Institutional Equities

Information Technology Sector 05 July 2021

Improving visibility into FY23; Raise Target Prices; View Neutral Girish Pai We increase our target prices on our coverage universe consequent to the upward shift in target PE multiple Head of Research for TCS (our valuation benchmark), as we adjust our valuation framework to the most recent 5-year history in [email protected] place of the 5-year history pre-pandemic. Not only has mean PE value moved up amid market’s growing +91-22-6273 8017 confidence in faster earnings growth in the foreseeable future compared to 3/5 year period pre-pandemic, the standard deviation has also seen a significant expansion (from 2.5 in the previous case to 4.2 in the latest framework) due to volatile events in the last 2 years. The latter does indicate higher risk at current levels with little room for disappointment in fundamental performance. On the positive side, we see a trifecta that will drive P/E multiple expansion (1) faster revenue/earnings growth (2) higher cash flow conversion (3) higher return of capital to shareholders. For other stocks in our universe, we have held on to the PE multiple discounts vis-à-vis TCS’ target PE multiple that we had in our earlier framework. Post a likely mid-teen organic revenue growth in FY22 for a large part of our Tier-1 coverage universe, we see ~10% growth in FY23 and visibility on it is improving as we navigate CY2021. We broadly maintain FY22/FY23 estimates and introduce FY24 numbers. We maintain our ‘neutral’ stance on the sector with a modestly positive bias and have ‘Buy’ ratings on HCL Technologies and Tech Mahindra. We have an ‘accumulate’ rating on TCS, Infosys and Wipro among the large caps and Persistent Systems among the mid-caps. The only ‘sell’ in our coverage is Mindtree. We see potential for modest positive surprises on the fundamental side in FY22/FY23 due to following: (1) We see expansionary fiscal policies globally (especially in the US) reinforcing extant loose monetary policies started in 1HCY20. US will likely clock the fastest real GDP growth in the last 40 years at ~6.6% in 2021 with a likely above trend growth in 2022 too at ~4.1%. (2) We see developed market corporate revenue growth and profitability improving in this environment. S&P 500 sales, profit and cash flow have improved from where they were 6-9 months back. Revenue of S&P technology companies have been as resilient as those of its healthcare firms. (3) We see tech intensity of corporates rising post the pandemic. Mckinsey sees it moving from 3% of sales in 2020 to 5% of sales in 2030, which we believe will be positive for well-positioned IT vendors in the next 5 years (4) Lack of adequate in-house digital talent will lead to greater reliance on outsourcers (5) The traditional consulting model has become more tech-oriented during the

pandemic, which we believe puts IT service providers globally in a position of relative strength vis-a-vis and 1QFY22 Preview and

history against the current incumbents (6) We see margins sustaining in a narrow band as there are levers that can sustain. Offshore delivery will most likely sustain/increase in FY22. We see utilization staying higher than pre-pandemic levels due to the sustained usage of crowd sourcing platforms (internal/external). Better pricing for Digital and Consulting assignments could also be mildly supportive, at least in the short term. Higher talent costs, we believe, will be absorbed by Tier-1 players. 1QFY22 results preview: After 2-3 quarters of scorching QoQ growth in FY21, we think 1QFY22 will also be quite strong, Update reflecting the strong order inflow seen in FY21, quick revenue conversion and seasonality. The range of growth for the coverage universe in CC terms (QoQ) will be 2-7.5%. On margins, we believe that the second round of wage hikes within 6-9 months will have an impact on some companies in 1QFY22 and for others in 2QFY22, but much of the negative impact would be largely countered later in the year. We expect order inflow to be strong. With Accenture reporting 39% YoY growth in its TCV in its latest quarter (that largely coincides with 1QFY22), we think the street will not settle for anything less than double-digit growth over last year’s TCV numbers. Whether the order pipeline continues to get refilled despite strong deal Sector Sector wins is a key monitorable. We think Infosys will likely raise its current revenue growth guidance only after 2QFY22. HCLT may decide to give a specific guidance to instill confidence in investors. There has been less news around ‘mega deals’ in 1QFY22 compared to 4QFY21. However, recent management commentary makes us comfortable that the demand is strong. Elevated valuation to hold up: Valuation, which is at 10-12 year peak, will hold up on accelerated organic revenue/earnings growth over FY21-FY24 relative to FY15-FY20 (~12%/~14 vs ~7.5%/7%). We estimate that 50-100bps of growth during FY15-FY20 came from inorganic means. The acceleration is being funded through (1) A higher IT spend-to- sales ratio for almost all enterprises in the near term as each and every business function is infused with more technology. While there could be a spike in this ratio in the next 12-24 months, we think this number could likely settle lower but at levels higher than pre-pandemic times. (2) We expect internal-to-external spend mix within IT services (which has likely been in 75:25 or 70:30 ratio in favor of internal spend for some industries) to shift to outsourcing as acceleration to digital has meant that enterprises are saddled with not only redundant technology assets (hardware and software, largely on-premise) but also some redundant human assets (employees with legacy skillsets). All these points reinforce (at least for the next 12-24 months) our thesis that it will be a ‘rising tide lifting most boats’ scenario, which will likely lead to pick-up in growth across the board with even some of the weaker players displaying strength in order booking and revenue growth. We think that differentiation in growth over the next 12-24 months across the current Tier-1 set would be a challenge. But, over a longer term (3-5 years), we believe IT companies with strong capabilities, who choose projects judiciously and execute well, will not only grow faster on a sustainable basis, but will have higher margins and higher return ratios. The target valuation multiples that we have ascribed to these companies reflect our view on this aspect.

Going Please refer to the disclaimer towards the end of the document.

Institutional Equities

Why a ‘Neutral’ on the sector: Through our sector update of 6th Sept, 2020 (Rising monetary and digital tides lifting most boats), we had upgraded our view to ‘neutral’ on the IT sector from a ‘cautious’ one held for the last many years on the back of both higher earnings and higher target PE multiples. We subsequently raised our target prices in our notes on 28th Sept, 2020 (Medium term commentary turning more positive), 28th Dec. 2020 (Looks stronger near term) and post 3QFY21 and 4QFY21 results. The earnings uplift (~2x of the growth seen during FY15-FY20) is coming from an expectation of 400-600bps pick-up in organic revenue growth over FY21-FY24 against the one seen during FY15-FY20 (6-8% in USD terms), along with an improvement in margins. The revenue acceleration is coming from increased spending on Digital by clients and a move towards greater outsourcing (driven by lack of internal talent). This spending will likely be compressed in a short period of time – 24 to 36 months. The demand uplift is more widespread than seen in the past and is a ‘rising-tide-lifting-most-boats’ kind of situation. Reasons for change in customer behavior, in our view, are: (1) Strong need for digital transformation, not only to structurally cut costs, but also to improve resiliency in operations, deliver contact-less consumer, employee and supplier experiences, driven by the nature of the pandemic. Based on the commentary from customers, software companies and IT services vendors, we believe that digital demand has been pulled forward from the future. (2) Quick and unprecedented ‘whatever-it-takes’ monetary and fiscal actions in the US and Europe that likely eliminated tail risks to economic recovery and reduced risk aversion among corporates. These monetary conditions could last, we believe, for at least 12 more months more if not longer. The changed view on margins has been driven by business model changes that the pandemic has induced, which we think are structurally positive and quite a few of them would last in the longer term as well. These involve higher offshoring, higher utilisation, lower subcontractor cost (longer term) and structurally lower travel & marketing costs.We see accelerated employee pyramid reshaping that could control cost increases. We see WFH/WFA expanding the talent pool in a material way in the long term, especially through greater number of >30 year old women remaining in the workforce and greater usage of gig worker platforms, reducing pressure on costs. Higher PE multiples may sustain: Driven by (1) an upward shift in revenue and earnings growth trajectory (2) lower interest rates globally and domestically (3) valuation exuberance (irrational!?) in the enterprise technology space in the US. While there is a growth spike in FY22 after a modest dip in FY21 (lower than anticipated), we see organic revenue growth in FY23 being lower than FY22, but still in the ‘double digit’ space. We think ‘at least’ a high single digit growth is likely in the couple of years beyond FY23. We should see greater divergence of growth among players beyond FY23 as growth moderates. Why not a sell: (1) We see earnings acceleration over FY21-FY24 due to faster revenue growth and a higher margin trajectory. (2) Current exuberance (irrational!?) in enterprise tech valuations in the US likely rubbing off on Indian IT services. (3) a situation where double-digit/high single digit revenue growth could stretch beyond FY23. (4) lower for longer interest rates – at least for the next 12 months globally - could keep PE multiples elevated.

Why not a buy: (1) PE multiples are already at 10–12-year highs and partly/fully reflect turnaround in fundamentals over FY21-FY24. (2) Adverse impact on US customers from higher corporate taxation if US President Joe Biden has his way. (3) Likely slower organic growth in the medium term as spends are pulled forward. Growth could settle into mid-single digit territory in USD terms beyond a point. (4) A likely deflation in enterprise tech valuations in the US, especially if there is an earlier-than-expected and sharp increase in interest rates by the Fed as it sees high inflation in the US being far more embedded and not transitory as it sees currently. (5) a wider basket of investment choices in India as many more sectors participate in the growth story from here on compared to the past.

Valuation and stock calls: TCS continues to be our sector benchmark as it is best positioned in the industry. We have benchmarked all other coverage companies with respect to TCS and given subjective discounts to its Target PE multiple based on our assessment of risks, sustainability of earnings growth and return ratios. While historically we have not liked mid-tier IT companies due to their significant client, geographic and vertical concentration risks and weaker capabilities, we believe they could be beneficiaries in the next 12-24 months of robust demand. We believe vendor consolidation risks are lower due to this. We also think that some of them are undergoing a structural change for the better under new managements, which could set them up for better growth, margins and PE multiples. But, we believe the uniformly strong growth seen across both large-sized and mid-sized players is probably a 12-24 month phenomenon and there is likely to be greater disparity after that and our valuation discounts to TCS partly reflect that.

2 Information Technology Sector

Institutional Equities

Exhibit 1: Changes made to our earnings estimates, target prices and ratings New New New Old Old Market New Old New Upside Old Change CMP FY22E FY23E FY24E FY22E FY23E New Company Cap.(US$ target target Old Rating TP to TP in TP (Rs.) EPS EPS EPS EPS EPS Rating bn) PE (x) PE (x) (Rs.) CMP(%) (%) (%) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) TCS 3,325 164.7 104.3 119.7 131.7 104.3 120.6 30.6 26.3 Accumulate Accumulate 3663 10.2 3165 15.7 Infosys 1,568 89.4 54.4 60.5 67.6 54.4 61.2 27.5 23.6 Accumulate Accumulate 1667 6.3 1411 18.1 Wipro 539 39.5 20.9 24.5 28.1 20.2 24.0 23.0 19.7 Accumulate Accumulate 563 4.5 465 21.1 HCL Technologies 985 35.8 50.1 57.5 59.2 51.8 58.4 23.0 19.7 Buy Buy 1320 34.0 1150 14.8 Tech Mahindra 1,089 14.1 64.2 72.4 81.9 64.1 71.0 19.9 17.1 Buy Buy 1441 32.3 1211 19.0 Mindtree 2,583 5.7 79.0 90.9 102.3 78.9 90.2 24.5 21.0 Sell Sell 2226 -13.8 1893 17.6 Persistent Systems 2,930 3.0 85.8 109.7 137.0 80.3 99.4 26.0 21.0 Accumulate Accumulate 2854 -2.6 2088 36.7 Source: Nirmal Bang Institutional Equities Research, All Prices as of close of trade 2 July 2021. . Exhibit 2: Assumptions on macro and companies 2018 2019 2020 2021 2022E 2023E Real US GDP growth 3.0 2.2 -3.5 6.6 4.1 2.3 FY19 FY20 FY21 FY22E FY23E FY24E INR/USD 70.12 70.96 74.10 74.70 76.50 77.00 USD Revenue Growth (%) FY19 FY20 FY21 FY22E FY23E FY24E TCS 9.6 5.4 0.6 15.0 10.5 9.5 Infosys 7.9 8.3 6.1 16.4 11.7 10.1 Wipro 7.5 4.2 1.5 23.4 11.9 8.8 HCL Technologies 10.1 15.1 2.4 14.0 10.9 9.8 Tech Mahindra 4.2 4.3 -1.4 10.7 11.8 11.4 Mindtree 18.3 8.7 -1.1 17.6 12.3 11.9 Persistent Systems 2.2 4.3 12.9 28.1 21.4 16.0

EBIT Margin (INR) (%)

TCS 25.6 24.6 25.9 26.1 26.5 26.5 Infosys 22.8 21.3 24.5 23.7 23.8 23.4 Wipro 17.1 17.3 19.9 18.1 18.6 19.1 HCL Technologies 19.6 19.6 21.3 20.2 20.4 20.6 Tech Mahindra 15.0 11.6 14.2 15.3 15.5 15.6 Mindtree 12.8 10.1 17.4 17.5 17.4 17.2 Persistent Systems 12.6 9.8 12.1 14.2 14.9 16.0

EPS (Rs.)

TCS 83.1 86.2 89.3 104.3 119.7 131.7 Infosys 36.0 38.9 45.5 54.6 60.5 67.6 Wipro 18.6 16.6 19.1 20.9 24.5 28.1 HCL Technologies 36.8 40.8 45.8 50.1 57.5 59.2 Tech Mahindra 48.7 45.3 49.9 64.2 72.4 81.9 Mindtree 45.8 38.3 67.4 79.0 90.9 102.3 Persistent Systems 44.1 44.4 58.8 85.8 109.7 136.9

EPS growth (%)

TCS 24.0 3.8 3.6 16.7 14.8 10.0 Infosys 10.9 8.1 17.0 19.4 11.4 11.6 Wipro 10.5 -10.4 14.9 9.4 17.3 14.5 HCL Technologies 16.9 10.9 12.4 9.2 14.9 12.1 Tech Mahindra 13.7 -7.0 10.2 28.7 12.3 13.1 Mindtree 32.3 -16.3 76.0 17.2 15.1 12.5 Persistent Systems 9.2 0.7 32.4 46.0 27.9 24.7 Source: Companies, Bloomberg, Nirmal Bang Institutional Equities Research

3 Information Technology Sector

Institutional Equities

Exhibit 3: Indian IT services sector valuations TCS Infosys Wipro HCL Tech Tech Mahindra Mindtree Persistent Year ending March March March March March March March Prices as on 2-July-21 3,325 1,568 539 985 1,089 2,583 2,930 Currency INR INR INR INR INR INR INR Market Value (Rs Bn) 12,105.3 6,574.5 2,904.1 2,629.5 1,038.8 418.7 220.4 (US$mn) 164,698 89,449 39,512 35,775 14,134 5,697 2,998

March 2023 Target Price 3,663 1667 563 1352 1441 2226 2854 Upside/(downside) 10% 6% 4% 37% 32% -14% -3% Recommendation Accumulate Accumulate Accumulate Buy Buy Sell Accumulate

FDEPS (Rs) FY20 86.2 38.9 16.6 40.8 45.2 38.3 44.4 FY21 89.3 45.5 19.1 45.8 49.9 67.4 58.8 FY22E 104.3 54.4 20.9 50.1 64.2 79.0 85.8 FY23E 119.7 60.5 24.5 57.5 72.4 90.9 109.7 FY24E 131.7 67.6 28.1 59.2 81.9 102.3 136.9 PE (x) FY20 38.6 40.3 32.4 24.2 24.1 67.4 66.0 FY21 37.2 34.5 28.2 21.5 21.8 38.3 49.9 FY22E 31.9 28.8 25.8 19.7 17.0 32.7 34.2 FY23E 27.8 25.9 22.0 17.1 15.0 28.4 26.7 FY24E 25.2 23.2 19.2 16.7 13.3 25.2 21.4 EV/EBITDA (x) FY20 30.0 29.8 21.5 15.5 15.3 39.0 44.7 FY21 27.2 23.5 17.1 12.6 12.2 24.3 31.5 FY22E 23.4 21.7 16.2 11.4 10.5 20.5 23.2 FY23E 19.9 18.6 13.5 9.9 9.1 17.7 18.3 FY24E 17.9 16.8 11.4 8.8 7.9 15.6 14.8 EV/Sales (x) FY20 8.1 7.3 4.4 3.7 2.4 5.3 6.2 FY21 7.7 6.5 4.4 3.4 2.2 5.0 5.1 FY22E 6.7 5.7 3.6 2.9 2.0 4.2 4.1 FY23E 5.8 4.9 3.0 2.5 1.7 3.6 3.3 FY24E 5.2 4.4 2.6 2.2 1.5 3.1 2.8 Pre Tax ROIC (%) FY20 55.5 43.0 32.2 33.3 28.6 33.2 35.1 FY21 54.9 45.7 35.9 33.0 32.8 62.4 57.2 FY22E 57.6 46.8 34.6 33.0 39.1 69.8 67.3 FY23E 59.9 50.4 34.9 35.3 40.6 68.1 63.4 FY24E 60.5 52.0 39.8 37.6 42.1 73.9 68.9 Source: Company, Nirmal Bang Institutional Equities Research

