Mindtree's growth trajectory expected to lower following stellar show in FY19 (year of rev acceleration and margin expansion) as growth dichotomy between top account (36% CAGR over FY16-19) and residual biz (8% CAGR) normalises. The risk of high velocity (attrition) and low velocity (client metrics) cannot be ignored in the current scenario. FCF conversion also moderated on higher capex. We expect USD rev/EPS at 12/14% CAGR over FY19-21E, however at ~17x FY21E (vs. 13.5x for midcap IT) upside seems capped. We maintain NEUTRAL on Mindtree following inline 4QFY19. Our TP is Rs 1,040 implying 18x FY21E, with ~2% change in est.

Mindtree came out with good set of numbers in Q4FY19, PAT was ahead of our estimate though revenue & EBITDA were below our estimate. Revenue grew 25.6% YoY to Rs 18,394mn against our estimate of Rs 18,870mn. EBITDA stood at Rs 2803mn against our estimate of Rs 3270mn. PAT for the quarter stood at Rs 1984mn ahead of our estimate of Rs 1820mn. We are positive on the stock from longer term perspective, however due to ongoing news flow regarding stake sale/open offer activities, not much clarity is there for continuity of current management. To factor in this uncertainty...

18 April 2019 FY19, MTCL grew its constant currency (CC) revenue by 19.2% YoY, accelerating by over 2x from 9.3% YoY growth in FY18. EBITDA margin expanded 160bp YoY to 15.2% in FY19, driving EBITDA growth of 44% YoY. Adj. net income, thus, grew 55% YoY. MTCL announced a total dividend of INR33/share, taking its payout to 72% of FY19 earnings. For 4QFY19, MTCLs revenue growth of 3.9% QoQ CC (+17.9% YoY CC) was marginally ahead of our estimate of +3.1%. EBITDA margin shrank 70bp QoQ to 15.2% (in line) in the quarter. PAT increased 15% QoQ (+17% YoY) to INR1.

We attended Dilip Buildcon's analyst meet in Goa and visited the under construction site at Zuari bridge & Goa airport on 5th/6th April 2019. Execution of both projects are in high gear and expected to complete Zuari bridge by October 2020. Whereas,...

Revenue Below-par, Soft 1Q Guidance; Buy-back to Support Stock Wipro has delivered a below par revenue performance in 4QFY19. While its CC revenue rose 1% QoQ (vs. our estimate 1.9% QoQ), USD revenue rose 1.4% QoQ to US$2.076bn vs. our estimate US$2.087bn. From vertical perspective, BFSI grew by 1.3% QoQ, HLS grew by 2.1% QoQ and CBS rose by 5.3% QoQ, while COMM (-1.2% QoQ), ENU and MFG (-1.2% each) performed poorly (all in CC terms). IT EBIT margin declined by 59bps QoQ despite substantial increase in utilisation,...

17 April 2019 FY19 revenue by 5.4% YoY CC, improving gradually through the year and exiting 4Q with 6.9% YoY growth. IT Services EBIT margin expanded 180bp YoY to 17.9%, exiting the year at 19.0% (in line). Net income grew 12.4% to INR90b in FY19 from INR80.1b in the last fiscal. The announcement of INR105b worth of share buyback, combined with INR1/share of interim dividend, pegs its total payout at ~124% of net income. 4QFY19 QoQ CC revenue growth of 1% was at the midpoint of WPROs guided band of 0-2%, and marginally below our estimate of 1.5%. Net income declined 2.4% QoQ to INR24.9b (in line) in the quarter.

to remain under pressure; shift in favor of alternate fuel run engines and a likely steep increase due to BS6 emission norms to impact volumes: Greaves cotton Limited (GCL) derives around 40% of its revenues from the 3wheeler diesel engines segment. The diesel engine segment demand has been under pressure in the recent past given the Government thrust...

Revenue in constant currency terms grew 11.7% yoy to USD 3,060mn in Q4 FY19 (up 2.1% qoq) which was above our estimates of $3,031 mn. The revenue growth was supported by improvement in global IT spending environment across key verticals, especially Communications and Healthcare. Operating margin of 21.4% in Q4 FY19 was down 113 bps qoq (down 191 bps yoy) impacted by higher direct cost % of revenue. By Geography: North America remained strong with 3.7% qoq in revenue on CC basis while Europe business advanced 1.4% qoq. 4QFy19 revenue from India/rest of the world declined 9.1%/1.3% qoq, respectively. By Industry: BFSI remained under pressure with revenue on cc basis down 0.8% qoq while Retail declined 0.9% qoq. However, Communication vertical saw a robust growth of 16.6% qoq. By offering: Digital Revenues (33.8% of total business) registered a strong 9.7% qoq growth (+41% yoy) while the Core business was down 1.4%...

Deal TCV enhances revenue visibility for FY20E Banking & financial services continued to have momentum in Europe besides a few banks facing company specific issues. Sub-segments such as softness in capital markets can keep vertical growth in check. Commentary on demand in retail & CPG vertical was positive from a medium term perspective. The key positive was continued trajectory in order win TCV, growth of 5% QoQ at $6.2 billion ($21.9 billion in FY19). This implies book to bill ratio of 1.15x indicating better revenue visibility for FY20E. Hence,...

