IT Mixed quarter, remain selective Sector Update

During April-June 2019 quarter, tier-1 Indian IT companies clocked Q1FY2020 Results Review mixed revenue growth, while EBIT margins declined across companies Sector: IT Services sequentially. Constant currency (CC) revenue growth for TCS, Infosys and HCL Tech remained strong at 10.6%, 12.4% and 17%, y-o-y Sector View: Neutral respectively. HCL Tech impressed with strong CC revenue growth of 4.2%, led by large deal ramp-ups, while TCS and Wipro missed our revenue estimates on soft growth in the BFSI vertical, as was the case with many other IT firms as well. However, most companies saw strong deal wins continue and a higher digital market share along with robust Our coverage universe y-o-y growth. Except TCS, elevated attrition remained a concern for most of the companies. Margins declined owing to wage revision, a rise CMP PT Companies Reco. (Rs) (Rs) in visa costs, transition costs for large deals, subcontracting costs and a stronger rupee. Most companies broadly maintained revenue growth HCL Tech 1,078 Buy 1,250 guidance for FY2020E, except Infosys, which raised its guidance despite a weak macro environment. Infosys 795 Buy 840 Outlook: L&T Infotech 1,593 Positive 1698 Cautious outlook on BFSI amid macro uncertainties, maintain Neutral L&T Tech 1,573 Positive 1847 stance: As spending by clients with exposure to capital markets Mastek 316 Positive 513 (especially in the US) and large European banks moderates and falling Persistent 564 Hold 650 interest rate in North America, we believe that growth in the BFSI vertical will remain weak in FY2020E. Further, slower demand owing to weak TCS 2,215 Buy 2,300 macroeconomics, trade wars and Brexit could delay client decisions Tech M 683 Positive 755 on spending. However, strong deal wins, a healthy deal pipeline, new Wipro 252 Hold 285 logo wins and robust growth in the digital segment offer us some comfort on sustainability of revenue growth momentum in FY2020E. The managements of most IT companies largely maintained revenue growth guidance (excluding Infosys) for FY2020E, though the growth outlook for TCS and Wipro depends on Q2 revenue growth, which would compensate Price chart any shortfall in a seasonally weak 2HFY2020E. Margins are expected

120 to remain under pressure owing to higher attrition, shortage of talent, transition costs in large deals and intense competition. Given cautious 110 commentaries on the BFSI and manufacturing verticals, higher attrition

100 and constraints in talent supply, we stay Neutral on the IT sector.

90 Valuations:

80 Macro unsupportive, remain selective: The CNX IT index has moved up 19 18 19 18 19 18 19 ------Jun Oct Apr Feb Dec Aug Aug by around 3% in the past one year and outperformed the Nifty by 9% in Nifty IT Nifty the same period. The steady performance by the CNX IT index was led by a stable demand environment, strong deal wins and the rising share of the digital segment. TCS continues to trade at a premium valuation on account of its strong business model and superior execution capabilities. HCL Tech and Tech Mahindra are trading significant discount to large peers due to certain challenges in their business models. Stock prices of most mid-cap IT companies have corrected in recent months on slowing revenue growth momentum and company-specific issues. Though we believe margins would remain under pressure, the rupee depreciation could be a wild card from margin tailwind. We continue to prefer select stocks in the IT sector given the potential revenue growth acceleration and reasonable valuation. Key risks: 1) Rupee appreciation vis-à-vis USD would affect earnings estimates in FY2020E/FY2021E and stock performance, 2) weaker macros including a potential for slower GDP growth in the US, Trade wars and Brexit and 3) continuation of elevated attrition. Leaders in Q1FY2020: HCL Tech and Infosys Laggards in Q1FY2020: Persistent systems & Mastek Preferred picks: Infosys, HCL Tech and Tech M among large-cap companies; L&T Infotech, Mastek & L&T Tech in the mid-cap space.