4 Information Technology Sector

Institutional Equities

Exhibit 4: Stock and Index Performance

Stock Performance(%) CY18 CY19 CY20 1QCY18 2QCY18 3QCY18 4QCY18 1QCY19 2QCY19 3QCY19 4QCY19 1QCY20 2QCY20 3QCY20 4QCY20 1QCY21 2QCY21 YTD TCS 44.4 14.0 32.4 8.5 29.7 18.2 (13.2) 5.6 11.3 (5.7) 3.0 (15.5) 14.0 19.7 14.9 11.0 5.3 16.9 Infosys 27.2 11.3 71.8 9.5 15.5 11.7 (10.0) 13.2 (1.6) 10.1 (9.2) (12.3) 14.7 37.0 24.6 8.9 15.6 25.9 Wipro 7.2 (0.7) 57.1 (8.7) (7.0) 23.9 1.9 2.9 10.1 (14.5) 2.5 (20.0) 11.7 42.7 23.2 7.2 31.8 41.3 HCL Tech 9.1 18.6 66.5 10.3 (4.4) 17.4 (11.9) 13.5 (2.1) 1.5 5.1 (23.2) 27.6 45.7 16.6 3.9 0.1 3.9 Tech Mahindra 43.6 6.8 27.7 28.5 2.6 13.7 (4.2) 8.7 (8.9) 1.1 6.7 (25.8) (3.9) 45.7 22.9 1.9 10.5 12.6 Persistent (9.6) 6.9 125.0 (0.5) 16.9 (2.8) (20.0) (0.1) (1.9) (7.7) 18.3 (18.3) 15.3 111.2 13.1 26.7 52.9 93.7 Mindtree 41.0 (7.4) 107.5 25.9 27.8 4.7 (16.4) 9.3 (1.8) (23.7) 13.0 3.6 11.7 44.6 24.0 25.5 24.8 56.6 Coforge 77.7 37.7 70.2 33.2 26.9 (0.1) 5.2 14.9 1.5 3.7 14.0 (27.8) 22.8 64.8 16.5 8.2 42.0 53.7 DXC (35.5) (29.0) (31.5) 5.9 (7.4) 16.0 (43.4) 21.5 (14.2) (46.5) 27.4 (65.3) 26.4 8.2 44.3 21.4 24.9 51.6 Endava - 93.0 64.7 - - - (15.4) 13.9 46.3 (5.9) 23.1 (24.5) 37.4 30.7 21.5 10.3 36.9 51.1 Cognizant (11.9) (1.4) 32.1 11.6 (0.9) (2.3) (18.4) 15.1 (12.5) (4.9) 2.9 (25.1) 22.3 22.2 18.0 (4.7) (9.9) (14.1) Accenture (9.0) 50.6 24.0 (4.0) 11.0 4.0 (17.8) 25.9 5.0 4.1 9.5 (22.5) 31.5 5.2 15.6 5.8 7.3 13.5 Globant SA 24.3 86.8 105.2 11.1 11.9 3.9 (3.7) 25.7 41.5 (9.4) 15.8 (17.1) 70.5 19.6 21.4 (4.6) 9.3 4.3 Epam Systems INC 5.9 86.0 68.9 3.6 11.5 10.8 (17.2) 48.3 2.3 5.3 16.4 (12.5) 35.7 28.3 10.8 10.7 30.9 44.9 Cap Gemini (13.1) 26.7 16.4 1.8 14.4 (5.9) (20.7) 25.8 1.2 (1.1) 0.7 (29.3) 32.4 7.7 15.5 14.4 11.6 27.8 Cyient 5.8 (33.2) 25.0 19.7 10.3 (2.8) (17.5) 5.7 (16.5) (14.2) (11.8) (44.1) 20.3 39.1 33.8 26.2 32.8 67.5 Mphasis 38.6 (8.1) 67.0 15.6 29.4 8.2 (14.4) (1.3) 1.3 (4.7) (3.6) (28.0) 32.3 57.4 11.3 15.4 20.1 38.6 LTI 57.9 1.1 109.1 22.3 24.7 14.7 (9.7) (1.6) 7.5 (17.4) 15.8 (18.4) 37.0 29.9 43.9 10.8 0.4 11.3 LTTS 66.0 (13.6) 59.3 20.7 (1.4) 42.5 (2.1) (7.5) 11.0 (12.8) (3.6) (20.9) 10.5 26.1 44.6 13.4 9.4 24.1 Intellect Design 33.7 (38.1) 127.7 (1.1) 17.1 4.9 10.1 (9.0) 30.6 (31.3) (24.2) (60.7) 105.2 100.0 41.1 134.9 (2.2) 129.8 OFSS (9.9) (25.2) 17.3 (7.8) 8.8 (3.9) (6.5) (7.5) (6.4) 0.1 (13.7) (26.1) 41.5 7.3 4.6 (0.4) 14.1 13.7 Ramco Systems (47.5) (38.8) 254.1 (32.6) (4.1) (6.1) (13.4) (13.8) (11.5) (23.1) 4.2 (56.7) 50.2 285.4 41.3 (11.7) 14.9 1.5 Just Dial (4.0) 13.7 10.8 (15.4) 25.3 (14.0) 5.2 20.1 26.1 (9.3) (17.2) (48.6) 36.9 (5.4) 66.5 36.3 11.4 51.8 Infoedge 10.8 74.0 88.1 (10.4) 0.9 20.0 2.2 26.7 22.0 (10.1) 25.2 (19.6) 35.7 31.6 30.9 (10.0) 14.8 3.3 Makemytrip (21.3) (3.0) 29.0 10.7 8.9 (24.1) (14.0) 16.9 (10.1) (8.5) 0.9 (47.8) 28.1 0.3 92.3 6.9 (1.4) 5.5 Index Performance (%) Nasdaq (2.4) 38.9 47.6 0.3 9.0 8.3 (17.6) 17.4 4.0 1.0 12.7 (10.5) 30.0 12.4 12.9 1.6 11.3 13.1 S&P 500 (7.5) 30.0 16.3 (3.1) 4.4 7.2 (14.7) 14.0 3.8 1.2 8.5 (20.0) 20.0 8.5 11.7 5.8 8.0 14.3 Stox 600 (13.7) 23.7 (4.0) (5.2) 2.9 0.9 (12.3) 12.7 1.5 2.2 5.8 (23.0) 12.6 0.2 10.5 7.7 6.2 14.4 DAX (18.7) 25.5 3.5 (8.0) 3.1 (0.5) (13.8) 9.2 7.6 0.2 6.6 (25.0) 23.9 3.7 7.5 9.4 4.5 14.4 Nikkei (12.2) 18.2 16.0 (7.7) 6.1 8.1 (17.0) 6.0 0.3 2.3 8.7 (20.0) 17.8 4.0 18.4 6.3 (1.3) 4.9 MSCI EM (16.6) 15.8 15.8 0.8 (8.0) (2.0) (8.1) 9.9 (0.3) (5.1) 11.4 (23.9) 17.3 8.7 19.3 1.9 4.6 6.7 Bovespa 15.0 31.6 2.9 9.8 (13.2) 9.0 10.8 8.6 5.8 3.7 10.4 (36.9) 30.2 (0.5) 25.8 (2.0) 9.2 7.0 HSCEI (14.5) 11.8 (3.8) 2.7 (7.7) (0.5) (9.3) 13.9 (4.4) (6.3) 9.5 (14.1) 1.7 (3.7) 14.3 2.2 (2.8) (0.7)

NIFTY IT 25.1 8.8 54.9 8.8 11.8 13.2 (9.2) 8.6 2.0 (2.5) 0.7 (18.5) 15.6 35.2 21.6 6.6 12.8 20.3 NIFTY BANK 6.4 18.6 (2.8) (4.8) 8.7 (4.7) 8.0 12.2 2.2 (6.4) 10.5 (40.5) 11.6 0.4 45.7 6.5 4.4 11.2 NIFTY FMCG 14.8 (1.4) 13.5 (1.8) 10.9 2.7 2.6 (0.7) (2.6) 5.4 (3.3) (9.3) 10.0 (0.7) 14.5 2.2 3.3 5.6 NIFTY AUTO (22.2) (10.6) 11.5 (8.7) (1.0) (10.4) (3.8) (9.6) (4.9) (5.5) 10.1 (42.6) 42.0 17.7 16.3 7.3 7.5 15.3 NIFTY ENERGY 0.6 10.7 6.4 (7.5) 0.9 17.7 (8.5) 14.7 (2.7) (3.4) 2.6 (30.1) 29.4 4.4 12.6 7.5 9.0 17.1 NIFTY PHARMA (8.0) (8.8) 60.6 (12.8) 9.8 8.7 (11.6) 6.0 (13.7) (6.4) 6.5 (10.7) 39.1 17.9 9.7 (5.0) 16.6 10.8 NIFTY METAL (21.4) (10.0) 16.2 (11.3) (2.1) 1.3 (10.7) (2.2) (2.1) (18.1) 14.8 (43.4) 25.6 12.6 45.1 22.2 31.1 60.3 NIFTY INFRA (11.8) 2.5 12.2 (7.7) (6.1) (5.1) 7.1 1.0 5.0 (4.8) 1.5 (27.5) 28.5 1.6 18.5 12.0 6.2 18.9 NIFTYMIDCAP (15.2) (3.9) 21.9 (10.6) (3.1) (5.6) 3.7 2.6 (3.3) (9.2) 6.7 (31.6) 25.6 15.5 22.7 13.7 13.8 29.4 NIFTY SMALLCAP (29.0) (8.8) 21.5 (13.6) (7.9) (14.3) 4.0 4.3 (7.1) (9.8) 4.3 (38.4) 28.4 26.2 21.7 14.5 20.0 37.3 NIFTY 3.6 12.0 14.9 (3.5) 5.9 2.0 (0.6) 7.0 1.4 (2.7) 6.0 (29.3) 19.8 9.2 24.3 5.1 7.0 12.4

USD/INR 68.5 70.4 74.1 65.2 68.5 70.1 72.1 70.5 69.5 70.3 71.4 72.4 75.9 75.9 74.8 72.9 73.8 73.3 Source: Bloomberg, Nirmal Bang Institutional Equities Research, All Prices are as of end of trade on 30 June 2021.

5 Information Technology Sector

Institutional Equities

Exhibit 5: Industry valuation sheet MCap Price EPS P/E EV/Sales P/B (US$ mn) EPS FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23

TCS 3,351 166,441 86.2 89.3 104.3 119.7 38.9 37.5 32.1 28.0 8.1 7.7 6.7 5.8 15.1 14.3 13.5 12.4 Infosys 1,581 90,593 38.9 45.5 54.4 60.5 40.6 34.7 29.1 26.1 7.4 6.6 5.7 5.0 10.2 8.7 10.0 8.4 Wipro 546 40,208 16.6 19.1 20.9 24.5 32.8 28.6 26.1 22.3 4.5 4.4 3.6 3.1 5.4 5.4 4.5 3.8 HCL Tech 985 35,893 40.8 45.8 50.1 57.5 24.2 21.5 19.7 17.1 3.7 3.4 2.9 2.5 5.2 4.3 3.9 3.5 Tech Mahindra 1,097 14,275 45.5 50.2 64.6 72.9 24.1 21.9 17.0 15.0 2.4 2.2 2.0 1.7 4.4 3.8 3.4 3.1 Persistent 2,980 3,021 44.4 58.8 85.8 109.7 67.2 50.7 34.7 27.2 6.3 5.2 4.2 3.4 9.6 8.2 7.1 6.1 Mindtree 2,598 5,761 38.3 67.4 79.0 90.9 67.8 38.5 32.9 28.6 5.4 5.0 4.2 3.6 13.6 9.9 8.4 7.2 Coforge 4,157 3,388 73.1 76.1 109.4 131.9 56.9 54.6 38.0 31.5 5.8 5.3 4.0 3.4 11.0 10.1 8.7 7.3 DXC 39.0 9,948 2.4 3.5 4.3 5.1 16.3 11.1 9.1 7.6 0.8 0.8 0.7 0.5 1.9 2.0 1.9 1.7 Endava 116 6,373 0.9 1.2 1.5 1.8 128.9 96.7 77.3 64.4 13.0 10.1 7.8 6.3 29.6 22.3 18.1 14.8 Cognizant* (US$) 70 37,140 3.6 4.0 4.4 4.8 19.4 17.5 15.9 14.6 2.1 1.9 1.8 1.6 3.4 3.0 2.5 2.1 Accenture (US$) 296 188,262 7.7 8.8 9.9 10.8 38.4 33.6 29.9 27.4 4.1 3.6 3.2 3.0 11.8 9.7 8.6 7.1 Cap Gemini* (Euro) 162 32,502 6.5 7.6 8.7 9.9 24.9 21.3 18.6 16.4 2.1 1.8 1.7 1.5 4.2 4.0 3.5 3.1 Globant (US$) 227 9,419 2.4 3.4 4.0 4.6 94.6 66.8 56.8 49.3 11.4 7.9 6.4 5.3 10.8 8.9 7.6 6.5 Epam (US$) 519 29,286 6.3 7.7 9.6 12.3 82.4 67.4 54.1 42.2 10.7 8.1 6.4 5.1 15.2 12.2 9.8 7.7 Cyient 860 1,273 37.6 33.2 41.5 49.9 22.9 25.9 20.7 17.2 2.0 2.1 1.8 1.6 3.5 3.4 3.1 2.8 Mphasis 2,134 5,372 60.4 65.8 76.7 88.0 35.3 32.4 27.8 24.3 4.4 4.0 3.5 3.0 7.2 6.4 5.7 5.2 eClerx 1,938 910 57.6 77.0 99.1 106.1 33.6 25.2 19.6 18.3 4.7 4.0 2.9 2.5 5.4 4.7 3.9 3.5 LTI 4,071 9,570 86.2 107.8 126.2 145.7 47.2 37.8 32.3 27.9 6.4 5.6 4.8 4.1 12.7 10.7 8.4 7.0 LTTS 2,903 4,102 78.7 63.7 83.6 99.7 36.9 45.6 34.7 29.1 5.5 5.4 4.6 3.9 10.3 9.4 7.7 6.5 Intellect Design 724 1,302 1.4 19.1 25.4 32.4 517.1 37.9 28.5 22.3 7.2 6.4 5.6 4.9 9.1 7.3 5.5 4.4 OFSS 3,652 4,229 188.5 204.7 214.8 237.0 19.4 17.8 17.0 15.4 2.4 5.4 5.0 4.6 5.7 4.7 4.5 4.3 Just Dial 961 805 38.2 35.1 32.0 43.5 25.2 27.4 30.0 22.1 4.6 7.0 6.0 4.8 5.3 4.4 4.1 3.6 Infoedge 4,916 8,514 26.1 9.7 31.8 42.9 188.4 506.8 154.6 114.6 46.1 53.4 40.3 34.2 23.9 26.1 11.2 10.4 Makemytrip (US$) 31 3,242 -0.6 -0.4 0.1 0.2 -51.7 -77.5 310.0 155.0 16.9 8.7 4.8 3.2 2.7 4.0 4.2 4.3 Genpact* 45 8,510 2.1 2.3 2.6 3.0 21.4 19.6 17.3 15.0 2.5 2.4 2.1 NA 4.8 4.4 3.5 2.5 WNS 81 4,002 2.7 3.1 3.6 4.1 30.0 26.1 22.5 19.8 4.1 3.7 3.2 2.6 6.2 5.7 4.9 3.3 EXLS* 107 3,580 3.5 4.2 4.4 4.9 30.6 25.5 24.3 21.8 3.7 3.4 3.1 NA 5.3 4.6 4.1 NA Source: Bloomberg, Nirmal Bang Institutional Equities Research, All Prices are as of end of trade on 30 June 2021

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Institutional Equities

1QFY22 results preview – Good revenue growth and order inflow likely After 2-3 quarters of scorching QoQ growth in FY21, we think 1QFY22 will also be quite strong, reflecting the strong order inflow seen in FY21, quick revenue conversion and seasonality. The range of growth for the coverage universe in CC terms (QoQ) will be 2-7.5%. On margins, we believe the second round of wage hikes within 6-9 months will affect some companies in 1QFY22 and for others in 2QFY22, but much of the negative impact would be largely countered later in the year. We expect order inflow to be strong. With Accenture reporting 39% YoY growth in its TCV in its latest quarter, which largely coincides with 1QFY21, we think the street will not settle for anything less than a double-digit growth over last year’s TCV numbers. Whether the deal pipeline continues to get refilled despite strong deal wins is a key monitorable. We think Infosys will likely raise its current revenue growth guidance only after 2QFY22. HCLT may decide to give a specific guidance to instill confidence in investors. There has been less news around ‘mega deals’ in 1QFY22 compared to 4QFY21. However, recent management commentary at investor conferences as well as performance by peers make us comfortable that the demand environment remains strong. Exhibit 6: 1QFY22 results summary Rs (mn) Revenues EBIT EBIT Margin (%) PAT USD QoQ Growth QoQ Growth Companies 1QFY22E YoY (%) QoQ (%) 1QFY22E YoY (%) QoQ (%) 1QFY21 4QFY21 1QFY22E 1QFY22E YoY (%) QoQ (%) (mn) CC (%) USD (%) TCS 6,175 4,55,703 18.9 4.3 3.0 3.1 1,15,837 28.0 -1.3 23.6 26.8 25.4 90,498 29.1 -2.1 Infosys 3,756 2,77,183 17.1 5.3 4.2 4.0 69,133 28.9 7.3 22.7 24.5 24.9 57,298 35.4 12.9 Wipro 2,341 1,78,613 19.8 9.9 9.1 8.7 32,753 21.6 -4.1 18.1 21.0 18.3 28,020 17.2 -5.7 HCL Tech 2,750 2,02,937 13.7 3.3 2.0 2.0 41,475 13.3 4.2 20.5 20.3 20.4 32,223 10.2 35.0 Tech Mahindra 1,361 1,00,477 10.3 3.3 2.5 2.4 14,253 55.4 -11.1 10.1 16.5 14.2 12,767 31.3 18.1 Mindtree 302 22,292 16.8 5.7 4.8 4.8 4,022 53.3 2.8 13.7 18.6 18.0 3,184 49.5 0.3 Persistent 164 12,119 22.2 8.8 7.5 7.4 1,604 55.9 9.5 10.4 13.2 13.2 1,425 58.4 3.5 Source: Companies, Nirmal Bang Institutional Equities Research 1QFY21 - Company notes – Points to focus on TCS  While TCS is aspiring for double-digit growth in FY22, greater clarity is required whether it could meet the mid-teen growth that market has priced in. Some color on QoQ growth for the rest of FY22 would be one of the key monitorables.  How much of an impact has the second covid wave had on India and regional markets and on overall growth. How much of this could be recouped going into 2QFY22 and 2HFY22.  TCV of order inflow is a key monitorable to gauge the pace of growth in 2HFY22 and beyond. While the deal flows could be volatile across quarters, any material weakness could be looked at with concern. Especially on raised expectations post Accenture’s blockbuster 39% growth YoY in 3QFY21. 1QFY21 had a TCV of US$6.9bn.  Nature of revival in stressed sectors of Travel, Tourism, Hospitality, Aerospace and Auto Manufacturing.  Extent of impact on margins from the company-wide salary hike that was given starting 1QFY22.  Greater color on the progress that the company is making in becoming the ‘growth and transformation’ partner of choice of its customers.  Whether the ‘war for talent’ is having any impact on the industry-best attrition rate and what that could mean for margins going ahead. Infosys  With large deals of total TCV of US$14.1bn in FY21 (58% higher YoY), a greater part of which was net new, we expect a translation into >15% revenue growth, higher than the guidance of 12-14% in CC terms. However, we believe Infosys will wait for another quarter before raising the guidance.  With record large deals won in FY21, we would seek management’s commentary on the strength of the pipeline and also the quarter’s TCV. Last year, it was at US$1.7bn. We are expecting growth of TCV in the teens.  Extent of margin dilution from some of the large deals won in FY21.

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 We would watch out for commentary on verticals like Communications and EURS (Energy, Utility, Resources and Services), which dragged down Infosys’ performance in FY21.  With attrition rate at 15.2% in 4QFY21, highest compared to its competitors like Wipro and TCS, we would watch commentary on the impact of the same on talent costs and on margins.  Market would watch for hints as to where Infosys would land up within the margin guidance of 22-24% that it has given for FY22. HCL Tech  The CEO at one of the investor conferences had stated that delivery was affected because of the second covid wave due to likely higher level of absenteeism among its employees. We have accounted for this in our estimates for the quarter, assuming that the hit was at ~1%.  We expect HCLT to give a specific guidance on revenue growth for FY22 compared to the ‘double-digit’ growth guidance given by it at the start of the year as market had got used to specific guidance from HCLT and lack of it generates nervousness on the street.  While Product & Platforms (P&P) business saw growth of ~10.5% (YoY) in the last 3 quarters of FY21 (comparable period due to IBM product acquisitions), it is expected to see deceleration to low single-digit growth in FY22 as HCLT is discontinuing a couple of products (out of 20). This commentary has put pressure on the stock. We need to see whether there is any upgrade to the low single-digit growth rate that was given for the P&P business.  There has also been some media articles about IBM going off the domino email system end of June 2021 as part of the sale agreement with HCL Tech. The transition out of it has apparently adversely impacted IBM quite a bit. While IBM was not paying for the mail software, we need to see if it has taken this on for an additional period of to conclude the transition properly.  After a tepid FY21, revival in the Engineering Services business will be keenly watched. However, HCLT did indicate that it would invest ~100bps extra among other things in bolstering its Digital Engineering capabilities. We are curious to know what exactly these are going into as HCLT is already a leader in ER&D Services. Wipro  The company had a significant management restructuring with a large number of top managers replaced or removed in 2H2020. It needs to be seen if the new leadership team, with far greater local flavor and supposed greater client focus and intimacy, will be able to pull off bigger deal flow compared to that seen in the past.  A healthy large deal flow is critical to sustain the premium valuation that the stock has commanded in recent days in expectation of a pick-up in revenue growth after delivering below industry growth for each of the last 10 years. We think that the number has to be US$1.5bn plus per quarter.  The Capco acquisition was consummated in the quarter a bit earlier than expected and one needs to see commentary on the early synergies seen, especially on the revenue side.  Wipro’s QoQ growth for 1QFY22 was raised from the earlier guidance of 2-4% to 8-10% (including the Capco acquisition). We were building in QoQ organic growth of 3% in CC terms.  We expect the company to guide for ~6% QoQ growth in 2QFY22, including one extra month of Capco and one full quarter of Ampion, besides a 2.5-3% organic growth.  We expect margins to remain under pressure largely due to the Capco acquisition, but should otherwise be flat for the organic business. We will watch out for the management commentary on the same. Tech Mahindra  Tech Mahindra’s (TML) net new deal flow was strong at ~US$1bn in 4QFY21 (against average of ~US$390mnin in the first three quarters of FY21). A broad repeat has been signaled for 1QFY22, backed by the highest order pipeline involving digital transformation work at both Enterprises and Telcos and 5G related work. We need to see if the company delivers on this as it is critical for its double-digit organic growth guidance for FY22.  A reasonable bit of growth in 1QFY22 will be inorganic in nature as it has done a few small acquisitions in 4QFY21.  1QFY22 would see salary increase in TML and one needs to see to what extent they affect margins.