We largely maintain our FY20E revenue (in US$). We cut our EBIT margin forecast to 25.2% vs. 26.4% and also cut our EPS forecast by 4.3%. We introduce FY21 financials and forecast revenue (US$)/EPS CAGR of 11%/9.9% over FY19-21E. We maintain ACCUMULATE with new TP of Rs2,228 (vs. Rs2,084 earlier) based on 22x FY21E. Key Highlights and Investment Rationale Q4FY19 see strong revenue growth of 2.4%/12.7% QoQ/YoY in CC Both QoQ CC growth and US$ growth of 2.8% was in-line with our forecast. Life Sciences & Healthcare (7.7% of revenue; +18.2% YoY in CC) and Regional markets &...

Infosys' (INFO) Q4FY19 revenue of 2.1% QoQ in CC was in-line with our forecast. However, EBIT margin decline of ~115bps QoQ to 21.4% was a miss. This was offset by lower tax rate which boosted EPS of Rs9.4, +0.4%/+7% QoQ/YoY which was in-line with our forecast. Large deal TCV of US$1.57bn was higher than our forecast. INFO's FY20 revenue guidance of 7.5%-9.5% YoY in CC and EBIT margin guidance of 21%-23% is in-line with our forecast. While we maintain our FY20E revenue forecast, we now factor EBIT margin of 22.3% vs. 23.8% resulting in a 6.2% cut in EPS. We introduce FY21 financials and forecast revenue...

Sanofi India's (SIL) revenues in CY18 stood at Rs27,708mn, showing a growth of 11% compared to a year ago. The revenue mix witnessed a sharp change in favour of exports. The share of exports in total revenues increased to 30% from 26%. Exports grew 25% YoY, while the domestic business underperformed because of price cuts and potentially a correction in channel inventory. We believe the 100bps decline in gross margin on YoY basis can be primarily attributed to a higher share of export sales, which are associated with higher raw material costs. Apart from a rising share of exports, the company also went for price cut of Amaryl, which is one of the top brands in SIL's portfolio. Amaryl witnessed price cuts in some of its extension brands...

Infosys reported inline Q4FY19 revenue performance but sharp miss on Change in Estimates | Target | Reco margins due to large deal impact & investments on people. Management guided a lower than expected revenue growth for FY20E due to uncertain...

Infosys' softening FY19 margin trajectory (-150bps vs. +80bps for TCS despite INR tailwinds), is expected to continue over FY20 (-160bps erosion). This derives from a rising cost of delivery (higher localisation, sub-contracting) and the persistent challenge of high attrition, large deal investments and softness in the core BFSI vertical. We downgrade Infosys to NEUTRAL (from BUY) post its inline revenues in 4QFY19. The growth challenges and margin trajectory compels us to cut estimates by ~5%. Our TP falls to Rs 755 (Rs 805 earlier) at 18x FY21E EPS.

13 April 2019 TCS ended FY19 with full-year constant currency (CC) revenue growth of 11.4% YoY, EBIT margin of 25.6% (+80bp YoY) and net income growth of 22.5% YoY. In FY19, TCS paid out 93% of its free cash flows to shareholders via dividends/buybacks. For 4QFY19, revenue in CC grew 12.7% YoY (in line), EBIT margin shrank 50bp QoQ to 25.1% (in line after adj. for 60bp one-off) and net income at INR81.3b grew 17.7% YoY a 3.6% beat due to INR3.4b forex gains. TCS signed USD6.2b worth of deals in total contract value (TCS) in 4Q, making it the strongest quarter in FY19 on that front.

expectations of 2.2%. EBIT margins, however, was 25.1%, down 50bps qoq vs. our expectation of 25.6%, but in line if adjusted for one-time charges toward electoral trust. Robust commentary driven by client optimism, evident from strong TCV signings of US$6.2bn up 5% qoq indicates continued business traction for TCS in FY20E. The...

10 April 2019 Automobiles JLRs wholesale volumes declined 8% YoY (+41% MoM) to 70.2k units (in-line) in Mar19, including China JV volumes of 4.8k units (-32% YoY). Jaguar volumes declined 0.3% YoY to 21k units (in-line), while Land Rover (LR) volumes were down 10.9% YoY to 49.2k units (in-line). JLRs retail volumes declined 8% YoY in Mar19, led by lower sales in China (- 42.5% YoY) and the US (-8% YoY), partly offset by higher UK (+7.5%) and Europe (+1.1%) sales. Jaguars retail volume declined 0.2% YoY, led by a substantial volumes decline across models, barring E-pace (+32%) and I-Pace. LRs retail volumes declined 11.4% YoY, as growth in Range Rover Velar (+5% YoY) was more than diluted by a decline across other models.

We highlight that Zee's premium valuation has been driven by industry leading ad and subscription growth a function of viewership market share expansion, which currently is clouded by NTO led disruption. We also believe that NTO implementation, apart from providing consumers a choice, has led to higher power in DPO's hands in bundling channels. Zee's absence in base bouquet could be detrimental. Consequent, to revenue estimates, we revise our FY20 earnings downwards by 10.7%. Therefore, we downgrade the stock to HOLD. We introduce FY21 estimates and roll over...

Our management meeting with SIEM indicated the sustained thrust of the company to transform itself from being a product company (62-65% of sales) to a complete solution provider. SIEM is focused on 1) Digitization and localization 2) Creating smart infrastructure and 3) Increasing customer by leveraging its strong balance sheet and offering innovative financing. SIEM...