August 22, 2019 2 Sector Update

Q1FY2020 results snapshot Revenue q-o-q y-o-y EBITDA EBITDA q-o-q y-o-y Net q-o-q y-o-y (Rs cr) (%) (%) (Rs cr) margin (BPS) (BPS) profit (%) (%) Company name (%) (Rscr)

HCL Technologies 16,425.0 2.7 18.4 3,400.0 20.7 -180 -254 2,220.0 -13.6 -7.6 Infosys 21,803.0 1.2 14.0 5,152.0 23.6 -28 -237 3,802.0 -6.7 5.3 Persistent Systems 832.1 0.0 -0.3 120.2 14.4 -77 -234 82.5 -2.4 -5.6 TCS 38,172.0 0.4 11.4 10,037.0 26.3 -21 -18 8,131.0 0.1 10.8 Wipro 14,716.1 -2.1 5.3 2,947.0 20.0 -186 80 2,387.4 -3.9 12.6 Soft coverage (Viewpoint) L&T Infotech 2,484.9 0.0 15.3 457.9 18.4 -74 -101 355.5 -6.1 -1.6 L&T Tech 1,347.5 0.3 17.0 272.7 20.2 177 322 203.9 6.5 3.2 Mastek Limited 247.5 -7.3 1.4 32.9 13.3 7 60 24.2 -9.8 7.8 Tech Mahindra 8,653.0 -2.7 4.6 1,314.1 15.2 -324 -425 959.3 -15.3 6.8 Source: Company, Sharekhan Research

Valuations Price CMP EPS (Rs) P/E (x) Particulars Reco target (Rs) (Rs) FY19 FY20E FY21E FY19 FY20E FY21E HCL Technologies Buy 1,250 1,078 73.6 76.7 84.6 14.7 14.0 12.7 Infosys Buy 840 795 35.4 38.1 43.6 22.4 20.9 18.2 Persistent Systems Hold 650 564 44.0 48.4 52.5 12.8 11.7 10.7 TCS Buy 2,300 2,215 83.1 89.9 98.7 26.7 24.6 22.4 Wipro Hold 285 252 14.9 16.4 18.2 16.9 15.3 13.8 Soft coverage (Viewpoint) L&T Infotech Positive 1,698 1,593 86.4 84.8 98.9 18.4 18.8 16.1 L&T Tech Positive 1,847 1,573 72.9 75.7 86.4 21.6 20.8 18.2 Mastek Limited Positive 513 316 40.1 43.9 51.3 7.9 7.2 6.2 Tech Mahindra* Positive 755 683 47.7 50.2 56.9 14.3 13.6 12.0 Source: Company, Sharekhan Research *EPS of Tech Mahindra excludes treasury shares

August 22, 2019 3 Sector Update

Key points ŠŠ Mixed revenue performance: In Q1FY2020, tier-1 Indian IT companies reported mixed revenue growth performance, with revenue rising by -1.8-3.8% q-o-q and 0.6-15% y-o-y in US Dollar terms. However, on a y-o-y basis, tier-1 IT companies delivered strong constant currency (CC) revenue growth of 5.9-17% in Q1FY2020. CC revenue growth for Infosys and HCL Tech continued to accelerate y-o-y, while it decelerated for TCS, Wipro and Tech Mahindra (Tech M). TCS’ y-o-y revenue growth remained robust at 10.6% in Q1FY2020. HCL Tech impressed with a strong CC revenue growth of 4.2% q-o-q led by large deal ramp-ups and a lower-than-expected ramp-down from a couple of clients in the financial services vertical and one client in the manufacturing vertical. Infosys and Tech M reported revenue growth on expected lines, while TCS and Wipro missed our revenue expectations owing to soft growth in the financial services vertical. HCL Tech continued to lead the pack with CC revenue growth of 4.2% q-o-q (3.7% organic) during Q1FY2020, followed by Infosys (2.8% q-o-q), TCS (2.2% q-o-q), Wipro (-0.7% q-o-q) and Tech M (-1% q-o-q). Under our mid-cap coverage, L&T Infotech (LTI) delivered revenue growth on expected lines, while L&T Tech (LTTS), Persistent Systems (PSL) and Mastek delivered lower-than-expected revenue growth numbers. ŠŠ Margins under pressure: In Q1FY2020, margins remained weak. EBIT margin of tier-1 IT companies declined on a q-o-q as well as y-o-y basis for most companies (except Wipro). Pressure on operating profitability can be attributed to higher subcontractor expenses, seasonality (wage hikes), higher visa costs, transition expenses on large deals and rupee appreciation. Under our mid-cap coverage, L&T Tech (LTTS) surprised with beat in margin estimates, while LTI and Mastek clocked an operating profit margin (OPM) on expected lines. We expect margin pressure to continue in FY2020E on account of higher attrition, investments for future growth and constraint in talent supply. ŠŠ BFSI stays soft, attrition rates soar, deal wins stay strong: Managements most of tier-1 companies indicated that revenue growth was affected by weakness in the BFSI (capital markets in the US and European banking clients), manufacturing vertical and lower spending of clients in key regions. Cognizant’s management remained cautious on spends in the banking sector in H2 due to weakness in capital markets, M&A activity in the US and weak macro factors. Most IT companies highlighted strong deal inflows and healthy deal pipelines during the quarter. Deal wins increased by 16-123% y-o-y for the top five companies, reflecting a good demand environment. Digital revenue grew strongly across companies (except PSL) and the contribution to overall revenue improved to almost one-third (29.7-38.9%) in Q1FY2020. Attrition continued to inch up by 60-200 bps y-o-y and remained concern for many companies. Infosys increased revenue growth guidance to8.5-10% (versus 7.5-9.5% earlier) for FY2020E on the back of strong Q1, robust deal momentum and healthy deal pipeline, whereas HCL Tech retained its strong revenue growth guidance of 14-16% (increased organic growth to 8-10% vs 7-9% earlier). Wipro provided Q2FY2020 CC revenue growth guidance on expected lines.