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Institutional Equities

 TML has maintained its 15% EBIT margin guidance while the revenue growth guidance has also been raised to double digits compared to the high single digit number earlier on the back of stronger growth in the Communications vertical (40% of revenue), driven by 5G related work (direct and indirect).  Progress in 5G related demand in the market from Telcos and Enterprises.  We would watch out for commentary on progress in legacy modernisation deals from US telcos.  Would look out for any updates on the Open Ran relationships that it has with Rakuten and Mavenir. Mindtree  We would track progress of the Travel, Tourism and Hospitality (TTH) vertical, a key area of strength for MTCL during normal times, which had contracted quite dramatically post Covid-19 and had made steady improvement in the recent quarters on the back of repeal of discounts. With US and European markets opening up for travel & tourism in a big way, we expect to see big spends by customers on IT.  One of the disappointing aspects of the results thus far has been the order inflow (12% growth for FY21). For a company of its size and given high expectations on growth built into the stock price, it needs to show an above-trend pick-up in order inflow.  We would also seek clarity on sustainability of margins, for which improvements were largely SGA driven.  MTCL was focusing on reducing client concentration and is looking to grow the other Top 10 accounts apart from its biggest client – Microsoft. We will watch for progress on the same.  How the largest account Microsoft is faring as it has been a very big driver of growth in the last 24 months. Persistent  The extremely sharp run-up in its stock price towards the end of June’21 is reflective of the market’s expectation of significantly above industry-leading revenue and profit growth in FY22.  A mid-high single digit QoQ revenue growth is very critical for the stock to sustain at current levels. That should be combined with some modest margin improvement.  We expect most of this growth to be driven by services while keeping IP revenue constant QoQ. There is possibility of a seasonal pick-up in the June quarter from the IP part of the business, which has not been factored into our estimates.  We have kept margins flat on a QoQ basis and should benefit from lower amortization by ~50bps, countered by higher employee-related expenses. The company-wide salary hike will be in the quarter starting July.  Deal wins would be a key focus as the company has formed specific teams for large deals and has been delivering US$200mn plus TCV every quarter. PSYS is building muscle in various areas like sales, delivery, large deals team etc. by hiring people who have specific expertise to continue this trend.  We will look out for outcome on the steps taken to improve profitability in the Alliance business (largely IBM related) and the growth there.  PSYS will convert its IBM reseller business from gross revenue basis to net revenue basis, which would affect margins positively. We will look out for commentary on the same.

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Institutional Equities

Improving visibility into double-digit growth in FY23; Raise target prices; Maintain neutral stance

Demand: Higher than pre-pandemic growth likely even in FY23/FY24 Post a likely mid-teen USD revenue growth in FY22 for most Tier-1 India heritage players, we see greater visibility of very low double-digit or very high single digit growth (higher than in 3/5 year period pre-pandemic) in FY23 and FY24 (Exhibit 7). The visibility on ~10% USD organic revenue growth in FY23 has improved, especially based on (1) The performance and commentary of Accenture in its recent quarterly results (Improved visibility) (2) Commentary of India company CEOs in the recent investor conferences and (3) Expectation of strong growth in cloud software sales continuing into the foreseeable future. From a top down perspective, the sustained strong demand has come because of (1) unprecedented monetary and fiscal policy support in the developed markets(2) improving revenue and profit performance by developed market corporates, reflected in S&P 500 stats (3) greater tech intensity in customers’ operations (4) total addressable market (TAM) expansion as customers are looking up to their key IT services vendors to provide them more value beyond just IT services..

Exhibit 7: Revenue and earnings growth rates accelerating while EBIT margins are resilient FY19 FY20 FY21 FY22E FY23E FY24E USD Revenue Growth (%) TCS 9.6 5.4 0.6 15.0 10.5 9.5 Infosys 7.9 8.3 6.1 16.4 11.7 10.1 Wipro 7.5 4.2 1.5 23.4 11.9 8.8 HCL Technologies 10.1 15.1 2.4 14.0 10.9 9.8 Tech Mahindra 4.2 4.3 -1.4 10.7 11.8 11.4 Mindtree 18.3 8.7 -1.1 17.6 12.3 11.9 Persistent Systems 2.2 4.3 12.9 28.1 21.4 16.0

EBIT Margin (INR) (%)

EPS growth (%)

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Institutional Equities

Exhibit 8: There is clear revenue and profit acceleration in FY21-FY24 compared to FY15-FY20. Margins are expected to be sticky at FY21 levels. USD Revenue Growth EBIT Growth PAT growth EBIT Margin

FY15-FY20 FY21-FY24 FY15-FY20 FY21-FY24 FY15-FY20 FY21-FY24 FY15 FY20 FY21 FY24

TCS 7.4% 11.7% 8.7% 14.1% 8.3% 13.5% 26.9% 24.6% 25.9% 26.5% Infosys 8.0% 12.7% 7.0% 12.4% 6.1% 13.6% 25.9% 21.3% 24.5% 23.4% Wipro 3.1% 13.0% 2.1% 13.0% 2.4% 12.7% 20.2% 17.3% 19.9% 19.1% HCLT 10.8% 11.6% 10.9% 11.7% 8.8% 12.1% 22.3% 19.6% 21.3% 20.6% Tech Mahindra 7.2% 11.3% 4.1% 16.1% 9.0% 18.0% 15.6% 11.6% 14.2% 15.6% Mindtree 13.3% 13.9% 5.3% 15.1% 3.3% 14.9% 17.1% 10.1% 17.4% 17.2% Persistent 10.2% 21.7% 2.0% 35.4% 3.2% 32.6% 15.7% 9.2% 12.1% 16.0% Aggregate 7.4% 12.2% 7.4% 13.4% 7.0% 13.6% 23.6% 20.5% 22.7% 22.6% Source: Companies, Nirmal Bang Institutional Equities Research Global economic picture has substantially improved in the last 6-9 months The economic growth picture has been improving through a large part of 2020 and 1HCY2021. US GDP growth for instance is now expected to be ~6.6% in 2021 and ~4.1% in 2022 compared to the expectation that the market had in Sept’2020 (3.7% and 2.8%, respectively). This is despite this growth being on a higher base of 2020 than was expected in Sept’2020. Exhibit 9: Global growth estimates: Expectation in Sept’2020 Real GDP Growth 2018 2019 2020E 2021E 2022E World 3.6 2.9 -3.9 5.1 3.5 US 3.0 2.2 -5.0 3.7 2.8 Europe 2.0 1.5 -8.0 5.6 2.6 UK 1.4 1.5 -9.9 6.4 2.2 China 6.7 6.1 2.0 8.0 5.5 Japan 0.3 0.7 -5.3 2.5 1.3 Source: Bloomberg

Exhibit 10: Global growth estimates: Expectation in June 2021. Growth rate in 2021 and 2022 higher despite a higher base Real GDP Growth 2018 2019 2020 2021E 2022E World 3.6 2.8 -3.3. 6.0 4.5 US 3.0 2.2 -3.5 6.6 4.1 Europe 2.0 1.6 -6.0 4.7 4.4 UK 1.4 1.5 -10.1 6.7 5.4 China 6.7 6.0 2.3 8.5 5.5 Japan 0.6 0.0 -4.7 2.6 2.4 Source: Bloomberg The strong economic growth has been driven by loose fiscal policies on top of already loose monetary policies as can be seen from Exhibits 11 and 12. For instance, the asset purchases by G3 central banks in the first six months of 2021 has already outstripped that of 2009. Of course, the monetary stimulus in 2020 has been unprecedented, the scale of which has never been attempted in the last 70 years. All of this will lead to significant increase in consumer spending in 2021 and growth in both residential and non-residential investments in the US. Also, nations like US, China and Japan have embarked on higher infra spending, which will reflect in higher revenue and profit for many global corporations. This is reflected in the increase in both revenue and profit of S&P 500 constituents in both 2021 and 2022. Already, 2020 has been better than earlier expectations. While some may argue that this growth is unsustainable and that the stimulus has resulted in all sorts of asset bubbles (and we agree with them), we think this situation will stay for the next 12 months at the least - unless a

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Institutional Equities

nasty inflation shock hits us. However, the pandemic-driven shift in both individual and corporate operating behaviour will last much longer and is structural in nature, and would induce greater level of IT spending. Exhibit 11: Monetary stimulus: Asset purchases by G3 central banks have been unprecedented

(US$ bn) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 -1,000

-2,000

2008 2021 2006 2007 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ECB US Fed Bank of Japan

Source: G3 Central Banks, Nirmal Bang Institutional Equities Research Exhibit 12: Fiscal stimulus measures in the US since the pandemic started in 2020 Legislation CARES Act Consolidated Appropriations Act American Rescue Plan Signed into law 27-Mar-20 27-Dec-20 11-Mar-21 Direct payment/Economic Impact payment $293 billion ($1,200) $166 billion ($600) $402 billion ($1,400) Unemployment $268 billion ($600) $120 billion ($300) $206 billion ($300) Small business $377 billion $325 billion $54 billion Community development $5 billion $12 billion $362 billion Transportation $71 billion $45 billion $43.2 billion Vaccine develop/distribute $28 billion $69 billion $93 billion Schools $31 billion $82 billion $176 billion Rent assistance $17 billion $25 billion $21.6 billion Nutrition & Agriculture $25 billion $26 billion $22.7 billion U.S. Postal Service $10 billion (loan) $10 billion (loan forgiveness) $570 million (paid leave) Child Care $5 billion $10 billion $40 billion Broadband $25 billion $7 billion $7 billion plus Coronavirus Relief Fund $150 billion Extended to 12/31/21 Employee Retention Credit $55 billion Extended to 6/30/21 Extended to 12/31/21 Lookback for Earned Income Tax credit / Child Tax credit Created Expanded Total appropriations $2.2 trillion $910 billion $1.9 trillion Source :Investopedia, Government sources.

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Institutional Equities

Exhibit 13: A significant pick-up in consumer spending, residential and non-residential investment is leading US recovery in 2021 %YoY 2020 2021E Real GDP -3.5 6.6 Real consumer spending -3.9 8.1 Residential Investment 6.1 16.3 Non-residential investment -4.0 8.8 Inventory change -77.4 -9.5 Total government spending 1.1 1.5 Exports -12.9 4.2 Imports -9.3 13.9 Source: The Conference Board.

Exhibit 14: Major economies are spending big on infrastructure Country Infra spending (US$bn) % of GDP US 2000 9.6 China 1000 6.8 Japan 400 7.9 Source: Press reports, IMF, Nirmal Bang Institutional Equities Research

Stimulative macro policies leading to better corporate performance A look at Exhibit 15 indicates that market has raised estimates on revenue, earnings and cash flow for S&P 500 companies over the last 6-9 months. So, there is not only an imperative to invest in technology due to the pandemic, there is also an ability to do so. A look at the estimates of the technology sector in Exhibit 16 indicates that it has been among the only two sectors (other being healthcare) during 2020 that has remained immune to a decline in sales! That is also reflected in the Gartner commentary on tech spends in 2020 and in 2021. Gartner estimates on tech spend have consistently seen a rise over the last few quarters. Part of this has flowed into the market conditions that the Indian companies have experienced and has been reflected in the results and order inflow numbers. The decline in tech spend in 2020, which was projected to be fairly steep by Gartner in July 2020 (~7%), has actually not played out that way – there was only a ~2% decline (Exhibits 18-20)

Exhibit 15: S&P 500 per share data – consensus expectations have significantly improved over the last 9 months In September 2020 In June 2021 Difference (%age) 2020 2021 2022 2020 2021 2022 2020 2021 2022 Sales 1323 1426 1522 1328 1481 1578 0.4 3.9 3.7 EBITDA 246 288 321 222 317 348 -9.7 10.1 8.4 EPS 130 165 193 138 195 212 6.0 18.0 9.8 Cash Flow 193 244 274 204 258 292 5.8 5.8 6.6 Source: Bloomberg, Nirmal Bang Institutional Equities Research

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Institutional Equities

Exhibit 16: Bottom-up revenue growth expectation of sell-side analysts on various sectors in S&P 500 indicate that technology revenue has held up quite well in 2020 and is expected to grow faster than previously expected. Estimates in June 2021

Source: Refinitiv

Exhibit 17: S&P 500 revenue growth estimates as of September 2020

Source: Refinitiv

Tech spending projections bode well for Indian IT in 2021 and 2022 In the midst of a supportive macro environment and a shift to Digital, we have seen IT spending more resilient than even industry research firms had anticipated at the beginning of the pandemic. The strong monetary and fiscal support and the consequent strong economic growth that it has powered and finally the digital shift the pandemic has forced has all driven up revisions in IT spend estimates of Gartner – an IT industry research firm - as you can see below in Exhibits 18-20. Interestingly, enterprise software is expected to not only deliver strong growth in 2021 but hold up in 2022 also. And, IT services spend, which saw only a modest decline in 2020, will see a sharp pick-up in 2021 and sustain in 2022 too. With market itself expected to grow by ~double digits in both 2021 and 2022, we think double digit rate of growth for the India heritage players is realistic in FY22 and FY23.

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Institutional Equities

Exhibit 18: Worldwide IT spending forecast in July 2020 (in US$mn) at one point indicated a fairly steep decline 2019 Spending 2019 Growth (%) 2020 Spending 2020 Growth (%) Data Center Systems 210,053 0.6 188,365 -10.3 Enterprise Software 476,687 11.7 449,506 -5.7 Devices 711,525 -0.3 596,914 -16.1 IT Services 1,040,263 4.8 969,438 -6.8 Communication services 1,372,236 -0.6 1,326,492 -3.3 Total 3,810,764 2.3 3,530,714 -7.3 Source: Gartner (July 2020)

Exhibit 19: Worldwide IT spending forecast in October 2020 (in US$mn) 2019 Spending 2019 Growth (%) 2020 Spending 2020 Growth (%) 2021 Spending 2021 Growth (%) Data Center Systems 214,911 1.0 208,292 -3.1 219,086 5.2 Enterprise Software 476,686 11.7 459,297 -3.6 492,440 7.2 Devices 711,525 -0.3 616,284 -13.4 640,726 4.0 IT Services 1,040,263 4.8 992,093 -4.6 1,032,912 4.1 Communications Services 1,372,938 -0.6 1,332,795 -2.9 1,369,652 2.8 Overall IT 3,816,322 2.4 3,608,761 -5.4 3,754,816 4.0 Source: Gartner (October 2020)

Exhibit 20: Worldwide IT spending forecast in April 2021 (in US$mn) 2020 2021 2022 2020 Spending 2021 Spending 2022 Spending Growth (%) Growth (%) Growth (%) Data Center Systems 219,940 2.3 236,806 7.7 247,513 4.5 Enterprise Software 466,647 -2.1 516,872 10.8 571,725 10.6 Devices 663,223 -6.9 755,798 14.0 778,949 3.1 IT Services 1,021,187 -1.8 1,112,626 9.0 1,193,461 7.3 Communications Services 1,386,471 -0.7 1,450,444 4.6 1,504,743 3.7 Overall IT 3,757,468 -2.2 4,072,547 8.4 4,296,391 5.5 Source: Gartner (April 2021)

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Higher tech intensity will be the structural driver of growth The key takeaway from the Nascom-Mckinsey 2021 study on the Indian IT industry (defined in a much more broader sense than just IT services providers) is that it will likely grow at ~10% CAGR compared to the ~7.5% CAGR in the last 5 years. The global tech spend as a percentage of GDP was 4.5% in 2010 and 5.5% in 2020. This is expected to increase by 200bps to 7.5% by 2030 i.e. US$2trn incremental spending on technology. According to Mckinsey, acceleration for the Indian IT players flows down from a higher global services spend growth of 5% CAGR over 2020-2025 vs the 3% CAGR seen in 2015-2020. This is driven by higher tech intensity in enterprises, which is reflected in their IT spend-to-revenue ratio rising from 3% in 2020 to 5% in 2030. This gels with the narrative that we hear from both, the consumers of technology as well sellers or service providers. The general refrain is that more and more corporate activity and functions have become technology infused. While cloud and other digital services are expected to grow in the 15-25% range over 2020-25, the traditional services are expected to decline at an accelerated pace of 8-10% (against 3% CAGR decline over 2015-2020). BPM is expected to grow at a steadier pace of 4-6%.

Digital natives and re-inventors to drive the spend Clients who are tech natives and who are already spending 6% of their revenue on IT in 2020 are expected to increase this to 8% in 2030. Digital re-inventors will move this number from 4% in 2020 to 6% in 2030 whereas incumbents will see no change at 3%. While tech native customers may have their own significant internal teams, we see them taking support from external parties to buttress their internal efforts for faster time-to-market. This is actually reflected in strong growth seen by the entire Indian IT services industry from its Hi-Tech clients (many of which would be in the tech native category) ever since the pandemic started. We think they will be key drivers even going forward. We think it is in the digital re-inventors and incumbents space that Indian IT service providers will have the largest opportunity as these customers navigate the post-pandemic digital reality. Exhibit 21: Global enterprise & consumer spending on technology (as % of GDP) Year % of GDP 2010 4.5 2020 5.0 2030E 7.5 Source: Nasscom-Mckinsey Study 2021 Exhibit 22: Enterprise tech intensity - Average tech spend as % of revenue 2020 2030E

Tech Natives 6.0% 8.0% Digital re-inventors 4.0% 6.0% Incumbents 3.0% 3.0% Source: Nasscom-Mckinsey Study 2021

Mckinsey is of the view that bulk of the IT spending in the coming 10 years will be driven by Tech natives and digital re-inventors, who would account for 75% of the tech spend by 2020. Also, these would form a larger number within the global 2000 corporate set in the next 10 years displacing some of the less tech-savvy incumbents. The implication for service providers is that the opportunity set would be different for them in the coming 10 years. Companies would have to rethink which segments they should focus on and which services they should offer to their clients and how these should be offered. This is reflected in its advice to Indian IT services providers given in Exhibit 25

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Exhibit 23: 2x number of Tech Natives and Digital Re-inventors by 2030 within the global 2000 set 2020 2030E Classic Incumbents 1400 800 Digital Re-inventors 500 900 Tech Natives 100 300 Source: Nasscom-Mckinsey Study 2021

Exhibit 24: 75% of tech spend driven by tech Natives and Digital Re-inventors in 2030E 2020 2030E Classic Incumbents 50% 25% Digital Re-inventors 40% 50% Tech Natives 10% 25% Source: Nasscom-Mckinsey Study 2021

Vendors will have to make that shift in capabilities, type of customers they address and the kind of employees they recruit/retain. We believe that most of the companies in our coverage universe are already executing many of these strategies and are individually at various stages of the journey.

Exhibit 25: Strategies that need to be adopted by Indian IT services players in the new world

Re-think ‘where to play’ Leverage new sources of Innovate on operating Build new service line Re-organize to serve in the new strategic differentiation to win model & win the war for catalogue competing ecosystem gameboard Digital 2.0 wave next-gen talent

• Invest in new sources of • Create integrated • Create platform based • Set-up an operating • Define the new normal growth: new accounts offerings for DTX & offerings to differentiate model to partner with for delivery (incl. home- (e.g. Tech natives), ecosystem and invest in competing at scale cloud shoring, near-shoring , % regions (e.g. Asia), micro critical skills & IP • Drive programmatic providers while serving gig workforce, verticals (e.g. healthcare) M&A to rapidly expand the clients seamlessly automation) • Invest in building light capabilities & skills digital • Tailor propositions and house reference cases 2.0 • Build capabilities to drive • Accelerate re-skilling for sales coverage to serve for at-scale DTX & growth on the back of digital 2.0 skills (e.g. new clients ecosystem transformation partnership led offerings cloud engineer, AI & GTM specialist) and strengthen EVP to attract new talent

Source: Nasscom-Mckinsey Study 2021

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Digital and cloud services will drive growth in the next 5 years Within Digital, Cloud, Customer experience and Data analytics are the key areas that have seen a lot of traction in recent years and this will continue in the foreseeable future. As one moves from a traditional infrastructure to a cloud-based infrastructure, the managed services intensity is expected to reduce by 50-60%. Traditional services are expected to contract by 8-10% CAGR over the next 5 years. This is already happening to core services if one goes purely by numbers of Infosys. Cloud hyperscalers will have an outsized impact on the industry in the medium term, according to Mckinsey, and they could directly or indirectly influence 40-50% of the services revenue pool. Already many of the Indian IT service providers have pivoted to this opportunity in an aggressive way. While ‘Cloud’ has been around for almost a decade, it is only in the last 12-24 months that the Indian players have put up independent units around AWS, Azure, GCP and IBM Hybrid Cloud and made investments in branded platforms, IP, industry-specific solutions and go-to-market teams (GTM).

Exhibit 26: Digital & Cloud services expected to be US$600-700bn opportunity 2020 Offering Category 2025 US$bn CAGR US$bn

Cloud Consumption Iaas Consumption 200-250 500-550 15-20% Saas&PaaS consumption Cloud Services Cloud Integration and Platform Services 145-160 300-350 15-18% Cloud Application Services Digital Services Analytics and AI/ML, Cyber Security MS 20-25% 110-135 350-380 Experience, UI/UX, Horizon 3, Digital PES Traditional Services ADM, Engg and Testing Infrastructure Managed Services 500-540 320-350 (8-10)% Traditional tech Consulting BPM Services Traditional BPM 150-170 180-220 4-6% BPaaS and Analytics Source: Nasscom-Mckinsey Study 2021 ‘As a service’ demand is projected to show strong growth While customers had embarked on Digital transformation journeys at varying speeds in the past, Covid-19 has significantly accelerated this process. Early digital adopters among its clients want to invest to maintain or increase their lead vis-à-vis peers while the digital laggards want to leapfrog. Moving to Digital has become a question of survival and maintaining customer relevance. Within Digital, based on industry commentary, there seems to have been significant demand for Cloud-based software and services, Digital workplace related services, collaboration, cyber security and e-commerce.

