17. Worldโs first SEI CMM Level 5 CompanyCompany Financial overview (Rs. Cr) Total = Rs.2,77,543 mm Top Management Source: Company reports , Capitaline 3 29-01-2011 Wipro - Mindtree
18. Wipro loosing its steam, underperforms its rivals and Sensexโฆ Share price performance of major large Cap companies over the last year 162 128 115 109 Increasing revenue gap with the Indian rivals remains a concern Source: Capitaline 4 29-01-2011 Wipro - Mindtree
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20. With funds available of more than 67,722 mm, the company should be in a position for acquisitions to the tune of Rs. 25,000 mm without hurting its balance sheet covenants.Source:Wipro Q3 data, Wipro AR 2010 5 29-01-2011 Wipro - Mindtree
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22. The company recorded a net profit of Rs.215 cr. on revenues of Rs.1373 cr. for the year ended 31/03/2010 and Rs.30.5 cr. on revenues of Rs.394.4 cr. for the Quarter ending 31/12/10.
23. 269 customers,48 Fortune 500 CompaniesMarketable Molecules CRAMS Total = Rs.394 cr. Share price performance of Mid cap IT companies over the last one year Rs. 131 113 106 85 80 43 Source:Mindtree company reports, Capitaline 6 29-01-2011 Wipro - Mindtree
24. Mindtree Valuation - DCF Source: Company reports, Note:The data is just a sample of one pair of values of Beta and Terminal growth rate. Please refer to the excel sheet for te entire valuation 7 29-01-2011 Wipro - Mindtree
25. Sensitivity analysis for Beta and Terminal growth rate Terminal growth rate Beta The values denote the intrinsic share price of the company. The projected share price represents a premium of 16% - 25% to the average price of Mindtree over the last 30 days. The premium is slightly higher but brings to the table a diversified portfolio and new product lines for Wipro Source:Company reports, Capitaline Note: The P/E and EV/EBITDA are forward multiples. They represent the FY12 ie March โ12 multiples 8 29-01-2011 Wipro - Mindtree
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27. Although the multiples are greater than the estimated FYโ12 multiples, they are still at a discount to the industry average
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29. Backlash against offshore outsourcing: There could be regulatory or visa restrictions and customers might defer decisions, leading to lengthening sales cycles. The possibility of such a backlash in the medium term looks low
30. Rupee appreciation: A sudden appreciation in rupee could erode the operational growth delivered by the company
31. Volatility in Margins: The margins of the company have decreased over the last year. The valuations might be dented if they do not improve. Considering that the company has absorbed its restructuring costs due to acquisitions, the margins should improveSource: Capitaline , Mindtree AR, Refer Excel workings for Valuation 9 29-01-2011 Wipro - Mindtree
54. The entire amount should be funded by the balance sheet assets (cash and marketable securities). If any debt covenants are breached (a rare possibility), the company can raise equity for the same but it will dilute the earnings.Mindtree Top Management Top management concerns Mindtree was co founded by 3 ex-Wipro eecutives. As of now , Mindtree has many key members as Wipro alumni including Mr. Ashok Soota. The new management would have those members on board as well. This could actually be a blessing in disguise as the employees are accustomed to the Wipro culture and can easily adjust . It would be easier for the new management to take strategic decisions without a lot of friction between them Source:Capitaline for ownershi data,, Company AR and Q3 results 11 29-01-2011 Wipro - Mindtree