August 22, 2019 4 Sector Update

Demand commentary in Q1FY2020 Company Demand commentary Guidance Infosys • Management increased FY2020E CC revenue growth guidance despite For FY2020E, Infosys industry wide concerns on demand. increased CC revenue • TCVs remained strong even after adjusting for Stater acquisition. growth guidance to 8.5- 10% y-o-y from 7.5-9.5% • Infosys witnessed challenges in the BFSI vertical due to M&A activity in earlier. a few US banks and softness in the capital markets in Europe and the US. The company expects strong demand from retail banking, commercial banking, corporate banking, paymentsand wealth management segments. • Large deal wins, new logos and differentiated offerings in the digital space will drive growth in the retail vertical. Consolidation continues in CPG with clients increasing spends on integrated BPO and technology services. • Management expects macro concerns, especially in Europe to affect client spending in the manufacturing vertical.

TCS • Management remains optimistic on medium-to-long-term demand outlook NA despite macro challenges, while it believes the near term could remain volatile. • Management also positive on achieving double-digit growth in FY2020E, but hinges on a Q2FY2020E. With lower-than-expected performance in Q1, the management highlighted that Q2 remains key as it would be difficult to compensate for the shortfall in a seasonally weak H2FY2020. • BFSI vertical performance was affected by softness in the US capital markets and large European banks. • Management remains confident of demand recovery in retail vertical in medium-to-long term, while it expects strong growth in the manufacturing vertical in the US and muted growth in the Europe and the UK.

Wipro • The management guided Q2FY2020E revenue growth along with our Management has guided modest expectations. sequential revenue • In the financial services vertical, Wipro has a substantial exposure growth range of 0-2% for to impacted segments such as capital markets and European banks. Q2FY2020E. Macro uncertainties have affected decision-making among BFSI clients, especially in the capital markets segment globally and in the banking segment in Europe. • Management expects consumer vertical revenue growth to pick up from Q2 onwards. • Wipro remains more cautious on demand outlook compared to last quarter given the delay in decision making of clients.

HCL Tech • Management retained revenue growth guidance for FY2020E despite Retained strong CC delay in closure in select IBM products acquisition by one month. growth guidance of 14-16% • Growth in the financial vertical was strong, excluding a couple of clients in y-o-y for FY2020E, and the capital markets segment. Of the two clients, revenue for one client has increased organic revenue stabilised and weakness to continue in the other account. growth guidance of 8-10% (7-9% earlier). Maintained • The management highlighted that the increasing adoption of hybrid cloud EBIT margin guidance at would provide opportunities in IMS and help HCL Tech to gain market 18.5-19.5% for FY2020E. share. The company is selective in picking clients to maintain margin profile of deals close to the company average.

Tech Mahindra • Management maintained revenue growth guidance for its Enterprise and NA communication vertical for FY2020E. • Management highlighted that the enterprise segment was affected by weakness in BFSI and auto verticals and softness in Europe. • Despite slow start in communication vertical in Q1FY2020, growth in this vertical for FY2020E would be better as compared to FY2019 on the back of strong deal wins in the past three quarters.