Digital spending, in our view, has a lot of headroom for growth if one goes by industry analyst estimates (see Exhibit 27), especially in the ‘as a service’ format. Public Cloud related spending will be a strong growth area for at least the next 5 years, with a common refrain that corporates have only moved 20%-30% of their workload to the cloud. Hybrid Cloud (mix between on-premise, private and public clouds) and Multi Cloud (AWS vs Azure vs Google Cloud vs something else) are the key areas of spending in the foreseeable future. Within cloud spending, Software as a service (Saas), Infrastructure as a service (Iaas) and Platform as a service (Paas) are the key sub-segments and each of them have healthy growth ahead, based on IDC numbers. In many of these areas, systems integrators have a big role to play. The services opportunity typically indicated to be 3x-4x of the software opportunity from a lifetime perspective.

The other parameter that is working in favor of systems integrators is the rather fragmented market shares in Saas and in Paas while Iaas seems to be a lot more consolidated. Fragmentation means there is need for more systems integration as the technologies involved are many. Also, a look at Exhibit 41 tells you that in many areas where Indian IT companies can claim a big share, like in ERP or Supply Chain or Engineering, cloud adoption is still at a nascent stage and there is headroom for growth going ahead. A comparison between

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projection made by IDC for the size of the ‘as a service market’ in 2020 and actuals indicates that actuals have been better (by ~17%, Exhibits 31-32). And, this has been driven by greater growth in Saas. Latest quarter data for AWS, Azure and GCP indicates that growth is fairly strong at 32%, 50% and 46% YoY respectively. So, the 20% CAGR growth expectation over 2020-2024 by industry analysts for the ‘as a service’ market is reasonable, in our view. The largest Saas player – Salesforce - has publicly put out a target of US$50bn in revenue by FY26 (January YE) from US$21.1bn in FY21 (including revenue from the recently acquired entity Slack), which represents a CAGR of ~19%. This does not look outlandish in the context of the growth of the market that industry analysts are predicting.

Exhibit 27: ‘As a service’ demand projections in US$bn: 20% CAGR likely in the next 4 years. CAGR

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014-2020 2020-2024

Saas 53 65 81 101 122 148 164 184 210 242 277 21% 14% Iaas 8 12 17 24 35 49 66 86 111 141 177 42% 28% Paas 6 8 12 18 25 36 41 47 59 77 100 38% 25% Total 67 85 110 143 182 233 271 317 380 460 554 26% 20% Source: IDC, Bloomberg

Exhibit 28: AWS, the pioneer in cloud, continues to deliver strong growth

(%) AWS YoY % growth reported

60.0 55.1

50.0 47.0 42.9 40.0 36.5 32 29.5 30.0

20.0

10.0

0.0 2016 2017 2018 2019 2020 Latest Quarter

Source: Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 29: Azure growth over the quarters has been very strong and is bridging the gap with AWS

(%) Azure YoY % growth reported 140 116 120 93 93 97 98 93 100 90 89 76 76 73 80 64 59 62 59 60 47 48 50 50 40 20

2QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 1QFY20 3QFY20 1QFY21 3QFY21 3QFY17 4QFY19 2QFY20 4QFY20 2QFY21 1QFY17 Source: Bloomberg, Nirmal Bang Institutional Equities Research

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Exhibit 30: Google cloud has been trying to catch up with AWS and Azure

(%) GCP YoY % growth reported 60.0 52.8

50.0 46.4 46.0 43.9

40.0

30.0

20.0

10.0

0.0 2018 2019 2020 Latest Quarter

Source: Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 31: 2020 actual public cloud spending has been better than analyst estimates

2020 Public Cloud Spending

IaaS, 22%

2020 Market Size: $317 bn Paas, 15% SaaS, 63%

Source: IDC, Bloomberg

Exhibit 32: 2020 Estimate public cloud spending

IaaS 24%

SaaS 2020E 61% Market Size: 271 bn PaaS 15%

Source: IDC, Bloomberg

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Exhibit 33: SaaS market spending forecast. Decent mid teen growth ahead

300 in USD Bn 277

242 250 2019-2024 CAGR: 13% 210 200 184 164 148 150 122 101 100 81 65 53 50

0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: IDC, Bloomberg

Exhibit 34: Software-as-a-Service market is fairly fragmented with Microsoft and Salesforce being the key players

Microsoft 7% Salesforce.com 8%

Oracle 4%

SAP 2019 4% Market Size: $148 Billion Google 3% Others 74%

Source: IDC, Bloomberg

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Exhibit 35: Projection of revenue by one of the most prominent Saas players: Salesforce

Source: Salesforce

Exhibit 36: Saas market breakdown by application type

Other Customer System and Service 7% Management Relationship 5% Management Production 29% 5% Security 2019 8% Market Size: Collaborative $149 9% Billion Enterprise Resource Human Capital Management Management 14% 11% Content Workflow 12% Source: IDC, Bloomberg

Exhibit 37: Iaas spending forecast very strong and addresses digital infrastructure opportunity

200 in USD Bn 177 180 160 2019-2024 CAGR: 141 140 29% 120 111 100 86 80 66 60 49 35 40 17 24 20 5 8 12

2017 2014 2015 2016 2018 2019 2020 2021 2022 2023 2024 2013 Source: IDC, Bloomberg

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Exhibit 38: Infrastructure-as-a-Service market share

Others 24%

Amazon Web Services 47% Google 2019 4% Market Size: IBM $49 Biillion 5%

Alibaba 7%

Microsoft 13%

Source: IDC, Bloomberg

Exhibit 39: PaaS spending forecast. Healthy growth ahead

120 in USD Bn 100 100 2019-2024 CAGR: 33% 77 80

59 60 47 41 40 36 25 18 20 12 6 8 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: IDC, Bloomberg

Exhibit 40: Platform-as-a-Service market share

Amazon Web Services 15%

Others 38% Microsoft 2019 24% Market Size $36 Billion

Google 6% IBM Oracle Salesforce.com 3% 4% 10% Source: IDC, Bloomberg

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Exhibit 41: Cloud penetration by application: Significant head room in a number of areas

78% 71% 67%

Total Market Average: 40% 34% 28% 16%

ERP

CRM HCM

Security

Engineering Collaborative Supply Chain Supply Source: IDC, Bloomberg

TCS CEO Rajesh Gopinathan is of the view that Cloud has variabalised technology costs and a customer need not spend as much upfront on technology at it used to in the past and can buy things on a per unit basis. That, according to him, would lead to greater level of experimentation as investment hurdle rates are lowered. This in turn would mean that customers can initiate more technology projects and that will mean greater services opportunity.

Service intensity has also risen – TCS is also of the view that along with technology intensity, the services intensity has also gone up, as unlike in the past, more custom application development projects are being initiated to help create a differentiation. This is unlike in the decade pre-pandemic where the focus was more on implementation of a standard package.

Cyber Security is another big growth area This has specifically come to fore as the distributed nature of work that the pandemic has engendered has left corporate networks vulnerable. There have a number of cases (which have become public) in the last 12-18 months of serious cyber security breaches and/or Ransomware attacks. This has led to a significant investment by the corporate sector in this area. The talent crunch apparently is an issue in this space and that represents an opportunity for IT services providers. This area has been growing at a very fast clip even pre-pandemic but the pace accelerated. Microsoft in CY2020 grew its security software business by 40% and it represented >US$10bn in revenue..

Exhibit 42: Information Security & Risk Management Spending by Segment, 2020-2021 (US$mn) Market Segment 2020 2021 Growth (%) Application Security 3,333 3,738 12.2 Cloud Security 595 841 41.2 Data Security 2,981 3,505 17.5 Identity Access Management 12,036 13,917 15.6 Infrastructure Protection 20,462 23,903 16.8 Integrated Risk Management 4,859 5,473 12.6 Network Security Equipment 15,626 17,020 8.9 Other Information Security Software 2,306 2,527 9.6 Security Services 65,070 72,497 11.4 Consumer Security Software 6,507 6,990 7.4 Total 133,776 150,409 12.4 Source: Gartner (May 2021)

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Exhibit 43: Cyber Security Services market opportunity

Source: IDC, Bloomberg

Total addressable market (TAM) expands as customers ask for more CEO commentary in recent times in the industry has focused on the increasing total addressable market (TAM). Value expectations from customers have changed over the years and increasingly global clients are looking up to Indian IT players to navigate the disruption in their individual industries and deliver business outcomes. This used to be the exclusive preserve of Western strategy consultants. In our view, this is an elevation of status for the Indian industry and the right set of players can now play the ‘value’ game in the years to come than a largely ‘price’ game that they were playing in the last many decades. The ‘growth and transformation’ type of projects that TCS refers to would fall into this bucket in our opinion and here we believe the infusion of technology and digital into all areas of the enterprise will likely hasten this shift in market share away from the Western incumbents to a new set of players. Who the successful new players will be is yet to be proven. But we think a few with Indian heritage will be among the leaders a couple of decades down the road. TCS is of the view that the customers themselves know the final state that they would like to be post transformation and they only require partners to help them in their journey to reach that point. And, who better than to do business with a service provider who knows your business, your company and your technology landscape well. TCS is therefore exploiting what it calls the ‘contextual knowledge’ of the client to make inroads into this space. It believes that the ‘information asymmetry’ and the ‘best practices’ based consulting that the Western incumbents have exploited is a thing that will fade into the background. Also Indian companies have been able to strike conversations with multiple stakeholders within their customers beyond the chief information officer (CIO). This has happened as infusion of technology into the various business activities/processes has started to increase. Usage of domain, contextual and cross industry knowledge key: Domain/vertical knowledge is critical to help address clients with complete solutions rather than just execute technical projects. The deep contextual understanding of a customer’s business because of a long association with it helps come up with differentiated solutions. It would also help if vendors are able to use cross industry knowledge to deliver breakthrough improvements rather than incremental ones. For example, TCS says that application of claims processing in insurance space helped it address issues in healthcare. It has indicated that dynamic pricing in retail has been leveraged by auto OEMs. Accenture (an example of an incumbent) has industry expertise across 13 diverse industry groups. ACN says this breadth is a competitive advantage as CEOs are increasingly looking to benchmark themselves against the best companies regardless of industry and they are turning to ACN for its cross-industry expertise. We believe this was the key reason for the 2020 restructuring of the top management (Pivoting to a post 'Digital' world) when it moved from a vertical structure to a geographic structure. It indicated that it has helped to drive more innovation closer to clients and improved client proximity.

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Exhibit 44:Total addressable market is expanding as value expectations are rising

Source: Wipro The industry however has a lot of work to do on the brand as it is still perceived to be ‘tech’ focused.

Partnerships with the wider ecosystem is critical for success in the days ahead The IT services industry is as much a play on partnership with the technology ecosystem comprising tech titans like Microsoft, Amazon, Google, IBM, SAP and Salesforce, as with emerging players like Snowflake, Servicenow, Nutanix and long tail of smaller players, start-ups and even academia. This would require investment of money and resources to execute well on these partnerships. The larger eco-system partners who are fighting for market share in their respective areas (AWS, Azure, GCP, IBM) pro-actively encourage this and invest from their side too. Exhibit 45: Industry players are partnering with both big players and start-ups

Source: Infosys

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Margins will not see material deterioration in our view There is some amount of angst within the investor community regarding how much of the margin gains of FY21 would be retained going forward. At the coverage universe level, we see things in a more positive light. We think margins will more or less hold up at FY21 levels even in FY24 as some of the drivers shift positively. On the revenue side, we see faster growth and a mix shift towards Digital to be EBIT margin accretive. While there will likely be an increase in per capita employee costs due to ‘war-for-digital-talent’, we think there are enough levers in place to mitigate the same. While some of the gains of FY21 may be temporary, we see some structural shifts in delivery, which we believe have not fully played out. Exhibit 46: What happened to costs during the pandemic

Source: Infosys

Exhibit 47: Margins are expected to be sticky over FY21-FY24 USD Revenue Growth EBIT Growth PAT growth EBIT Margin

FY15-FY20 FY21-FY24 FY15-FY20 FY21-FY24 FY15-FY20 FY21-FY24 FY15 FY20 FY21 FY24

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Exhibit 48: Cost structure of TCS and areas where gains can be held/made. Applicable to peers too. as a % of revenue

FY19 FY20 FY21 How and why gains should sustain/not sustain

Cost of Revenue

Cost higher in FY21 likely negatively impacted by – (1) pricing concessions given to customers in some sectors, (2) full impact of 6 months of salary increase for entire company starting 1 October 2020 (3) impact of large deals won which are at the initial stage and required employee rebadging and/or transition costs. (4) possibly lower utilisation. But we think this ratio will go back to ~41-42% on (1) Pyramid reshaping as fresher talent is infused both offshore and onsite, Employee cost 41.3 41.8 43.8 (2) WFH/WFA talent pool expansion, (3) use of ‘talent cloud’. This is basically usage of gig platform. This helps keep utilisation high and is under appreciated as a lever (4) cost rationalization due cost of living indexation (5) offshore delivery shift sustained/increased (6) complete withdrawal of price concessions extended in 2020 (7) some price gains in Digital and in ‘Growth and transformation’ projects..(8) extensive usage of products/platforms and automation tools. Fees to external consultants 7.3 8.0 7.7 Modest gains possible as WFH/WFA/crowd sourcing is adopted Equipment and software 1.5 1.2 0.9 - Facility expenses 1.7 1.1 0.9 Big drop possible if 25/25 (in the TCS context) is implemented strictly Marginal gains. Lesser depreciation on buildings to be offset by depreciation on investment on software and hardware Depreciation 1.4 1.7 1.9 for Work from home. Lower real estate leasing going forward would mean lower IndAS 116 hit WFA and WFH mean higher offshore and lesser travel. However we think this figure will potentially rise to 1% in normal Travel 1.4 1.5 0.5 times. Communication 0.9 1.0 0.9 - Other expenses 2.5 2.7 2.6 Visa costs (we believe they sit here) could go down as onsite is more local Cost of Revenue 58.1 59.0 59.2 -

S G & A expenses

Sales compensation expenses may not come off materially. Bench cost can be reduced – for TCS bench costs sit here Employee cost 12.1 12.9 12.1 – as utilization could be improved by usage of crowd sourcing platforms Fees to external consultants 0.4 0.3 0.4 - Facility expenses 0.9 0.6 0.4 Modest gains possible Depreciation 0.6 0.6 0.6 - Travel 0.8 0.6 0.1 This will rise back to ~0.5% level when covid situation is well under control Communication 0.2 0.2 0.3 - Provision for Doubtful Debts 0.1 0.1 0.1 - Other expenses 1.5 1.3 0.9 Marketing could go virtual to some extent and hence cost saved. So it could go back to ~1% but entirely back to ~1.5%. S G & A expenses 16.6 16.6 15.0 - Source: Companies, Nirmal Bang Institutional Equities

Platform and Product play We believe that vertical/sub-vertical platforms could be the other way forward for the Indian IT companies to reduce labor intensity. These are either created from scratch or bought from a third party, modernized and put out into the market. While these may not deliver great margins in the first one or two contracts, with each incremental contract, incremental profitability goes up disproportionately.

We have seen productisation and platformisation of services among the India heritage players over the last couple of decades and we think that has helped them to support margins despite intense pressure from competition and customers.

While all players have had their fair share of success here we would think that TCS and Infosys in our universe are the key players who have benefited. Of course HCL Technologies has taken a bold bet on entering the horizontal products space directly by acquiring and renovating in products besides organically creating them too.

We also see some of these platforms and products as hidden value within these companies. For instance the core-banking platforms of TCS and Infosys may fetch better valuation should they be independently listed entities. We think the automation platform TCS – Ignio- which is housed in a separate entity called Digitate – could have significant value attached to it considering the valuation being given to players like UIPath – 50x TTM

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revenue. Digitate in our view as of FY21 is likely delivering ~US$125-150mn in revenue. Ignio has over the years marketed through partners too. Exhibit 49: Platforms of TCS Name of the platform What it does. Plus other details It is designed to enable financial institutions to embrace digitization as a winning strategy. - Banking: Serves ~25% of the world population. - Capital Markets: Records 10 million trades per day (peak), represents $40 TCS BaNCS trillion worth of AUC across 100 countries - Insurance: Administers over 20 million life, annuity and pension policies; 135 million property and casualty policies It is a collaborative learning platform on the cloud that powers improved learning outcomes. Assessment: 200 million+ candidates assessed till date; 2.4 million candidates assessed in largest single shift in FY 2020 TCS iON ƒLearning: 3 million+ learners on the platform, 47,000 courses available, 18,000 communities ƒProcess Management: 500+ SMB clients, 1 million+ users

World leading cognitive automation software for enterprise IT and business operations. Manages over 1.5 Ignio million technology resources autonomously

TCS ADD It is a comprehensive suite for digital transformation of drug development and clinical trials

Plug and play SaaS based business platform to digitally transform business, network and revenue management domains of subscription based businesses. Serving 27+ clients, across Communications, TCS HOBS Utilities, Manufacturing and Personal Care; Serving 21 million+ subscribers, handling 125,000+ devices and processing 1 billion+ events

AI powered system of actionable intelligence – powered by an enterprise digital twin (customer, product, TCS TwinX process) to help business leaders simulate and optimise enterprise decisions, predict and proactively manage outcomes

Optumera is an AI and ML powered merchandise optimization platform that enables retailers to unlock TCS Optumera exponential value by optimizing their space, mix and price in an integrated manner.

It is a unified store suite which leverages AI to help deliver personalized, interconnected journeys across TCS OmniStore various touch points for frictionless customer experience and predictive operations

Mastercraft is a digital platform to optimally automate and manage IT processes. Successfully delivered 60+ Mastercraft modernization projects so far

Jile is a SaaS-based, scalable Agile DevOps platform to accelerate software development and delivery and Jile integrate DevOps tools

Source: TCS, Nirmal Bang Institutional Equities Research

Automation - Ignio, Nia, Holmes and DryIce will help hold up margins in commoditized areas Over the years, the Indian IT services firms have lowered the labor intensity in the work that they have been doing, especially routine work in horizontal service lines like Business Process Services, Infrastructure Management Services and Application Management Services through automation. Starting with simple tools to take charge of routine tasks, these have been migrated to more complex activities. Each of these initiatives have been brought together as a family and branded – so we have the Ignio initiative of TCS, Holmes of Wipro, Nia of Infosys and DryIce of HCL Tech. Accenture works with two automation initiatives in the form of Mywizard and SynOps. From what we understand, many of these like Ignio and Holmes have been built internally whereas DryIce of HCL Tech has a completely different strategy of bringing a number of third-party automation tools with an orchestration layer on top provided by the company. It is the use of these automation tool kits that has helped players to hold off significant margin pressure in the commoditized services. At the same time, they are able to deliver the productivity gains required on an annual basis for its clients. On the cloud side, most players are involved in building their cloud services platforms to automate a lot of the cloud services work that they deliver to customer. In FY21 the most prominent was that of Infosys Cobalt (Exhibit 51)

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Exhibit 50: Platforms of Infosys Name of the platform What it does. Plus other details Finacle is a core banking product developed by the Infosys that provides universal Digital banking functionality to banks. In August 2015, Finacle became part of EdgeVerve Systems Limited, a Finacle wholly owned product subsidiary of Infosys. Finacle is used by banks across 100 countries to serve over 1 billion customers. Infosys Nia is an artificial intelligence and machine learning platform built to help businesses Infosys NIA streamline data management and automate complex processes. With Infosys Nia, redundant business processes are automated, thereby saving time for people involved in that workflow. Panaya is a change acceleration solution that understands SAP ERP and S/4HANA business Panaya processes. It saves time and costs by proactively eliminating risk in SAP upgrade and enhancement projects. Skava Commerce platform enables unprecedented agility in driving digital commerce programs Skava across retail channels Stater is a market leader in the Benelux region, operating across the mortgage and consumer lending value chain with deep capabilities in digital origination, servicing and collection. Stater has Stater Mortgage Servicing Platform deep European mortgage expertise and a robust digital platform to drive superior customer experience. McCamish is the center of excellence for Infosys' life insurance software and services offerings in Infosys McCamish the U.S., has been providing software and services to the life insurance industry for over 22 years.

