Jun‐12 Ending Sep‐12 Jun‐12 Jun‐13 30% Sales 18698.80 18456.60 74290.40 80645.30 EPS 0.66 0.71 2.72 3.05 Growth 7.67 6.24 6.22 8.55 Performance Over Industry Particulars Company Industry Earning Surprise Dividend Yield 2.81 2.65 Dividend Yield ‐ 5 Year Avg. 1.94 2.04 19% Dividend 5 Year Growth Rate 12.83 4.96 Payout Ratio(TTM) 27.36 73.24 Quick Ratio (MRQ) 2.88 1.77 Current Ratio (MRQ) 2.94 2.08 LT Debt to Equity (MRQ) 17.39 10.08 Total Debt to Equity (MRQ) 17.39 13.61 Interest Coverage (TTM) ‐‐ 4.43 3% 3% Gross Margin (TTM) 76.62 65.56 Gross Margin ‐ 5 Yr. Avg. 79.36 67.6 0% EBITD Margin (TTM) 41.9 ‐‐ EBITD ‐ 5 Yr. Avg 41.05 30.91 Q1 Q2 Q3 Q4 Operating Margin (TTM) 37.99 26.15 Operating Margin ‐ 5 Yr. Avg. 37.45 26.08 Pre‐Tax Margin (TTM) 38.65 25.63 Pre‐Tax Margin ‐ 5 Yr. Avg. 38.63 26.43 Net Profit Margin (TTM) 31.96 17.65 Net Profit Margin ‐ 5 Yr. Avg. 29.17 17.62 Effective Tax Rate (TTM) 17.3 30.48 Effective Tax Rate ‐ 5 Yr. Avg. 24.48 38.29 Excel‐VBA Based Model Revenue/Employee (TTM) NA NA Get a Free Quote Net Income/Employee (TTM) NA NA Receivable Turnover (TTM) NA NA Inventory Turnover (TTM) NA NA Asset Turnover (TTM) NA NA Return on Assets (TTM) NA NA Return on Assets ‐ 5 Yr. Avg. NA NA Return on Investment (TTM) NA NA Return on Investment ‐ 5 Yr.  Avg. NA NA Return on Equity (TTM) NA NA Return on Equity ‐ 5 Yr. Avg. NA NA © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 12
  • 13. Technical Analysis Price Chart 35 18000000 30 16000000 14000000 25 12000000 20 10000000 15 80000000 60000000 10 40000000 5 20000000 0 0 22‐Nov 1‐Feb 16‐Apr Volume Adj Close EMA(200) EMA(50) 1.50 1.00 0.50 0.00 ‐0.50 ‐1.00 MACD Signal line 100 80 60 40 20 0 RSI(14) Technical Indicators Price 28.45 AS On: 6/1/2012 EMA(13) 29.89 ADX 19 EMA(26) 30.35 DX 46 Technical Analysis Get a Free Quote EMA(50) 29.96 +DI 12 EMA(200) 27.31 ‐DI 33 RSI(14) 26.40 %K(Fast) 0 MACD ‐0.47 %K(Slow) 7.19 William(%R) ‐100.00 %d(Slow) 12.28 © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 13
  • 14. Service Description We provide financial research and analytics services to our worldwide client. Our research is  customized and proprietary to our clients and often provided in client formats and templates. Our  expert team of analyst add crucial values to client proprietary methodology and add efficiencies. Equity Research SKC Provides a broad range of services in this segment. We serve both buy side and sell side clients  like, bulge bracket equity research departments, hedge funds, investment advisers and independent  research houses. Our analytical capabilities includes: bottom‐up earnings forecasts, discounted cash  flow valuation models, thematic sector research, and research summaries etc. Financial Modeling & Analytics SKC provides all investment research and Financial Modeling solution to the clients. Our Quantitative  team comprises of highly qualified professionals with vast experience in Financial Modeling. Our  Expert team of statisticians provides financial modeling design suggestion to clients. Fixed Income & Credit Research We serve bulge bracket banks as well as credit hedge funds in Fixed Income and Credit research  segments. Our investment analysis involves forecasting  of interest rate structure, Risk analysis and E‐I‐ C research. Technical Analysis We are leading provider of technical analysis strategies and methodology. Our technical strategies  cover equity, index, Forex, commodities and fixed‐income markets. Our chartists and mathematical  approaches match requirements of various investment styles, from intraday trading to swing trading  and long term investments. Commodity Research and Analysis We are focused on fundamental and technical analysis of global commodities market. Our unique  commodity research and market insights will enable our customers to grasp the present scenario of the  market and what will it be in the future. Our commodity research team provides a complete solution  from price discovery to analysis. Forex Research and Analysis Our Forex Research expert team can delivers Forex‐related insight, tools, and information that you  need to make great decisions about your Forex trading. We are at industry forefront in terms of Forex  research service quality with extensive market experience and effective qualified specialist expertise. Our goal and focus is to provide the intelligence, opinion, and analysis of the currency  that will meet  your needs and foster your trading success. We Are Always Open For A Free Trial © Sri Krishna Consulting. Please write us for more information: iinfo@srikrishnaconsulting.com |www.srikrishnaconsulting.com Page 14