Source: Quarterly earnings conference call

August 22, 2019 5 Sector Update

Q1FY2020 snapshot April-June 2019 quarter Target Upward/ Company performance Reason Reco Price downward Revenues Margins Net income (Rs.) Infosys In line Above Above Fine-tuned We have tweaked our earnings estimates Buy 840 for FY20E/FY21E on account of better- than-expected margin performance. TCS Below In line Above Fine-tuned We have tweaked our earnings estimates Buy 2,300 for FY20E/FY21E, factoring in factoring lower-than-expected revenue in Q1FY2020. Wipro Below Above Above Fine-tuned We have tweaked our earnings estimates Hold 285 for FY20E/FY21E factoring in lower-than- expected revenue growth in Q1FY2020 along with muted growth in Q2 revenue growth guidance HCL Above Below Below Fine-tuned We have tweaked our earnings estimates Buy 1,250 Technologies for FY20E/FY21E factoring in miss in operating profitability and higher tax provisions Tech In line Below Above Fine-tuned We have tweaked our earnings estimates Positive 755 Mahindra for FY20E/FY21E factoring in margins missing estimates in Q1FY2020 and the continued softness in certain industry pockets in the enterprise segment. L&T Infotech In line In line Below Fine-tuned We have tweaked our earnings estimates Positive 1,698 for FY20E/FY21E factoring in growth challenges in large accounts and higher cost structure. Persistent Below Below Below Fine-tuned We have lowered our earnings estimates Hold 650 Systems for FY2020E/FY2021E, factoring in lower- than-expected revenue growth and operating margin performance (even as excluding one-time provision). Mastek Below In line Below Fine-tuned We have revised our earnings estimates Positive 513 Limited downward for FY2020/FY2021E, factoring in lower-than-expected revenue performance in Q1FY2020 and a slower recovery in UK’s private sector. L&T Below Above Above Fine-tuned We have lowered our earnings estimates Positive 1,847 Technology for FY2020E and FY2021E, as revenue missed estimates in Q1FY2020 and revenue growth guidance was slashed. Source: Sharekhan Research

Highlights of the quarter’s performance Quarterly revenue run rate of tier-1 IT companies (on reported basis): Quarter Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Ended

Infosys 2,587.0 2,551.0 2,569.0 2,651.0 2,728.0 2,755.0 2,805.0 2,831.0 2,921.0 2,987.0 3,060.0 3,131.0 q-o-q (%) 3.4 -1.4 0.7 3.2 2.9 1.0 1.8 0.9 3.2 2.3 2.4 2.3 TCS 4,374.0 4,387.0 4,452.0 4,591.0 4,739.0 4,787.0 4,972.0 5,051.0 5,215.0 5,250.0 5,397.0 5,485.0 q-o-q (%) 0.3 0.3 1.5 3.1 3.2 1.0 3.9 1.6 3.2 0.7 2.8 1.6 Wipro 1,916.3 1,902.8 1,954.6 1,971.7 2,013.5 2,013.0 2,062.0 2,026.5 2,041.2 2,046.5 2,075.5 2,038.8 q-o-q (%) -0.8 -0.7 2.7 0.9 2.1 - 2.4 -1.7 0.7 0.3 1.4 -1.8 HCL Tech 1,722.4 1,745.3 1,816.8 1,884.2 1,928.0 1,987.5 2,038.0 2,054.5 2,098.6 2,201.5 2,277.8 2,363.6 q-o-q (%) 1.9 1.3 4.1 3.7 2.3 3.1 2.5 0.8 2.1 4.9 3.5 3.8 Tech M 1,072.4 1,116.1 1,131.2 1,138.1 1,179.2 1,209.1 1,244.3 1,224.1 1,218.2 1,260.8 1,267.5 1,247.1 q-o-q (%) 4.0 4.1 1.4 0.6 3.6 2.5 2.9 -1.6 -0.5 3.5 0.5 -1.6 Total 11,672.1 11,702.2 11,923.6 12,236.0 12,587.7 12,751.6 13,121.3 13,187.1 13,494.0 13,745.8 14,077.8 14,265.5 q-o-q (%) 1.4 0.3 1.9 2.6 2.9 1.3 2.9 0.5 2.3 1.9 2.4 1.3 Source: Company, Sharekhan Research

August 22, 2019 6 Sector Update

Quarterly USD revenue growth: y-o-y (%) Quarter Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Ended Infosys 8.2 6.0 5.0 6.0 5.5 8.0 9.2 6.8 7.1 8.4 9.1 10.6 TCS 5.2 5.8 5.8 5.2 8.3 9.1 11.7 10.0 10.0 9.7 8.5 8.6 Wipro 4.6 3.5 3.9 2.1 5.1 5.8 5.5 2.8 1.4 1.7 0.7 0.6 HCL Tech 11.5 11.4 14.5 11.4 11.9 13.9 12.2 9.0 8.9 10.8 11.8 15.0 Tech M 6.1 10.0 10.6 10.3 10.0 8.3 10.0 7.6 3.3 4.3 1.9 1.9 Source: Company, Sharekhan Research