Infosys Wingspan is a next-gen learning solution that helps organizations accelerate their talent Wingspan transformation journey. It is a cloud-first and mobile-first solution that is designed to be accessible anytime, anywhere and on any device.

EdgeVerve Systems, a wholly-owned subsidiary of Infosys, develops innovative software products EdgeVerve and offers them on premise or as cloud-hosted business platforms.

Source: Infosys, Nirmal Bang Institutional Equities Research

Exhibit 51: Infosys Cobalt initiative

Source: Infosys, Nirmal Bang Institutional Equities Research

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Operating levers have some more room to move The pandemic has led to a positive traction in the operating levers of the various players. While cut back in travel and marketing costs are a temporary phenomenon and will probably come back – albeit not fully- we see some of the changes on the operating side sustaining even post pandemic. We especially think that WFH and WFA and the record deal signings done in the last 12 months has likely led to customers being much more open to execution of projects from anywhere with more flexibility on compliance and security. Our channel checks indicate that the customers are no longer paranoid about these. Thus the massive offshore shift that has happened for all players in the industry (Exhibit 52) will likely sustain or even increase in the days ahead. Similarly expect Utilisation to stay higher as almost all companies use gig platforms of some sort or the other (either to source external or internal talent). The gig workers are no longer working on low hanging fruits like testing but are doing much more complex work in Digital, for instance, in the last 12 months. This helps address talent shortage, have better control over talent cost, deliver projects on time, etc. All of this has been achieved with appropriate governance structures and with full visibility to and concurrence of customers.

Exhibit 52: Offshore effort has seen a massive shift post pandemic in Infosys

77.0 75.7 76.0 74.8 75.0 73.9 74.0 73.0 72.3 72.4 72.0 71.6 71.8 72.0 71.3 71.4 71.3 71.3 71.3 71.0 70.6 71.0 69.9 70.0 69.0 68.0

67.0

1QFY18 3QFY18 1QFY19 2QFY19 4QFY19 2QFY20 3QFY20 1QFY21 3QFY21 4QFY21 2QFY18 4QFY18 3QFY19 1QFY20 4QFY20 2QFY21 Offshore Mix Source: Infosys, Nirmal Bang Institutional Equities Research

Exhibit 53: Infosys Utilization has stayed high (%)

84 82.1 82.3 81.8 81.5 81.6 82 80.8 80.4 80.6 80.2 80.279.8 80.3 82.2 80 78.9 79.0 77.777.878.2 78.2 78 76.5 75.7 75.775.4 74.875.2 76 74.274.7 74 72.572.9 72.8 72

4QFY14 1QFY15 2QFY15 4QFY15 1QFY16 2QFY16 4QFY16 1QFY17 2QFY17 4QFY17 1QFY18 3QFY18 4QFY18 1QFY19 3QFY19 4QFY19 1QFY20 3QFY20 4QFY20 1QFY21 3QFY21 4QFY21 3QFY14 3QFY15 3QFY16 3QFY17 2QFY18 2QFY19 2QFY20 2QFY21 Utilization (including trainees) Source: Infosys, Nirmal Bang Institutional Equities Research

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Valuation – highest in last decade; could hold up for some more time Valuation multiples for most IT services stocks are at 10-12 year highs currently (see PE charts from Exhibits 53 – 54) and are approaching levels that the industry had seen during 2006-2007 when revenue growth was significantly faster than it will be during FY21-FY24. There is unease among long-term watchers of this industry due to the rich valuations. However, we do not think that they are outrageous in the context of the acceleration in revenue (by 400-600bps in organic US$ terms, see Exhibit 56) over FY21-FY24 and almost doubling of earnings growth rate over the same timeframe vs the one seen during FY15-FY20 or during FY17-FY20. This should also be seen in the context of where the global and Indian interest rates are currently, cashflows having significantly improved and enhanced return of capital to shareholders (Exhibits 58-60).

Our earnings growth estimates are more or less in line with revenue growth as we see EBIT margins of our coverage universe holding up at almost FY21 levels, which was driven up by pandemic-related savings on travel & marketing, higher offshoring and greater utilisation. While we see return to pre-pandemic levels of spending on Travel & Marketing to a great extent, we believe that the industry is likely to settle at a higher levels of offshoring, fixed priced contracting (with ability a manage costs better) and utilisation. We also expect significant usage of automation tools, software platforms and including gig employee ones. Also, with a higher digital component in their business and a little bit of pricing power, we feel that much of the much-hyped costs connected with ‘war for talent’ will be countered.

Exhibit 54: TCS 12-month forward PE Chart

(x) 35

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Sep Sep Sep Sep Sep P/E Mean +1 SD -1 SD Source: Company,Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 55: Infosys 12-month forward PE Chart (x) 30 28 26 24 22 20 18 16 14 12

12 13 19

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May May May May P/E Mean 1sd (1)sd Source: Company,Bloomberg, Nirmal Bang Institutional Equities Research

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We continue to remain ‘neutral’ on the sector with a positive bias and select ‘Buy’ calls. The point to be noted is that our earnings estimates are in-line with consensus for TCS, Infosys, HCL Tech and Mindtree while they are higher for Wipro, Tech Mahindra and Persistent Systems for FY22-FY24. In terms of PE multiples, TCS continues to be our sector benchmark as it has the strongest position in the industry due to: (1) Breadth and depth in service lines, geographies and verticals (2) Ability to stitch together integrated offerings (3) Significant lead in automation skills (4) Strong and stable base of experienced employees with contextual knowledge (5) Strong product, platform and agile delivery capabilities and (6) Industry-best margins and return ratios. We had raised the target PE multiple on TCS to 30.6x (+2SD over recent 5-year mean of 22.1x, SD at 4.2) vs 26.25x (2.5SD over pre-pandemic 5-year mean of 20x, SD at 2.5) that we had till recently. We have benchmarked all other IT companies with respect to TCS (see Exhibit 61). In terms of target PE multiples, we continue to hold on to the discounts that we had given these companies post 4QFY21 results. The target multiple in our view should be a reflection of the longevity of the enterprise, prospects on revenue, profitability growth and return ratios and their sustainability. The resultant ratings and target prices are given in Exhibit 57. HCL Tech and Tech Mahindra are the only ‘Buys’ and Mindtree is the only ‘Sell’. Others have an ‘Accumulate’ rating.

Exhibit 56: There is clear revenue and profit acceleration in FY21-FY24 vs FY15-FY20. Margins are expected to be sticky USD Revenue Growth EBIT Growth PAT growth EBIT Margin

FY15-FY20 FY21-FY24 FY15-FY20 FY21-FY24 FY15-FY20 FY21-FY24 FY15 FY20 FY21 FY24

Exhibit 57: Changes made to our earnings estimates, target prices and ratings New New New Old Old Market New Old New Upside Old Change CMP FY22E FY23E FY24E FY22E FY23E New Company Cap.(US$ target target Old Rating TP to TP in TP (Rs.) EPS EPS EPS EPS EPS Rating bn) PE (x) PE (x) (Rs.) CMP(%) (%) (%) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) TCS 3,325 164.7 104.3 119.7 131.7 104.3 120.6 30.6 26.3 Accumulate Accumulate 3663 10.2 3165 15.7 Infosys 1,568 89.4 54.4 60.5 67.6 54.4 61.2 27.5 23.6 Accumulate Accumulate 1667 6.3 1411 18.1 Wipro 539 39.5 20.9 24.5 28.1 20.2 24.0 23.0 19.7 Accumulate Accumulate 563 4.5 465 21.1 HCL Technologies 985 35.8 50.1 57.5 59.2 51.8 58.4 23.0 19.7 Buy Buy 1320 34.0 1150 14.8 Tech Mahindra 1,089 14.1 64.2 72.4 81.9 64.1 71.0 19.9 17.1 Buy Buy 1441 32.3 1211 19.0 Mindtree 2,583 5.7 79.0 90.9 102.3 78.9 90.2 24.5 21.0 Sell Sell 2226 -13.8 1893 17.6 Persistent Systems 2,930 3.0 85.8 109.7 137.0 80.3 99.4 26.0 21.0 Accumulate Accumulate 2854 -2.6 2088 36.7 Source: Nirmal Bang Institutional Equities Research, All Prices as of close of trade 2 July 2021.

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Exhibit 58: OCF has improve significantly for HCL Tech

Source: HCL Technolgoies

Exhibit 59: FCF to PAT ratio (%) has been inching up and likely peaked in FY21

140 117 120

92 100 89 89 90 87 107 80 75 80 71 90 84 79 60 78 71 64 61 69 40

- FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

TCS Infosys

Source: Companies, Nirmal Bang Institutional Equities Research

Exhibit 60: The shareholder payout has got better at TCS

Source: TCS

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Exhibit 61: Our relative valuation matrix and rationale Target PE Discount Company Rationale for the discount and our other company commentary multiple to TCS TCS continues to be our sector benchmark as it has the strongest position in the industry due to: (1) Breadth and depth 30.6x in service lines, geographies and verticals (2) Ability to stitch together integrated offerings (3) Significant lead in +2SD over the TCS automation skills (4) Strong and stable base of experienced employees with contextual knowledge (5) Strong product, recent 5 year platform and agile delivery capabilities and (6) Industry-best margins and return ratios. Over the longer term, we expect mean. it to beat global IT services industry growth and be in line with the growth of Tier-1 India heritage players. Big positive has been the strong large deal TCV traction ever since the new CEO came in and his pivot to Digital compared to the slightly positioning that Infosys had under his predecessor. Had ~600bps growth gap between itself and Infosys 27.5x 10% TCS in FY21. We think the gap will reduce as Infosys will likely grow a tad faster than TCS in FY22 and even in FY23 due to the significant large deal inflow in FY21, most of which is net new. The 10% discount is for the lower ‘legacy services’ capabilities in terms of automation, lower platform skills, lower margins and ROIC. The 25% discount is for significant concentration in IMS, lower margin and lower ROIC. It has made significant investments in the Products business, where the business case is yet to be conclusively proven. However, in our view, the investment is a low cost call option for an entry into the large profit pool of the Products business. HCLT is also likely HCLT 23x 25% a significant beneficiary of the build out of Digital foundation business, which plays into the company’s IMS strength. However, the relatively tepid 19% growth in Mode 2 business in FY21 indicates that there is something amiss. That is the reason that HCLT is investing a 100bps in boosting capabilities in FY22. The 25% discount is for the weak overall growth over the last many years though on a QoQ basis it has been delivering better growth since Thierry joined. Company-specific issues have affected growth in the last 10 years. Margins have recovered but are still lower than industry leaders. Lower ROIC is partly due to lower margins and partly due to Wipro 23x 25% ineffective M&A. Working capital has been admirably handled. The new CEO has indicated that he will be obsessed with growth – though not at the expense of margins. We expect Wipro to display a significant growth pick-up in FY22 and be closer to industry benchmark standards than it has ever been in the past. That has led to the P/E discount with TCS, which used to be as massive as 55-60%, to compress significantly. The 35% discount to the target P/E multiple of TCS reflects TML’s structural weakness because of its less diversified revenue mix, higher client concentration, slower organic growth, lower margins, lower RoIC and behind-the-curve investments in automation and digital. TML has had a challenge managing both growth and margins together in the past Tech 19.9x 35% and we look forward to it delivering on its commentary in the coming quarters on both non-volatile revenue growth and Mahindra margins. But, we see the current discount of ~50% to be excessive. We are expecting the company to show revenue and profit acceleration going into FY21-FY24 on the back of the 5G narrative. If that happens, we suspect the discount compression could be a lot larger. The business model prior to L&T taking over was dependent on short-term discretionary projects with a large SGA. We have reduced discount to TCS from the past due to the L&T parentage and the possibility of a 2-way or a 3-way merger between LTI, Mindtree and LTTS to create a much larger entity which could rival the Tier-1 India heritage players. Also, the recent focus on annuity revenue is a positive. We think the current management team with considerable experience Mindtree 24.5x 20% from larger organisations like Cognizant and Accenture will have the strategies and tactics to scale up. The new team has delivered significant margin expansion over the last 12-18 months. But, the worrisome part has been the tepid order inflow number – 12% on a TTM basis, which we believe will come in the way of faster revenue growth in the days ahead. However we see a strong pick up in business in the travel, toursism and hospitality as developed markets open up We have reduced the discount from 30% to 25% and to 15% over the last few quarters as the company has surprised on the growth front from the mediocre run that it had during FY15-FY20. This is after the services business was able to clock a scorching CQGR of 5.6% since the new CEO, Sandeep Kalra joined in 1QFY21. The reduced discount also Persistent takes into consideration the prospects of 25-30% growth in FY22 and ~20% in FY23 and the company hitting the 26x 15% Systems US$1bn revenue target organically itself. However, we still keep a 15% discount to TCS as the business model is weaker compared to TCS’ from multiple perspectives – breadth of vertical, geographic, service line exposures. Client concentration is still large. The big challenge beyond 3-5 years will be how to penetrate the Global 1000 clients where already India heritage players (and global players) are very strong incumbents. Source: Nirmal Bang Institutional Equities Research

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Company Notes HCLT – Buy - Continues to be the dark horse in our large cap coverage; Near term uncertain outlook mutes stock performance Despite HCL Tech delivering organic revenue growth, which has been broadly at par with its Tier-1 India heritage peers in the FY15-FY20 timeframe and margins which are more than respectable and closer to Infosys’ levels, the market continues to give it a big discount (40-45%) in valuation compared to TCS – which we believe is unwarranted. The market’s caution largely stems from the dim view that it has taken on the >US$3bn bet HCL Tech has placed on developing an enterprise product business. We have been a bit more constructive on that part of the business relative to consensus (A Low-cost Call Option). Should it make a success of this effort, we believe the multiple expansion could be significant. Though there is no concrete data to suggest any positive turn of events, we believe that the Indian market has largely ignored the frenzy in the enterprise software space (specifically Saas) in the US where valuations have reached dotcom equivalent levels. We think that in the coming days, if the rally in the US software stocks sustains for some more time, there could be a positive rub-off on HCL Tech product multiples as long it shows sustained double digit growth (yet to do so). We are excited by the fact that an Indian company is probably taking a bet on the largest profit pool in the technology space. We think that at this stage, the reward vis-à-vis the risk is quite significant. In the last 6 months, HCL Tech has had a muted performance (~4% in 1HCY2021 vs ~20% for Nifty IT) as 4QFY21 results were softer than expected and the revenue growth guidance for FY22, though in double digit, was not a specific one unlike in the past, resulting in unease among investors as to whether all was well. The order inflow growth for the full year at 13%, in our view, was a tad weaker. While the Product & Platforms (P&P) business has seen a growth of ~10.5% (YoY) in the last 3 quarters of FY21 (comparable due to IBM product acquisitions), it is expected to see deceleration to low single-digit growth in FY22 as HCLT is discontinuing a couple of products (out of 20). This commentary has indeed put pressure on the stock. We need to see whether there is any upgrade to the single digit growth rate that was given for the P&P business. The way to value HCL Tech in my view is in an SOTP basis by combining the valuation of (1) IT-ITES business and (2) Products & Platforms business. We believe that the former is growing at par with the industry and is delivering margins which are just a tad lower than that of Infosys’ but ahead of its many peers. Optically, the company’s return ratios have compressed in recent years, but that is because of the ~US$3-3.5bn investments that HCLT has made in acquiring IP and in IP relationships. If one excludes that, we believe the services business would be delivering pre-tax RoIC which would at par with that of Infosys’. The Products business largely consists of acquired IP from IBM and investments in partnerships with both IBM and others. We believe this is a highly profitable business with muted growth prospects in the near term for the portfolio. However, within the portfolio, there are elements (constituting a small share, arguably), which we believe are growing at a torrid pace, like those focused on collaboration, ecommerce, digital marketing and cyber security, the vast majority of the revenue is coming from really matured products, which are barely growing or which are even declining as we speak. Probably that is the reason why HCLT has taken the call to drop 2 products in FY22..

Tech Mahindra (TML) – Buy - will have a different growth trajectory compared to peers beyond FY22

While most peers would be seeing a revenue deceleration as they navigate FY21-FY24 we think TML to do the reverse as it starts addressing the 5G opportunity. While the 5G is being eyed by all other players in the market including its large Indian peers, we feel the TML 5G play not only focuses on communication service providers (CSPs) but also on enterprises and also on the larger eco-system consisting of device vendors and equipment players. There exists the potential to finally monetize the LCC acquisition on the network services side in a material way as TML starts working to disrupt incumbent 5G equipment players both on the CSP and the enterprise side with a focus on Open RAN and cloud native technologies. This opens up a new and exciting market with a new set of competitors and collaborators. However, this space is still evolving and could see entry of unexpected players, thereby increasing competitive intensity. However, for TML, most of these revenue streams are incremental and therefore a positive. Many of the 5G capabilities were not part of the TML arsenal during 4G roll out about 10 years back.

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Tech Mahindra (TML) post 4Q indicated the it will deliver double digit organic growth in FY22 (an upgrade compared to the high single commentary prior to that) on the back of enterprise side leading with a double-digit number and the Communications vertical growing in high single digits with only a small contribution from 5G business. This is on the back of higher large deal pipeline and deal flow.

We see it being able to deliver on its EBIT margin guidance of 15% for FY22 with a focus on driving greater synergies in portfolio, greater offshoring/right shoring, usage of automation, keeping utilization high, etc and mostly importantly benefiting from faster topline growth. These factors will offset rising costs from higher travel, marketing expenses and also higher compensation

We see TML focus on more predictable growth and higher margins due to a significant thrust on large deals with 200% increase in investment to take proactive solutions to customers. A greater focus on increasing average deal size as well as increase in annuity streams in contracts. There is also the thrust on the cloud, which involves a significant focus on its IPs and accelerators and collaboration with hyperscalers and SaaS partners. There seems to be an opportunity to monetise data centers of the customers without involving TML’s balance sheet.

On the sales front there seems to be a significant thrust on empowering and enabling the client partners of key accounts. The performance measurement/incentivization is being drilled down to the account level and are no longer at the SBU or the vertical level. There is also a focus on selling multiple offerings to various verticals whereby some of them will become US$1bn units in the next few years.

Over the last 5 years, we have been valuing TML at a big discount to our industry benchmark target PE multiple, which reflects its structural weakness because of its less diversified revenue mix, higher client concentration, weak enterprise IT Services business (where it was a late entrant), slower organic growth (which we think will change in FY22 and beyond), peer set low margins and lower RoIC. TML has struggled in the past 5 years in balancing growth and margins, but we believe that it is getting its act together now.

Brief commentary on other stocks

TCS- Accumulate - will close gap on growth front with Infosys in FY22. Only >US$10bn India heritage player to likely see margins expand over FY21-FY24

We see TCS delivering US$ Revenue/PAT CAGR of 11.7%/13.5% over FY21-FY24 after a relatively flat revenue performance in FY21 due to exposure to certain covid-affected verticals like Travel, Hospitality, Aerospace, certain areas of manufacturing, media, etc.

Despite having the highest EBIT margins in the industry in FY21, we see it expand by ~60bps over this FY21- FY24, something we are unlikely to see in other players with >US$10bn revenue. While TCS revenue in CC terms was slower than Infosys by ~600bps in FY21, we expect it to close that gap to ~100bps in FY22/FY23. Its largely organic growth focus with low employee attrition, significant client mining efforts, building out the ‘talent cloud’, a material expansion of its TAM by addressing the ‘growth and transformation’ of its clients will mean that it will continue to be the leader of India heritage pack on growth, margins and on pre-Tax RoICs.

TCS continues to be our sector benchmark as it has the strongest position in the industry due to: (1) Breadth and depth in service lines, geographies and verticals (2) Ability to stitch together integrated offerings (3) Significant lead in automation skills (4) Strong and stable base of experienced employees with contextual knowledge (5) Strong product, platform and agile delivery capabilities and (6) Industry-best margins and return ratios. Over the longer term, we expect it to beat global IT services industry growth and be in line with the growth of Tier-1 India heritage players. .

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Infosys– Accumulate - will lead growth even in FY22 but a repeat of FY21 order inflow looks a tall order

Among the Tier-1 India heritage players we see Infosys having the fastest growth in organic terms over FY21- FY24. Though the gap between it and its peers will narrow quite substantially compared to the one seen in FY21.

We see Infosys delivering US$ Revenue/PAT CAGR of 12.6%/13.6% over FY21-FY24 after an industry leading revenue performance in FY21 (revenue up by 5% in CC terms) due to strong order inflow and slightly lower exposure to covid-impacted sectors..

Large order inflow growth which was extremely strong at 58% YoY in FY21 (with a significant net new component) would be tough to repeat. Much of the energy in the company has come from the thrust on Digital that Salil Parekh gave when he joined in early 2018. And also the focus on large deals.