Quarterly CCrevenue growth: y-o-y (%) Quarter Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Ended Infosys 8.2 6.0 5.0 6.0 5.4 8.0 9.2 6.8 8.1 10.1 11.7 12.4 TCS 7.0 8.6 7.5 6.3 7.1 6.2 7.2 9.3 11.5 12.1 12.1 10.6 Wipro 7.2 6.2 5.2 3.4 2.8 3.0 2.5 2.4 5.1 7.0 6.9 5.9 HCL Tech 12.8 13.8 16.1 12.2 10.6 11.2 8.2 8.5 10.5 13.0 15.3 17.0 L&T 7.2 10.3 10.2 11.8 11.7 16.4 18.7 22.9 22.9 20.6 17.5 12.9 Infotech Source: Company, Sharekhan Research

Digital revenue (as a % of total revenue): Digital mix improving; Strong y-o-y growth Quarter Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Ended Infosys 23.9 25.2 26.1 26.8 28.4 31.0 31.5 33.8 35.7 TCS 18.9 19.7 22.1 23.8 25.0 28.1 30.1 31.0 32.2 Wipro 22.5 24.1 25.1 26.7 28.0 31.3 33.2 35.0 37.4 HCL Tech NA NA NA NA 26.6 27.9 29.0 29.5 29.7 Tech M NA NA NA 27.0 27.0 31.0 33.0 34.1 36.0 L&T Infotech 29.0 32.0 33.0 33.0 34.0 37.0 37.0 38.0 38.9 Source: Company, Sharekhan Research

Revenue growth (%):Mixed revenue performance

5.0 4.2 3.8 4.0 2.8 3.0 2.3 2.2 2.0 1.6

in % 1.0 0.0 -1.0 -0.7 -1 -2.0 -1.8 -1.6 -3.0 Infosys TCS Wipro HCL Tech Mahindra Technologies CC QoQ (%) $ revenue QoQ (%)

August 22, 2019 7 Sector Update

EBIT margins (%): Margins under pressure Particulars Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Infosys 24.9 25.1 24.6 24.1 24.2 24.3 24.7 23.7 23.7 22.6 21.4 20.5 q-o-q (bps) 78 20 -49 -53 10 10 46 -101 3 -118 -113 -93 TCS 26.0 26.0 25.7 23.4 25.1 25.2 25.4 25.0 26.5 25.6 25.1 24.2 q-o-q (bps) 94 - -28 -236 171 10 22 -36 148 -90 -52 -94 Wipro (IT) 17.8 18.3 18.3 16.8 17.3 17.2 16.0 15.6 14.6 19.8 19.2 18.4 q-o-q (bps) 4 51 -5 -97 48 -10 -120 125 -107 526 -59 -85 HCL Tech 20.1 20.4 20.0 20.1 19.7 19.6 19.6 19.7 20.0 19.7 19.0 17.1 q-o-q (bps) -46 26 -34 8 -41 -12 - 6 29 -30 -65 -193 Tech M 11.5 12.4 8.2 9.4 11.0 12.7 13.8 13.0 15.3 16.1 15.4 11.5 q-o-q (bps) -44 90 -421 117 167 169 108 -82 234 75 -70 -391 Source: Company, Sharekhan Research

Vertical-wise revenue: BFSI growth remained soft Jun-2019 Revenue Contribution $ Growth (%) ($ mn) (%) q-o-q y-o-y Infosys Financial services 983 31.4 1.7 9.2 Retail 495 15.8 1.7 5.3 Communication 432 13.8 4.6 20.2 Energy, utilities, &resources 407 13 4.7 15.9 Manufacturing 301 9.6 -1.8 10.6 Hi tech 241 7.7 2.3 15.1 Life sciences 191 6.1 4.0 2.2 Others 81 2.6 2.3 -0.8 Total 3,131 100 2.3 10.6 TCS BFSI 1,689 30.8 1.6 7.5 Retail & CPG 823 15 1.0 5.8 Communication & media 378 6.9 1.6 5.5 Manufacturing 538 9.8 3.7 4.3 Life Science and healthcare 433 7.9 4.3 17.5 Technology & services 483 8.8 4.0 6.2 Regional markets and others 1,141 20.8 -0.8 13.5 Total 5,485 100 1.6 8.6 Wipro BFSI 644 31.6 -1.5 6.0 Consumer 318 15.6 -5.4 -1.9 Technology 265 13 1.4 -7.9 Healthcare 269 13.2 -1.8 -0.9 Energy & utilities 261 12.8 -1.8 3.0 Manufacturing 161 7.9 -3.0 -4.2 Communications 120 5.9 1.7 6.0 Total 2,039 100 -1.8 0.6 HCL Tech Financial services 480 20.3 -0.2 -1.9 Manufacturing 470 19.9 18.0 25.1 Technology & services 447 18.9 4.9 19.5 Retail & CPG 225 9.5 -1.4 20.1 Telecom, media, publishing 189 8 -3.5 26.1 LifeSciences & healthcare 303 12.8 2.2 15.0 Public services 251 10.5 -0.9 16.1 Total 2,364 100 3.8 15.0 Tech M Communication 524 42 -3.2 8.1 Manufacturing 242 19.4 -5.5 -1.7 Technology, media & entertainment 95 7.6 -0.3 7.5 BFSI 160 12.8 -3.9 -4.1 Retail, transport and logistics 77 6.2 -4.7 3.5 Others 150 12.0 14.8 -9.5 Total 1,247 100 -1.6 1.9 Source: Company, Sharekhan Research

August 22, 2019 8 Sector Update

Service-wise revenue: Strong growth continued in digital Jun-2019 Revenue Contribution $ Growth (%) ($ mn) (%) q-o-q y-o-y Infosys Service 2,953 94.3 2.0 9.6 Products and platforms 178 5.7 8.0 31.3 Total 3,131 100 2.3 10.6 Digital 1,119 35.7 8.1 39.4 Core 2,012 64.3 -0.6 -0.8 Total 3,131 100 2.3 10.6 Wipro Application services 909 44.6 -2.9 -2.7 Cloud and infrastructure services 524 25.7 0.2 -5.6 BPO 300 14.7 -3.1 19.3 Product engineering 155 7.6 -1.8 -0.7 Data, analytics and AI 151 7.4 1.0 7.9 Total 2,039 100 -1.8 0.6 HCL Tech IT and business services 1,780 75.3 NA NA Engineering and R&D Services 399 16.9 NA NA Products & platforms 184 7.8 NA NA Total 2,364 100 3.8 15.0 Source: Company, Sharekhan Research

Geography-wise revenue: North America performed well Jun-2019 Revenue Contribution $ Growth (%) ($ mn) (%) q-o-q y-o-y Infosys North America 1,929 61.6 3.0 13.5 Europe 739 23.6 0.6 7.4 India 72 2.3 2.3 -2.2 Rest of world 391 12.5 2.3 5.5 Total 3,131 100 2.3 10.6 TCS North America 2,775 50.6 1.4 7.7 Latin America 99 1.8 -8.5 2.9 UK 867 15.8 1.0 10.7 Continental Europe 784 14.3 3.1 10.9 India 329 6.0 5.1 12.3 APAC 516 9.4 0.6 6.3 MEA 115 2.1 6.7 3.7 Total 5,485 100 1.6 8.6 Wipro Americas 1,197 58.7 -0.9 7.6 Europe 502 24.6 -1.8 -3.3 RoW 340 16.7 -4.6 -6.1 Total 2,039 100 -1.8 0.6 HCL Tech Americas 1,600 67.7 11.7 20.8 Europe 612 25.9 -9.5 6.0 RoW 151 6.4 -11.7 -3.4 Total 2,364 100 3.8 15.0 Tech M America 594 47.6 0.6 0.6 Europe 344 27.6 -6.3 -6.3 RoW 309 24.8 15.4 15.4 Total 1,247 100 -1.6 1.9 Source: Company, Sharekhan Research

August 22, 2019 9 Sector Update

Increase in attrition rates, higher net addition Deal wins ($ million): Deal wins momentum continued

14000 24% 7,000 21.5% 12356 21.0% 6,200 12000 20% 17.6% 17.3% 6,000 5,700 5,100

10000 4,900

16% 5,000 4,900 8000 11.5% 5935 12% 4,000 6000 4691

8% 3,000 2,714 4000 3425 2,029

4% 1,570 2000 906 2,000 1,568 1,116 0 0% 1,000 550 475 440 408 270 Infosys TCS Wipro HCL Tech 0 Technologies Mahindra TCS Infosys Tech M

Net Addition (LHS) Attrition (RHS) Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20

Source: Company, Sharekhan Research Source: Company, Sharekhan Research

Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

August 22, 2019 10 Know more about our products and services

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