While there were top management exits around the time he joined, post that Salil has been able to keep the flock together and drive performance. Execution of the large deals won, profitably and to the clients’ satisfaction will be the key focus for the top management team in FY22. Unlike TCS where we are seeing margin expansion we believe EBIT margin at Infosys could potentially dip by 100bps over FY21-FY24 on higher compensation costs, lower automation and platform skills. However we see it second best in the industry behind TCS and significantly above the reset of its peers.

While the numbers are not exactly an apple to apple comparison, the higher attrition in IT services lately is cause for concern and will manifest into higher compensation costs. While growth has picked up under Salil, the debtors situation (including unbilled number) has deteriorated from the time period before him.

While the big highlights in FY21 were the Daimler and Vanguard mega deals, the branding and productisation of its cloud services into ‘Infosys Cobalt’ has in our view been key success story.

Wipro – Accumulate - stock run up steep. Order inflow needs to pick up for organic growth to hit street’s elevated expectations

Wipro’s QoQ growth has perked up in the last 3 quarters as it delivered its best 4Q in the 10 years under the new CEO, Thierry Delaporte. To some extent we think he is lucky in that he joined the firm in the midst of the pandemic when growth was looking up significantly for the entire industry. A ‘high tide lifting all boats’ situation is playing out right now.

To that extent it will be difficult to separate how much of this uplift is because of the market and how much is because of the actions and strategies of the new CEO. We will only know that post FY23.

At Wipro’s analyst meet (Meet), the new CEO talked about an ‘obsession with growth’ while maintaining respectable margins. Without giving out specific numerical targets, Thierry (based on media articles) wants revenue acceleration in the first year, catch-up with industry growth in the second year and industry-leading growth in the third year. We believe he is referring to FY22, FY23 and FY24. In our estimates we have been a bit sceptical as the order inflows do not justify this growth trajectory as yet. Wipro has been unable to deliver industry-matching growth in each of the last 10 years.

Thierry has a five-themed strategy, essentially revolving around the customer. These themes are: (1) growth focus – investment in existing accounts, shaping large deals and leveraging ecosystem partnerships (2) focus and scale in certain markets and sectors to achieve leadership (3) offerings/solutions – vertical ones (4) talent – strengthening domain and technology talent pool and building a performance culture (5) simplifying operating model with fewer P&Ls, delayering and focusing on clients.

Effective January 1, 2021, Wipro replaced its old structure of seven strategic business units, service lines and nine geographies with four strategic market units (SMUs) and two global business lines (GBLs). The four strategic market units are Americas 1, Americas 2, Europe and Asia Pacific Middle East Africa (APMEA). The two GBLs are integrated digital, engineering & application services (iDEAS) and infrastructure cloud, digital operations, risk & cyber security services (iCORE).

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The ~140% run-up in its stock in the last 12 months indicates that the market is betting on a significant turn for the better and which Wipro should deliver on, in our view. The Capco acquisition should help in our view (Logic of Capco buy is good). However it is not going to be cake walk. Large deal TCV is improving but underwhelming compared to TCS and Infosys:.

Mindtree – Sell - Steeply priced. Order inflow growth a tad weak against elevated growth expectations of the market

We see Mindtree delivering US$ Revenue/PAT CAGR of 13.9%/14.9% over FY21-FY24 after delivering a relatively flat performance in FY21 and underperforming most of its mid-sized peers like Persistent Systems, LTI, Mphasis and Coforge. It was impacted significantly by the largish exposure it had to the Travel, Tourism and Hospitality (TTH) vertical (~15% of pre-pandemic revenue and which virtually collapsed in 1QFY21).

While the revenue growth was tepid in FY21, earnings were up 76% largely on the back of massive margin improvement (+730bps at the EBIT level, SGA driven). This we believe has likely peaked. We are giving the new management the benefit of the doubt on revenue growth in FY22 on the back of two strong quarters that they have delivered in 3QFY21 and 4QFY21(QoQ), its ‘guidance’ on continuation of the momentum and its reasonably strong growth of 18% in its top 20 clients in FY21 (ex-top-client and ex-TTH).

We think the ~155% stock return in the last 12 months largely prices in improvement in earnings, driven by the extra-ordinary margin expansion (albeit from bombed out levels). Our target PE multiple at 24.5x (20% discount to TCS’), which we think is generous considering the riskier mix of revenues, both from a client as well as vertical perspective. Optically, all incremental revenue growth in the last 12 months has been driven by its top client (Microsoft), which formed 28% of its turnover in 4QFY21. While we do not see any immediate threat on the horizon from this client (which grew 29% in FY21), we think such a skewed growth does not deserve a higher multiple.

On the vertical side, while BFSI’s EBITDA margin has improved quite admirably from the lows it touched in many years before FY20, revenue has remained stagnant in the last four years. The Travel, Tourism and Hospitality (TTH) vertical, a key strength for MTCL during normal times, has contracted quite dramatically post Covid-19 and is making a steady improvement on the back of repeal of discounts. We think this vertical can come back to pre-pandemic levels of revenue by the Dec quarter of 2021.

MTCL guides for industry-leading double digit growth and ~20% EBITDA ,margin in FY22: Had it not been for the severe contraction in the TTH vertical, revenue growth in FY21 would have been an industry-leading 8.1% YoY, largely driven by the top account - Microsoft.

TCV in FY21 at US$1.38bn was up only 12%. While the deal pipeline was indicated to be at the highest level, conversion to deal flow still seems constricted with deal closures getting pushed back. We see this as the key risk to the elevated growth expectations of the market.

Persistent Systems – Accumulate- Fairly valued. Factoring in a sharp revenue acceleration. More room for upgrades beyond FY22

Within our current coverage universe, we see Persistent System’s (PSL) accelerating USD revenue and INR earnings the fastest, at ~21.7%/32.6% CAGR over FY21-FY24. Earnings growth will be backed by a steady expansion in EBIT margin by ~400bps over FY21-FY24.

Until May 2020, PSL had been underperforming its peers due to a rather lackluster EPS growth of just ~4% over FY15-FY20 despite a ~13.5% INR revenue CAGR as its EBIT margin compressed by 650bps (entirely gross margin driven due to higher onsite mix, likely lower margins in IP, Alliances and offshore services businesses).

The turnaround, in our view, can be partly attributed to Sandeep Kalra, the new CEO, who was heading its Technology Services business (~80% of revenues) and who managed to deliver an India heritage company universe leading USD revenue growth of ~13% in FY21. Some of this has been helped by the fact that the company did not have much exposure to covid-troubled verticals.

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Much of the new growth vigour has been driven by a new large deals strategy, which has improved the predictability of revenue. The order inflow has been extremely strong – relative to Persistent’s size. Many of which are multi-year multi-million dollar deals. We see the company continuing to invest in various parts of the business including delivery, sales, support functions to facilitate the rapid scale up that the market anticipates and it has the capacity to surprise on growth in FY23 and beyond.

We see margins improving on the back of higher offshoring, better margins in IP and Alliance businesses and scale benefits from SGA leverage. Obviously, it has been a big beneficiary of the current demand for digital transformation among enterprise customers. PSL with its OSPD (outsourced software product development) background and having worked with some of the largest and best software services vendors has the right credentials for doing Digital engineering work.

Quite a bit of the PSL turnaround is already reflected in the stock run-up in the last 12 months (up by ~360%). We are already pricing in 28% USD revenue growth in FY22 with the same slowing to ~20% in FY23 and on its way to becoming a US$1bn company by FY24 entirely through organic growth. Not only would it be one of the fastest growing companies within our coverage universe, this would be happening with one of the best RoICs.

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Risks to our view: The upside risks to our stock target prices include: (1) higher than currently expected spending on IT services, leading to upgrades in revenue growth (2) a higher-than-expected margin expansion, which could result from offshoring continuing to gain pace as customers become more comfortable with it (3) customers’ willingness to accommodate higher pricing as resources in digital areas are more difficult to come by (4) crowd sourcing platforms (also called gig platforms) become a larger component of delivery as more complex assignments are delivered using gig platforms. (5) A higher-than-currently expected depreciation of the Indian rupee or INR. (6) a higher than expected loss of competitiveness by some of the larger Western world IT services providers due to various reasons. Downside risks to our target prices include: (1) another wave of the current pandemic in 2021 or later driven by a variant of the virus, which cannot be controlled by current vaccines. This will lead to slower-than-currently- expected business/profit/cash flow growth for customers. However, it will reinforce the digital theme for various industries and will likely encourage fence sitter (if there any left!) (2) a sooner-than-expected cut-back in monetary and fiscal stimulus in the US and Europe (as central banks feel that they are behind the curve on inflation), which could put sudden brakes on economic activity and hence affect revenues of customers and their spending plans. (3) a sharp INR appreciation vis-à-vis the USD due to the significant capital inflows on both portfolio and FDI fronts into India. On the one hand, we have the ongoing macro-economic debate about the debasement of the USD due to the unprecedented and unconventional monetary and fiscal policies being followed, and on the other hand, we have the fastest growth in the last 40-50 years in the US (4) investor taking greater fancy to domestic investment players plays including on Indian ‘financials’ which should reduce appetite for Indian IT services companies which are basically developed market proxies.

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PE multiple charts Exhibit 62: TCS 12-month forward PE Chart

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Apr Apr

Oct Oct Oct

Oct Oct Oct Oct Oct Oct Oct Oct

Jan Jun Jun Jun Jun Jun Jan Jun

Jun Jun Jun Jun Jun Jun Jun Jun

Mar Mar Mar Mar Feb Feb Feb Feb Feb Mar Mar Feb Feb

Mar Mar Mar Mar Mar Mar

Nov Nov Nov Nov Nov

Dec Dec Dec Dec Dec Dec

Sep Sep Sep Sep Sep P/E Mean +1 SD -1 SD Price 5 10 15 20 Source: Company,Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 63: Infosys 12-month forward PE Chart

(x) (Rs) 30 1000 28 900 26 800 24 700 22 600 20 500 18 400 300 16 200 14 100 12 0

12 18 21 15

16 19 13

11 14 17 20

10 12 12 13 13 15 16 16 18 19 19 10

16 19 21 11

14 15 17 18 20 12

11 17 20 14

- - - -

------

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------

- - - -

------

- - - -

12 13 19

17 17 16 16

11 13 19 12 14 18 20

11 13 15 19 12 14 18 20

15 16 17 18 21 14 20

13 17 19 12 16 18

14 15 20 21

- - -

- - - -

------

- - - -

Jul Jul Jul

Apr Apr Apr

Oct Oct Oct Oct

Jan Jan Jun Jun

Mar Feb Mar Feb Mar Feb Mar Feb

Nov Dec Nov Nov Dec

Sep Aug Sep Aug Sep Aug Aug

May May May

Jul Jul

Apr Apr

Oct Oct

Jun Jan Jan Jan Jun Jun Jun

Feb Feb Mar Mar Feb Mar Mar

Nov Dec Nov Nov Dec Nov Dec

Aug Aug Sep Aug Aug Sep Aug Sep

May May May May P/E Mean 1sd (1)sd Price 5 10 15 20 Source: Company,Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 64: Wipro 12-month forward PE Chart

(Rs) (x) 500 24 450 22 400 20 350 18 300 16 14 250 12 200 10 150 8

100 6

12 13 15 15 17 18 20 20

13 14 15 16 18 19 20

12 13 14 16 17 18 19

13 13 15 16 18 18 20 21

14 15 17 19 20

14 16 19 21

11 13 18

12 17

12 14 19

10 11 11 13 13 16 17 18 18 20 10 15 15 20

11 14 16 17 20 15 21

12 13 17 18 19 20 15

14 19 16 21

------

- -

- - -

- - - -

- - - - -

------

- - - -

Jul Jul

Jul Jul Jul

Oct Apr Apr Oct Oct Apr Apr Oct

Apr Oct Oct Apr Oct

Jan Jun Jan Jun Jan Jun Jan Jun

Jun Jun Jun Jan Jan Jan Jun

Mar Mar Feb Mar Mar

Dec Nov Dec Nov Dec Nov Dec

Mar Mar Mar Mar

Feb Feb Feb

Nov Dec Dec Nov Dec Nov Nov

Aug Sep Aug Sep Aug Sep Aug

Sep Aug Sep Sep Aug Aug Aug

May May May

May May May May Price 5 10 15 20 PE Mean 1sd -1sd Source: Company,Bloomberg, Nirmal Bang Institutional Equities Research

42 Information Technology Sector

Institutional Equities

Exhibit 65: HCL Technologies 12-month forward PE Chart

(x) (Rs) 19 1200

17 1000 15 800 13 600 11 400 9

7 200

5 0

13 14 15 16 20 17 19

14 15 19 20

17 20 21 21 16 16 17

15 16 20 21

13 17 18

13 14 14 15 15 16 16 17 18 19 19 20 20 13 17

14 18 18 19 19 14 15

16 17 21 16 17 20 21

14 15 17 20 18 19

13 15 16 17 18 21 20

14 18 19 14 15 18 19

13 15 16 17 18 19 14 20

17 18

------

- - - -

------

- - - -

------

- - -

------

- -

Jul Jul Jul Jul

Apr Apr Apr Apr

Oct Oct Oct

Oct Apr Apr Oct Oct Apr Apr

Jun Jun Jan Jun Jan Jun Jan

Jun Jun Jun Jan Jan Jun Jan

Mar Mar

Feb Feb Mar Mar Feb Feb

Dec Dec Nov Nov Dec Nov Nov Dec

Feb Feb Feb Feb

Dec Nov Nov Dec Dec Nov Dec Nov

Aug Sep Sep Aug Sep Aug Sep

Sep Sep Aug Aug Sep Sep Aug

May May May

May May May P/E 10 yr mean 1SD -1sd Price 5 10 15 20 Source: Company,Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 66: Tech Mahindra 12-month forward PE Chart

(x) (x) 25 25

20 20

15 15

10 10

5 5

0 0

18 19 18 19 17 17

20 20 17 18 19 17 18 19

16 16 17 17 18 20 16 16 17 17 18 20 19 19

16 21 16 21 21 21

17 19 17 19 18 18

18 19 20 18 19 20

20 20 21 21

------

- -

------

- - - -

Jul Jul Jul Jul Jul Jul

Apr Apr

Oct Oct Oct Oct Oct Oct

Jun Jan Jun Jan Jun Jun

Feb Feb Mar Feb Feb Mar Feb Mar Feb Mar

Nov Dec Dec Nov Dec Dec Dec Dec

Sep Sep Aug Sep Sep Aug

May May May May May May P/E 5-Yr Mean 1sd (1)sd P/E 5-Yr Mean 1sd (1)sd Source: Company,Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 67: Mindtree 12-month forward PE Chart

(x) (Rs) 3,000 35

30 2,500

25 2,000 20 1,500 15 1,000 10

5 500

12 13 14 16 17 18 20

15 16 16 19 20 20 21 12 12 13 17

15 19 14 18

12 13 14 16 17 18 21

11 15 15 19 19 20

14 20 12 13 16 17 18

------

- - - -

- - - - -

- -

------

12 14 16 18 20 09 11

09 11 13 18 19 20 21 10 12 14

09 13 15 17 16 18 20

10 12 14 16 17 19 21

11 13 15

08 10 15 17 19

09 11 13 14 16 18 20

------

Jul Jul

Oct Apr Oct Apr Oct Apr

Jan Jan Jun Jan Jan Jun Jun Jan Jun Jun Jun

Mar Mar Mar Mar Mar

Feb Feb

Sep Aug Aug Nov Sep Aug Aug Sep Dec Dec Nov Dec Nov Nov

May May

Jul Jul Jul

Oct Oct Oct Oct Oct Apr Apr Apr

Jan Jan Jan Jan Jun Jan Jun Jun Jun Jun

Mar Mar Mar Mar

Feb Feb Feb

Nov Nov Nov Dec Dec Dec Nov

Sep Sep Sep Aug Aug Aug Aug

May May May May P/E 10-Yr Mean 1 sd (1) sd Price 5 10 15 20 Source: Company,Bloomberg, Nirmal Bang Institutional Equities Research

43 Information Technology Sector

Institutional Equities

Exhibit 68: Persistent Systems 12-month forward PE Chart

(x) (Rs) 35 3,000

30 2,500

25 2,000 20 1,500 15 1,000 10 500 5

0 0

12 13 15 17 19

12 13 14 15 21 17

11 15 16 17 18 19 20

12 14 16 18 19 21

14 16 18 20 13

11 13 15 17 19 20

12 14 15 18 20 13 19

14 17 18 15 21

- - - - -

11 16 17

12 13 19 20

------

12 13 15 16 19 21 14 20

18 17

16 11 17

12 13 14 18 19 20 15

------

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------

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------

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------

Jul Jul Jul Jul

Jul Jul Jul

Oct Oct Oct Apr Apr

Jun Jan Jun Jan Jun Jan

Mar Mar Mar

Feb Feb Feb

Nov Sep Aug Nov Aug Dec Aug Dec Sep Dec Nov

May May May

Apr Apr

Oct Oct Oct

Jun Jan Jan Jun Jun

Mar Mar Mar Mar

Feb Feb Feb Feb

Aug Nov Nov Sep Dec Sep Aug Nov Nov Sep Dec Aug Dec Aug

May May May May P/E 10-yr mean 1sd -1sd Price 5 10 15 20 Source: Company,Bloomberg, Nirmal Bang Institutional Equities Research

44 Information Technology Sector

Institutional Equities

Exhibit 69: Infosys’ one-year forward P/E discount to TCS

(%) 20

(10)

(20)

(30)

(40)

11 12 15 17 18 20 14

17 18 20 21 14 15

13 16 12 17 19 20

12 15 16 21 13 18

14 19 19 13 16

12 14 17 11 15 18 20

------

- - - - -

------

Jul Jul Jul

Apr Apr Oct Oct Oct

Jan Jun Jan Jun Jan Jun

Mar Mar Mar

Feb Feb Feb

Aug Sep Dec Nov Sep Aug Nov Sep Aug Nov Aug Dec Dec Nov

May May May Infosys 1 Yr Forward P/E Discount to TCS (%) Source: Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 70: Wipro P/E discount to TCS – Broken out of a long term trend. Need to see if this sustains 0

(10)

(20)

(30)

(40)

(50)

(60)

11 13 14 15 12

13 14 11 12

11 13 14 17 18 12 15 16 19

17 18 19 21 16 20

17 18 19 16 20

------

- - - - -

Apr Apr Apr Apr Apr

Oct

Jan Jan Jan Jun Jan Jan

Feb

Dec Dec Dec Dec

Aug Aug Aug Sep Sep Aug Aug Sep Sep

May May May May May Wipro 1 Yr Forward P/E Discount to TCS -25 Source: Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 71: HCL Technologies one-year forward P/E discount to TCS

30 20 10 0 (10) (20) (30) (40) (50) (60)

(70)

13 11 18

12 12 14 17 19

10 11 13 15 17 18 20

10 16 11 13 15 18 20

11 14 15 16 17 21 20

12 13 15 17 18 19 20

19 21 14 16

- - -

- - - - -

------

- - - -

Jul Jul Jul

Apr Apr

Oct Oct Oct

Jun Jun Jan Jun Jan Jun Jan

Feb Mar Mar Feb Mar Mar Feb

Nov Dec Dec Nov Nov Dec Nov

Aug Sep Sep Aug Aug Sep Aug

May May May May HCL Tech 1 Yr Forward P/E Discount to TCS -25 Source: Bloomberg, Nirmal Bang Institutional Equities Research

45 Information Technology Sector

Institutional Equities

Exhibit 72: Tech Mahindra one-year forward P/E discount to TCS

(x) 30 20 10 0 (10) (20) (30) (40) (50) (60)

(70)

13 16 19

12 18 21 15

11 12 14 15 17 18 20

11 13 14 16 16 19 19 20 13 17 20

12 13 15 16 18 19 21

11 14 17

- - -

- - - -

------

- - -

Jul Jul Jul

Oct Oct Oct

Apr Apr Apr Apr

Jun Jan Jun Jan Jun Jan Jun

Feb Mar Mar Mar

Nov Dec Nov Sep Dec Sep Dec Aug Aug Nov Nov

May May May Tech Mahindra 1 Yr Forward PE Discount to TCS -35 Source: Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 73: Mindtree one-year forward P/E discount to TCS

(%) 100 80 60 40 20 0 (20) (40) (60) (80)

(100)

18 20 09 11 13 16

08 15 17

14 16 18 09 11

08 13 15 17 20

14 21 14 21

09 11 16 18

10 12 19

- - -

------

- - - -

- - -

Jul Jul Jul Jul

Apr Oct Oct Oct Apr Apr

Jun Jan Jan Jun

Feb Mar Feb Mar Mar Feb

Nov Dec Dec Dec Dec

Sep Aug Sep Sep Aug

May May May Discount -25 Source: Bloomberg, Nirmal Bang Institutional Equities Research

Exhibit 74: Persistent Systems one-year forward P/E discount to TCS

(x) 30 20 10 0 (10) (20) (30) (40) (50) (60)

(70)

18 19 20

12 13 14 16 17 18 20 21 15

12 13 15 16 17 19 11 14 18

- - -

------

Jul Jul Jul Jul Jul Jul Jul Jul Jul

Jan Jan Jan Jan Jan Jan Jun Jun Jan

Dec Dec Dec PSL's 1-Yr fwd P/E discount to TCS -35 Source: Bloomberg, Nirmal Bang Institutional Equities Research

46 Information Technology Sector

Institutional Equities

Summary financials Exhibit 75: TCS Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Revenue (Rsbn) 1,569 1,642 1,905 2,156 2,377 YoY Growth % 7.2 4.6 16.0 13.2 10.3 EBIT (Rsbn) 386 425 496 572 631 % of sales 24.6 25.9 26.0 26.5 26.5 PAT (Rsbn) 323 334 386 443 488 YoY Growth % 2.8 3.2 15.6 14.8 10.0 FDEPS (Rs) 86.2 89.3 104.3 119.7 131.7 ROE (%) 36.6 38.4 42.0 45.3 46.7 Pre Tax ROCE (%) 35.1 36.5 39.8 43.1 44.6 Pre Tax ROIC (%) 55.5 54.9 57.6 59.9 60.5 P/E (x) 38.6 37.2 31.9 27.8 25.2 P/BV (x) 15.0 14.3 13.5 12.3 11.6 Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 76: Infosys Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Revenue (Rsbn) 908 1005 1179 1348 1494 YoY Growth (%) 9.8 10.7 17.4 14.4 10.8 EBIT (Rsbn) 194 246 279 320 350 EBIT (%) 21.3 24.5 23.6 23.8 23.4 Adj. PAT(Rsbn) 166 194 230 254 284 YoY Growth (%) 5.8 16.6 18.7 10.7 11.6 FDEPS-Adjusted (Rs) 38.9 45.5 54.4 60.5 67.6 ROE (%) 25.4 27.2 32.2 35.2 33.1 ROCE (%) 33.4 37.1 42.6 46.6 43.9 Pre Tax ROIC (%) 43.0 45.7 46.8 50.4 52.0 P/E (x) 40.3 34.4 28.8 25.9 23.2 P/BV (x) 10.1 8.7 10.0 8.4 7.1 Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 77: Wipro Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Revenue (Rsbn) 610 619 764 855 930 YoY Growth (%) 4.2 1.5 23.4 11.9 8.8 EBIT (Rsbn) 106 123 138 159 177 EBIT (%) 17.3 19.9 18.1 18.6 19.1 Adj. PAT (Rsbn) 97 108 116 136 155 YoY Growth (%) 8.0 11.4 6.7 17.3 14.5 FDEPS (Rs) 16.6 19.1 20.9 24.5 28.1 ROE (%) 17.2 19.4 19.0 18.6 17.9 Pre Tax ROCE (%) 15.4 18.0 18.7 18.6 17.9 Pre Tax ROIC (%) 32.2 35.9 34.6 34.9 39.8 P/E (x) 32.4 28.2 25.8 22.0 19.2 P/BV (x) 5.3 5.4 4.5 3.7 3.2 Source: Company, Nirmal Bang Institutional Equities Research

47 Information Technology Sector

Institutional Equities

Exhibit 78: HCL Technologies Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Revenue (Rsmn) 706,780 753,790 866,929 984,084 1,087,985 YoY Growth (%) 17.0 6.7 15.0 13.5 10.6 EBIT (Rsmn) 138,530 160,725 174,867 200,590 223,891 EBIT (%) 19.6 21.3 20.2 20.4 20.6 Adj. PAT (Rsmn) 110,620 124,360 135,849 156,076 174,976 YoY Growth (%) 9.3 12.4 9.2 14.9 12.1 FDEPS (Rs) 40.8 45.8 50.1 57.5 59.2 ROE (%) 23.7 22.0 20.9 21.5 21.6 ROCE (%) 25.2 24.1 23.4 24.3 24.5 Pre Tax ROIC (%) 33.3 33.0 33.0 35.3 37.6 P/E(x) 24.2 21.5 19.7 17.1 16.7 P/BV (x) 5.2 4.3 3.9 3.5 3.1 Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 79: Tech Mahindra Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Revenue 368,677 378,551 422,698 483,755 542,579 YoY % 6.1 2.7 11.7 14.4 12.2 EBIT 42,803 53,894 64,767 74,796 84,406 % of sales 11.6 14.2 15.3 15.5 15.6 PAT 40,166 44,272 56,992 64,296 72,698 YoY % (7.0) 10.2 28.7 12.8 13.1 FDEPS Rs 45.2 49.9 64.2 72.4 81.9 ROE (%) 19.2 18.5 21.1 21.4 21.7 Pre Tax ROCE (%) 17.3 19.3 21.8 23.8 24.4 Pre Tax ROIC (%) 28.6 32.8 39.1 40.6 42.1 P/E(x) 23.9 21.7 16.9 14.9 13.2 P/BV (x) 4.4 3.8 3.4 3.1 2.8 Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 80: Mindtree Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Revenue (Rsmn) 77,643 79,678 94,602 108,740 122,423 YoY Growth (%) 10.6 2.6 18.7 14.9 12.6 EBIT (Rsmn) 7,869 13,832 16,577 18,953 21,098 as % of sales 10.1 17.4 17.5 17.4 17.2 Adj. PAT (Rsmn) 6,309 11,105 13,015 14,978 16,853 YoY Growth (%) -16.3 76.0 17.2 15.1 12.5 FDEPS (Rs) 38.3 67.4 79.0 90.9 102.3 RoE (%) 19.5 29.7 27.7 27.1 26.1 Pre Tax RoCE (%) 23.8 35.1 35.1 34.1 32.7 Pre Tax ROIC (%) 33.2 62.4 69.8 68.1 73.9 P/E(x) 67.4 38.3 32.7 28.4 25.2 P/BV (x) 13.5 9.8 8.4 7.1 6.1 Source: Company, Nirmal Bang Institutional Equities Research

48 Information Technology Sector

Institutional Equities

Exhibit 81: Persistent Systems Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Revenue (Rsmn) 35,658 41,879 54,168 67,329 78,621 YoY Growth (%) 5.9 17.4 29.3 24.3 16.8 EBIT (Rsmn) 3,270 5,075 7,683 10,043 12,588 % of sales 9.2 12.1 14.2 14.9 16.0 Adj. PAT (Rsmn) 3,403 4,507 6,580 8,417 10,497 YoY Growth (%) -3.2 32.4 46.0 27.9 24.7 FDEPS (Rs) 44.4 58.8 85.8 109.7 136.9 ROE (%) 14.4 17.4 21.9 24.1 25.5 ROCE (%) 13.8 19.6 25.5 28.7 30.6 Pre Tax ROIC (%) 35.1 57.2 67.3 63.4 68.9 P/E (x) 66.0 49.9 34.2 26.7 21.4 P/BV (x) 9.4 8.0 7.0 6.0 5.0 Source: Company, Nirmal Bang Institutional Equities Research

49 Information Technology Sector

Institutional Equities

Change in our estimates Exhibit 82: TCS New Old Change (%) Change in estimates FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E INR/USD 74.7 76.5 77.0 75.2 76.8 - (0.7) (0.3) - USD Revenue (USD mn) 25,498 28,179 30,873 25,485 28,200 - 0.0 (0.1) - Revenue (Rsbn) 1,905 2,156 2,377 1,917 2,165 - (0.6) (0.4) - EBIT (Rsbn) 496 572 631 496 575 - 0.0 (0.4) - EBIT Margin (%) 26.0 26.5 26.5 25.9 26.5 - - - - PAT (Rsbn) 386 443 488 386 446 - (0.1) (0.7) - FDEPS (Rs) 104.3 119.7 131.7 104.3 120.6 - (0.1) (0.7) - Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 83: Infosys New Old Change (%) Change in estimates FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E INR/USD 74.7 76.5 77.0 75.2 76.8 - (0.7) (0.3) - USD Revenue (USD mn) 15,780 17,627 19,401 15,621 17,313 - 1.0 1.8 - Revenue (Rsbn) 1179 1348 1494 1175 1,329 - 0.3 1.5 - EBIT (Rsbn) 279 320 350 282 317 - (1.2) 1.1 - EBIT Margin (%) 23.6 23.8 23.4 24.0 23.8 - - - - PAT Adjusted (Rsbn) 230 254 284 231 260 - (0.8) (2.3) - FDEPS-Adjusted (Rs) 54.4 60.5 67.6 54.4 61.2 - (0.2) (1.1) - Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 84: Wipro New Old Change (%) Change in estimates FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E INR/USD 75.7 77.5 78.0 75.2 76.8 - 0.7 0.9 - IT Services USD Revenue 9,908 10,851 11,744 9,785 10,773 - 1.3 0.7 - (USD mn) Revenue (Rsbn) 764 855 930 760 852 - 0.6 0.4 - EBIT (Rsbn) 138 159 177 136 157 - 1.9 1.1 - EBIT Margin (%) 18.1 18.6 19.1 17.8 18.5 - - - - PAT (Rsbn) 116 136 155 112 133 - 3.4 2.1 - FDEPS (Rs) 20.9 24.5 28.1 20.2 24.0 - 3.4 2.1 - Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 85: HCL Technologies New Old Change (%) Change in estimates FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E INR/USD 74.7 76.5 77.0 75.2 76.8 - (0.7) (0.4) - USD Revenue (USD mn) 11,602 12,864 14,130 11,673 12,928 - (0.6) (0.5) - Revenue (Rsmn) 866,929 984,084 1,087,985 878,106 992,389 - (1.3) (0.8) - EBIT (Rsmn) 174,867 200,590 223,891 181,166 204,523 - (3.5) (1.9) - EBIT Margin (%) 20.2 20.4 20.6 20.6 20.6 - - - - PAT (Rsmn) 135,849 156,076 174,976 140,505 158,491 - (3.3) (1.5) - FDEPS (Rs) 50.1 57.5 59.2 51.8 58.4 - (3.4) (1.5) - Source: Company, Nirmal Bang Institutional Equities Research

50 Information Technology Sector

Institutional Equities

Exhibit 86: Tech Mahindra New Old Change (%) Change in estimates FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E INR/USD 74.7 76.5 77.0 75.2 76.8 - (0.7) (0.3) - USD Revenue (USD mn) 5,657 6,324 7,046 5,644 6,321 - 0.2 0.0 - Revenue (Rsmn) 422,698 483,755 542,579 424,477 485,232 - (0.4) (0.3) - EBIT (Rsmn) 64,767 74,796 84,406 64,846 74,054 - (0.1) 1.0 - EBIT Margin (%) 15.3 15.5 15.6 15.3 15.3 - - - - PAT (Rsmn) 56,992 64,296 72,698 56,877 62,993 - 0.2 2.1 - EPS (Rs) 64.2 72.4 81.9 64.1 71.0 - 0.2 2.1 - Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 87: Mindtree New Old Change (%) Change in estimates FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E INR/USD 74.6 76.5 77.0 75.2 76.8 - (0.8) (0.4) - USD Revenue (USD mn) 1,266 1,421 1,590 1,266 1421 - - - - Revenue (Rsmn) 94,602 108,740 122,423 95,239 109,118 - (0.7) (0.3) - EBIT (Rsmn) 16,577 18,953 21,098 16,546 18728 - 0.2 1.2 - EBIT Margin (%) 17.5 17.4 17.2 17.4 17.2 - - - - PAT (Rsmn) 13,015 14,978 16,853 13,001 14,850 - 0.1 0.9 - EPS (Rs) 79.0 90.9 102.3 78.9 90.2 - 0.1 0.9 - Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 88: Persistent Systems New Old Change (%) Change in estimates FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E INR/USD 74.6 76.5 77 75.2 76.8 - (0.8) (0.4) - USD Revenue (USD mn) 725 880 1,021 694 811 - 4.4 8.5 - Revenue (Rsmn) 54,168 67,329 78,621 52,245 62,294 - 3.7 8.1 - EBIT (Rsmn) 7,683 10,043 12,588 7,045 8,858 - 9.1 13.4 - EBIT Margin (%) 14.2 14.9 16.0 13.5 14.2 - -

PAT (Rsmn) 6,580 8,417 10,497 6,161 7,628 - 6.8 10.4 - FDEPS (Rs) 85.8 109.7 137 80.3 99.4 - 6.8 10.4 - Source: Company, Nirmal Bang Institutional Equities Research

51 Information Technology Sector

Institutional Equities

NBIE vs Consensus Estimates Exhibit 89: TCS TCS Consensus NBIE NBIE/Consensus FY22E FY23E FY24E FY22E FY23E FY24E FY21E FY22E FY23E Revenues (Rsbn) 1,893 2,108 2,327 1,905 2,156 2,377 101% 102% 102% EBIT (Rsbn) 500 558 609 496 572 631 99% 103% 104% PAT Adj (Rsbn) 396 442 482 386 443 488 97% 100% 101% FDEPS Adj (Rs) 106.7 119.5 131.9 104.3 119.7 131.7 98% 100% 100% EBIT Margin (%) 26.4 26.5 26.2 26.0 26.5 26.5 - - -

Exhibit 90: Infosys Infosys Consensus NBIE NBIE/Consensus FY22E FY23E FY24E FY22E FY23E FY23E FY21E FY22E FY23E Revenue (Rsbn) 1,166 1,307 1,457 1,179 1,348 1494 101% 103% 103% EBIT (Rsbn) 280 314 344 279 320 350 100% 102% 102% PAT Adj (Rsbn) 224 252 280 230 254 284 103% 101% 101% FDEPS Adj (Rs) 52.9 59.5 65.9 54.4 60.5 68 103% 102% 103% EBIT Margin (%) 24.0 24.0 23.8 23.6 23.8 23 - - - Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 91: Wipro Wipro Consensus NBIE NBIE/Consensus FY22E FY23E FY24E FY22E FY23E FY24E FY21E FY22E FY23E Revenue (Rsbn) 736 811 863 764 855 930 104% 105% 108% EBIT (Rsbn) 133 147 156 138 159 177 104% 108% 113% PAT (Rsbn) 114 126 137 116 136 155 101% 108% 113% FDEPS (Rs) 20.6 23.0 24.9 20.9 24.5 28.1 102% 107% 113% EBIT Margin (%) 18.0 18.1 18.1 18.1 18.6 19.1 - - - Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 93: HCL Technologies HCL TECH Consensus NBIE NBIE/Consensus FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E Revenue (Rsbn) 853 949 1,040 867 984 1,088 102% 104% 105% EBIT (Rsbn) 176 196 214 175 201 224 100% 102% 104% PAT (Rsbn) 138 156 172 136 156 175 98% 100% 102% EPS (Rs) 51.3 57.8 62.9 50.1 57.5 59.2 98% 99% 94% EBIT Margin (%) 20.6 20.7 20.6 20.2 20.4 20.6

Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 94: Tech Mahindra Tech Mahindra Consensus NBIE NBIE/Consensus FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E Revenue (Rsbn) 422 467 508 423 484 543 100% 104% 107% EBIT (Rsbn) 64 71 75 65 75 84 101% 106% 112% PAT (Rsbn) 53 59 64 57 64 73 107% 109% 114% EPS (Rs) 60.5 66.8 72.5 64.2 72.4 81.9 106% 108% 113% EBIT Margin (%) 15.2 15.1 14.8 15.3 15.5 15.6 - - - Source: Company, Nirmal Bang Institutional Equities Research

52 Information Technology Sector

Institutional Equities

Exhibit 95: Mindtree Mindtree Consensus NBIE NBIE/Consensus FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E Revenue (Rsmn) 92,617 104,417 114,668 94,602 108,740 122,423 102% 104% 107% EBIT (Rsmn) 16,424 18,333 20,375 16,577 18,953 21,098 101% 103% 104% PAT (Rsmn) 13,051 14,525 16,915 13,015 14,978 16,853 100% 103% 100% EPS (Rs) 78.5 88.0 103.1 79.0 90.9 102.3 101% 103% 99% EBIT Margin (%) 17.7 17.6 17.8 17.5 17.4 17.2 - - - Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 96: Persistent Systems Consensus NBIE NBIE/Consensus Persistent FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E Revenue (Rsmn) 49,487 57,077 64,776 54,168 67,329 78,621 109% 118% 121% EBIT (Rsmn) 6,493 7,768 9,123 7,683 10,043 12,588 118% 129% 138% PAT (Rsmn) 5,832 6,966 8,003 6,580 8,417 10,497 113% 121% 131% EPS (Rs) 74.1 88.9 100.4 85.8 109.7 136.9 116% 123% 136% EBIT Margin (%) 13.1 13.6 14.1 14.2 14.9 16.0 - - - Source: Company, Nirmal Bang Institutional Equities Research

53 Information Technology Sector

Institutional Equities

Financials -TCS Exhibit 97: Income statement Exhibit 98: Cash flow Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Average INR/USD 71.0 74.1 74.7 76.5 77.0 EBIT 386 425 496 572 631 Net Sales (USD mn) 22,032 22,174 25,498 28,179 30,873 (Inc.)/dec. in working capital 75 11 (59) (41) (36) -Growth (%) 5.4 0.6 15.0 10.5 9.6 Cash flow from operations 461 436 437 531 595 Net Sales 1,569 1,642 1,905 2,156 2,377 Other income 37 25 22 22 23 -Growth (%) 7.2 4.6 16.0 13.2 10.3 Depreciation & amortisation 35 41 46 54 63 Cost of Sales & Services 923 971 1,139 1,275 1,407 Financial expenses - - - - - Gross Margin 646 670 766 881 970 Tax paid (98) (115) (131) (150) (165) % of sales 41.2 40.8 40.2 40.9 40.8 Dividends paid (330) (171) (402) (455) (509) SG& A 260 246 270 309 339 Net cash from operations 105 216 (28) 3 7 % of sales 16.6 15.0 14.1 14.3 14.3 Capital expenditure (19) (22) (24) (28) (30) EBIT 386 425 496 572 631 Net cash after capex 86 193 (52) (25) (23) EBIT Margin (%) 24.6 25.9 26.0 26.5 26.5 Inc./(dec.) in debt (1) - - - - Other income (net) 37 25 22 22 23 (Inc.)/dec. in investments 30 (30) - - - PBT 422 450 518 594 654 Equity issue/(Share Buyback) - (192) - - - -PBT margin (%) 26.9 27.4 27.2 27.6 27.5 Cash from financial activities 29 (222) - - - Provision for tax 98 115 131 150 165 Others (145) 30 23 24 25 Effective tax rate (%) 23.2 25.5 25.2 25.2 25.2 Opening cash 127 97 98 69 68 Minority Interest 1 1 1 1 1 Closing cash 96 98 69 68 71 Net profit 323 334 386 443 488 Change in cash (30) 1 (29) (1) 2 -Growth (%) 2.8 3.2 15.6 14.8 10.0 Source: Company, Nirmal Bang Institutional Equities Research -Net profit margin (%) 20.6 20.3 20.3 20.6 20.5 Average Shares outstanding- 3,752 3,728 3,703 3,703 3,703 Basic Source: Company, Nirmal Bang Institutional Equities Research Exhibit 100: Key ratios Exhibit 99: Balance sheet Y/E March FY20 FY21 FY22E FY23E FY24E Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Per Share (Rs) Equity capital 3.8 3.7 3.7 3.7 3.7 EPS 86.2 89.3 104.3 119.7 131.7 Reserves & surplus 844 889 941 1,007 1,073 FDEPS 86.2 89.3 104.3 119.7 131.7 Net worth 847 892 945 1,011 1,076 Dividend Per Share 73.0 38.1 90.0 102.0 114.0 Minority Interest - - - - - Dividend Yield (%) 2.2 1.1 2.7 3.1 3.4 Other liabilities 22 30 28 31 34 Book Value 221 233 247 269 287 Total loans - - - - - Dividend Payout Ratio (incl DT) 84.7 42.5 86.3 85.2 86.6 Lease Laibilities 82 78 78 78 78 Return ratios (%) Total liabilities 951 1,000 1,051 1,120 1,188 RoE 36.6 38.4 42.0 45.3 46.7 Goodwill 20 44 44 44 44 Pre Tax RoCE 35.1 36.5 39.8 43.1 44.6 Net block (incl. CWIP) 118 121 144 170 197 Pre Tax ROIC 55.5 54.9 57.6 59.9 60.5 Investments 2 2 2 2 2 Turnover Ratios Deferred tax asset - net 28 39 44 50 55 Asset Turnover Ratio 1.3 1.2 1.4 1.4 1.5 Other non-current assets 54 42 45 47 50 Debtor Days (incl. unbilled Rev) 85 82 82 82 82 Right of use asset 80 76 76 76 76 Working Capital Cycle Days 49 46 49 49 50 Other current assets 443 535 550 566 580 Valuation ratios (x) Debtors 367 370 428 483 531 PER 38.6 37.2 31.9 27.8 25.2 Cash & bank balance 86 69 59 49 49 P/BV 15.0 14.3 13.5 12.3 11.6 Bank deposits 10 30 11 20 22 EV/EBTDA 30.0 27.2 23.4 19.9 17.9 Total current assets 906 1,003 1,047 1,117 1,182 EV/Sales 8.1 7.7 6.7 5.8 5.2 Total current liabilities 258 329 351 387 418 M-cap/Sales 8.1 7.8 6.7 5.8 5.2 Net current assets 648 675 695 730 764 Source: Company, Nirmal Bang Institutional Equities Research Total assets 951 1,000 1,051 1,120 1,188 Source: Company, Nirmal Bang Institutional Equities Research

54 Information Technology Sector

Institutional Equities

Financials - Infosys Exhibit 101: Income statement Exhibit 102: Cash flow Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Average INR/USD 71.0 74.1 74.7 76.5 77.0 EBIT 194 246 279 320 350 Net Sales (USD mn) 12,781 13,562 15,780 17,627 19,401 (Inc.)/dec. in working capital (8) 15 (34) (28) (27) -Growth (%) 8.3 6.1 16.4 11.7 10.1 Cash flow from operations 186 261 245 293 323 Net Sales 908 1,005 1,179 1,348 1,494 Other Income 28 22 25 17 26 -Growth (%) 9.8 10.7 17.4 14.4 10.8 Depreciation & Amortisation 29 33 31 35 39 Direct Costs 607 654 765 876 972 Financial Expenses (2) (2) (2) (2) (2) Gross Margin 301 351 414 472 522 Tax Paid (54) (72) (77) (85) (95) % of sales 33.1 34.9 35.1 35.0 34.9 Dividends Paid (90) (115) (115) (127) (142) SG& A 107 104 135 152 172 Net Cash from Operations 98 127 108 130 149 % of sales 11.8 10.4 11.5 11.3 11.5 Capital Expenditure (62) (42) (40) (44) (48) EBIT 194 246 279 320 350 Net Cash after Capex 36 86 68 86 101 % of sales 21.3 24.5 23.6 23.8 23.4 Inc./(Dec.) in Debt - - - - - Other income (net) 28 22 25 17 26 (Inc.)/Dec. in Investments (17) (60) 0 0 0 PBT 220 266 306 339 378 Share Issue/(Share Buyback) (83) 0 (111) 0 0 -PBT margin (%) 24.2 26.5 26.0 25.1 25.3 Cash from Financial Activities (100) (60) (111) 0 0 Provision for tax 54 72 77 85 95 Others 54 35 (108) 4 4 Effective tax rate (%) 24.4 27.1 25.0 25.0 25.0 Opening Cash 196 186 247 96 186 Net profit (adjusted) 166 194 230 254 284 Closing Cash 186 247 96 186 291 -Growth (%) 5.8 16.6 18.7 10.7 11.6 Change in Cash (9) 60 (151) 90 105 -Net profit margin (%) 18.3 19.3 19.5 18.8 19.0 Source: Company, Nirmal Bang Institutional Equities Research Shares Outstanding (Basic) 4,240 4,244 4,191 4,191 4,191 Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 104: Key ratios Exhibit 103: Balance sheet Y/E March FY20 FY21 FY22E FY23E FY24E Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Per Share (Rs) Equity capital 21.2 21.2 20.7 20.7 20.7 EPS-Adjusted 39.0 45.6 54.5 60.6 67.7 Reserves & surplus 637 747 639 766 908 FDEPS-Adjusted 38.9 45.5 54.4 60.5 67.6 Net worth 658 768 659 787 928 Dividend Per Share 17.5 27.0 27.2 30.3 33.8 Deferred tax liability 10 9 9 9 9 Dividend Yield (%) 1.1 1.7 1.7 1.9 2.2 Other liabilities 11 23 23 23 23 Book Value 155 181 157 188 222 Lease Liabilities 40 46 46 46 46 Dividend Payout Ratio (incl DT) 53.9 59.2 50.0 50.0 50.0 Total liabilities and Equity 719 845 737 864 1,006 Return ratios (%) Goodwill 53 61 61 61 61 RoE 25.4 27.2 32.2 35.2 33.1 Other intangible assets 19 21 21 21 21 Pre Tax RoCE 33.4 37.1 42.6 46.6 43.9 Net block 137 136 145 154 164 Pre Tax ROIC 43.0 45.7 46.8 50.4 52.0 Investments 88 142 142 142 142 Turnover Ratios Deferred tax asset - net 17 11 11 11 11 Asset Turnover Ratio 1.0 0.9 1.2 1.2 1.1 Other non-current assets 73 75 86 94 102 Debtor Days (incl. unbilled Rev) 102 98 99 97 97 Unbilled revenue 71 81 96 107 119 Working Capital Cycle Days 41 37 39 39 40 Derivative financial instrument 1 2 2 2 2 Valuation ratios (x) Other current assets 56 67 77 87 96 PER 40.3 34.4 28.8 25.9 23.2 Income tax assets-current 0 - - - - P/BV 10.1 8.7 10.0 8.4 7.1 Debtors 185 193 227 255 282 EV/EBTDA 29.8 23.5 21.7 18.6 16.8 Cash & bank balance 186 247 96 186 291 EV/Sales 7.3 6.5 5.7 4.9 4.4 Right-of-use Assets 42 48 48 48 48 M-cap/Sales 7.5 6.8 5.8 5.1 4.6 Total current assets 541 638 546 685 838 Total current liabilities 209 239 275 304 333 Source: Company, Nirmal Bang Institutional Equities Research Net current assets 332 399 271 381 505 Total assets 719 845 737 864 1,006 Source: Company, Nirmal Bang Institutional Equities Research

55 Information Technology Sector

Institutional Equities

Financials –Wipro Exhibit 105: Income statement Exhibit 106: Cash flow Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY24E Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY23E Average INR/USD 72.5 74.0 75.7 77.5 78.0 EBIT 106 123 138 159 177 Net Sales - IT Services (USD 8,256 8,138 9,908 10,851 11,744 (Inc.)/dec. in working capital (11) 18 (24) (5) (5) mn) -Growth (%) 0.8 -1.4 21.8 9.5 8.2 Cash flow from operations 95 141 114 154 172 Net Sales - Overall 610 619 764 855 930 Other income 24 21 15 19 26 -Growth (%) 4.2 1.5 23.4 11.9 8.8 Depreciation & amortisation 20 36 30 33 36 Cost of Sales & Services 436 423 537 597 646 Financial expenses (7) (5) (5) (5) (5) % of sales 71.5 68.3 70.3 69.8 69.5 Tax paid (25) (30) (32) (37) (43) Gross profit 174 196 227 258 284 Dividends paid (5) (6) (6) (7) (8) % of sales 28.5 31.7 29.7 30.2 30.5 Net cash from operations 101 157 116 157 179 SG& A 73 76 90 100 108 Capital expenditure (21) (14) (127) (20) (20) % of sales 11.9 12.3 11.8 11.7 11.6 Net cash after capex 81 143 (10) 137 159 EBIT 106 123 138 159 177 Inc./(dec.) in debt (21) 5 0 0 0 % of sales 17.3 19.9 18.1 18.6 19.1 (Inc.)/dec. in investments 29 13 55 (80) (80) Interest expenses 7 5 5 5 5 Equity issue/(buyback) (105) (116) 0 0 0 Other income (net) 24 21 15 19 26 Cash from financial activities (98) (98) 55 (80) (80) PBT 123 139 148 173 199 Others 3 (12) (5) (1) (1) -PBT margin (%) 20.1 22.4 19.4 20.3 21.3 Opening cash 159 144 170 210 267 Provision for tax 25 30 32 37 43 Closing cash 144 178 210 267 345 Effective tax rate (%) 20.2 21.8 21.5 21.5 21.5 Change in cash (14) 33 40 56 78 Minority Interest 0.5 0.3 0.6 0.6 0.6 Source: Company, Nirmal Bang Institutional Equities Research Net profit 97 108 116 136 155 -Growth (%) 8.0 11.4 6.7 17.3 14.5 -Net profit margin (%) 15.9 17.5 15.1 15.9 16.7

Number of Shares (Fully Diluted) 5,703 5,525 5,525 5,525 5,525 Exhibit 108: Key ratios in Mn Source: Company, Nirmal Bang Institutional Equities Research Y/E March FY20 FY21 FY22E FY23E FY24E Per Share (Rs) Exhibit 107: Balance sheet EPS 16.7 19.2 21.0 24.6 28.2 Y/E March (Rsbn) FY20 FY21 FY22E FY23E FY23E FDEPS 16.6 19.1 20.9 24.5 28.1 Equity capital 11 11 11 11 11 Dividend Per Share 1.0 1.0 1.0 1.2 1.4 Reserves & surplus 548 544 653 782 930 Net worth 559 555 664 793 941 Dividend Yield (%) 0.2 0.2 0.2 0.2 0.3 Deferred tax liability, net (3) 3 3 3 3 Book Value 102 101 121 144 171 Other liabilities 21 21 21 21 21 Dividend Payout Ratio (%) 5.6 5.3 5.0 5.0 5.0 Total loans 5 7 7 7 7 Return ratios (%) Lease Liability 19 21 17 17 17 RoE 17.2 19.4 19.0 18.6 17.9 Total liabilities 601 607 713 842 989 Pre Tax RoCE 15.4 18.0 18.7 18.6 17.9 Goodwill 131 139 139 139 139 Pre Tax ROIC 32.2 35.9 34.6 34.9 39.8 Other intangible assets 16 13 120 120 120 Turnover Ratios Net block 81 85 76 63 47 Investments 200 188 133 213 293 Asset Turnover Ratio 0.7 0.7 0.8 0.8 0.7 Other non-current assets 29 31 31 31 31 Debtor Days (incl. unbilled Rev) 81 74 82 80 80 Unbilled receivables 25 27 32 35 38 Working Capital Cycle Days 28 17 25 24 24 Inventories 2 1 1 1 1 Valuation ratios (x) Other current assets 55 61 68 71 74 PER 32.4 28.2 25.8 22.0 19.2 Receivables 111 99 140 153 167 P/BV 5.3 5.4 4.5 3.7 3.2 Cash & bank balance 144 170 210 267 346 EV/EBTDA 21.5 17.1 16.2 13.5 11.4 Right-of-use Assets 17 16 16 16 16 EV/Sales 4.4 4.4 3.6 3.0 2.6 Total current assets 354 374 467 543 642 Total current liabilities 210 222 252 267 282 M-cap/Sales 4.9 4.8 3.9 3.5 3.2 Net current assets 144 151 215 277 360 Source: Company, Nirmal Bang Institutional Equities Research Total assets 601 607 713 842 989 Source: Company, Nirmal Bang Institutional Equities Research

56 Information Technology Sector

Institutional Equities

Financials – HCL Technologies Exhibit 109: Income statement Exhibit 110: Cash flow Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Average INR/USD 72.2 74.2 74.7 76.5 77.0 EBIT 138,530 160,725 174,867 200,590 223,891 Net Sales (USD mn) 9,936 10,175 11,602 12,864 14,130 (Inc.)/Dec. in Working Capital 50,160 (36,450) (31,401) (10,027) (10,505) YoY Growth (%) 15.1 2.4 14.0 10.9 9.8 Cash flow from Operations 188,690 124,275 143,466 190,563 213,386 INR Net Sales 706,780 753,790 866,929 984,084 1,087,98 Other Income 1,790 6,575 5,967 7,034 8,766 5 YoY Growth (%) 17.0 6.7 15.0 13.5 10.6 Depreciation & Amortisation 28,400 39,845 45,550 46,535 47,519 Cost of Sales & Services 443,080 445,910 528,554 596,613 661,844 Tax Paid (29,460) (36,625) (44,304) (50,868) (57,001) Gross Margin 263,700 307,880 338,375 387,471 426,142 Dividends Paid 19,551 70,555 65,128 75,983 78,696 % of sales 37.3 40.8 39.0 39.4 39.2 Net Cash from Operations 208,971 204,625 215,807 269,247 291,367 SG&A 96,770 107,310 117,958 140,346 154,732 Capital Expenditure (150,090) (37,145) (53,240) (54,289) (55,273) % of sales 13.7 14.2 13.6 14.3 14.2 Net Cash after Capex 58,881 167,480 162,567 214,958 236,093 EBITDA 166,930 200,570 220,417 247,125 271,410 Inc./(dec.) in Debt 35,780 (13,900) 0 0 0 % of sales 23.6 26.6 25.4 25.1 24.9 (Inc.)/Dec. in Investments (58,880) (38,060) (36,736) (65,892) (73,630) Depreciation and Amortization 28,400 39,845 45,550 46,535 47,519 Equity Issue/(Buyback) 0 0 0 0 0 % of sales 4.0 5.3 5.3 4.7 4.4 Cash from Financial Activities 29,301 27,453 23,628 23,006 23,006 EBIT 138,530 160,725 174,867 200,590 223,891 Others (99,042) (178,213) (186,195) (237,964) (259,099) % of sales 19.6 21.3 20.2 20.4 20.6 Opening Cash 59,290 48,430 65,150 65,150 65,150 Other income (net) (incl forex 1,790 6,575 5,967 7,034 8,766 Closing Cash 48,430 65,150 65,150 65,150 65,150 gain/loss) PBT 140,320 167,300 180,834 207,624 232,657 Change in Cash (10,860) 16,720 - - - Provision for tax 29,460 36,625 44,304 50,868 57,001 Source: Company, Nirmal Bang Institutional Equities Research Effective tax rate (%) 21.0 21.9 24.5 24.5 24.5 Minority Interest 0 0 0 0 0 Net profit 110,620 124,360 135,849 156,076 174,976

-Growth (%) 9.3 12.4 9.2 14.9 12.1 Exhibit 112: Key ratios -Net profit margin (%) 15.7 16.5 15.7 15.9 16.1 Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Source: Company, Nirmal Bang Institutional Equities Research Per Share (Rs) EPS 40.8 45.8 50.1 57.5 64.5 Exhibit 111: Balance sheet FDEPS 40.8 45.8 50.1 57.5 59.2 Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Dividend Per Share 6.0 26.0 24.0 28.0 29.0 Equity capital 1,356 1,356 1,356 1,356 1,356 Dividend Yield (%) 0.6 2.6 2.4 2.8 2.9 Minority Interest 5,280 5,850 5,850 5,850 5,850 Book Value 190 227 253 282 315 Reserves & surplus 515,514 613,704 684,425 764,519 852,658 Dividend Payout Ratio (excl DDT) 14.7 56.7 47.9 48.7 45.0 Net worth 516,870 615,060 685,781 765,875 854,014 Return ratios (%) Other liabilities 25,480 26,830 31,936 35,515 39,264 RoE 23.7 22.0 20.9 21.5 21.6 Total loans 50,920 39,070 39,070 39,070 39,070 Pre Tax RoCE 25.2 24.1 23.4 24.3 24.5 Lease Liabilites 24,720 22,670 22,670 22,670 22,670 Pre Tax ROIC 33.3 33.0 33.0 35.3 37.6 Total liabilities 623,270 709,480 785,307 868,980 960,868 Tunover Ratios Intangible assets 294,210 291,500 0 0 0 Asset Turnover Ratio 0.8 0.9 0.9 0.9 0.9 Net block 62,440 62,450 361,640 369,394 377,148 Debtor Days (incl. unbilled Rev) 92 85 86 84 84 Investments 380 470 470 470 470 Working Capital Cycle Days 11 28 38 37 37 Other non-Current assets 64,650 68,170 79,169 88,042 97,337 (FD,etc) Valuation ratios (x) Debtors 177,720 175,250 203,527 226,336 250,232 PER 24.2 21.5 19.7 17.1 16.7 Cash & bank balance 48,430 65,150 65,150 65,150 65,150 P/BV 5.2 4.3 3.9 3.5 3.1 Other Current assets 158,090 190,120 222,515 285,926 356,956 EV/EBTDA 15.5 12.6 11.4 9.9 8.8 Right of use assets 26,240 23,920 23,920 23,920 23,920 EV/Sales 3.7 3.4 2.9 2.5 2.2 Total Current assets 410,480 454,440 515,112 601,332 696,258 M-cap/Sales 3.8 3.5 3.1 2.7 2.5 Total Current liabilities 208,890 167,550 171,085 190,257 210,345 Source: Company, Nirmal Bang Institutional Equities Research Net Current assets 201,590 286,890 344,028 411,074 485,913

Total assets 623,270 709,480 785,307 868,980 960,868 Source: Company, Nirmal Bang Institutional Equities Research

57 Information Technology Sector

Institutional Equities

Financials –Tech Mahindra Exhibit 113: Income statement Exhibit 114: Cash flow Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Average INR/USD 71.0 74.1 74.7 76.5 77.0 EBIT 42,803 53,894 64,767 74,796 84,406 Net Sales (US$m) 5,182 5,111 5,657 6,324 7,046 (Inc.)/dec. in working capital (11,836) 9,971 (12,685) (18,595) (6,222) -Growth (%) 4.3 -1.4 10.7 11.8 11.4 Cash flow from operations 30,967 63,865 52,082 56,202 78,184 Net Sales 368,677 378,551 422,698 483,755 542,579 -Growth (%) 6.1 2.7 11.7 14.4 12.2 Other income 11,924 7,871 12,050 11,383 12,756 Cost of Sales & Services 259,743 258,555 283,735 327,852 368,053 Depreciation & amortisation 14,458 14,577 15,450 16,340 17,348 Gross Profit 108,934 119,996 138,962 155,904 174,527 Financial expenses (1,919) (1,740) (1,392) (950) (655) % of sales 29.5 31.7 32.9 32.2 32.2 Tax paid (11,604) (15,999) (19,233) (21,733) (24,610) SG& A 51,673 51,525 58,746 64,767 72,772 Dividends paid (15,506) (39,330) (28,496) (32,148) (36,349) % of sales 14.0 13.6 13.9 13.4 13.4 Net cash from operations 28,320 29,244 30,461 29,094 46,675 EBITDA 57,261 68,471 80,217 91,137 101,754 Capital expenditure (9,521) (8,838) (9,200) (12,000) (12,000) % of sales 15.5 18.1 19.0 18.8 18.8 Net cash after capex 18,799 20,406 21,261 17,094 34,675 Depreciation 14,458 14,577 15,450 16,340 17,348 % of sales 3.9 3.9 3.7 3.4 3.2 Inc./(dec.) in debt 18,678 (654) (22,373) (4,000) (1,225) EBIT 42,803 53,894 64,767 74,796 84,406 (Inc.)/dec. in investments (7,319) (186) (4,447) (5,242) (4,750) % of sales 11.6% 14.2% 15.3% 15.5% 15.6% Equity issue/(buyback) (78) 11 - - - Amortisation of goodwill 2,175 - - - - Cash from financial activities 11,281 (829) (2,509) (2,509) (2,509) Interest expenses 1,919 1,740 1,392 950 655 Others (31,960) 17,788 (26,850) (9,272) (6,005) Other income (net) 11,924 7,871 12,050 11,383 12,756 Opening cash 89,486 87,606 124,971 116,873 122,186 Share of profit from associate -55 - - - - Closing cash 87,606 124,971 116,873 122,186 148,347 PBT 50,578 60,025 75,425 85,229 96,508 Change in cash (1,880) 37,365 (8,098) 5,313 26,161 -PBT margin (%) 13.7 15.9 17.8 17.6 17.8 Provision for tax 11,604 15,999 19,233 21,733 24,610 Source: Company, Nirmal Bang Institutional Equities Research Effective tax rate (%) 22.9 26.7 25.5 25.5 25.5 Minority Interest 1,356 750 800 800 800 Net profit 40,166 44,272 56,992 64,296 72,698 -Growth (%) -6.2 7.3 28.0 13.2 13.4 Exhibit 116: Key ratios -Net profit margin (%) 10.9 11.7 13.5 13.3 13.4 Y/E March FY19 FY20 FY21E FY22E FY23E Source: Company, Nirmal Bang Institutional Equities Research Per Share (Rs) FDEPS 45.2 49.9 64.2 72.4 81.9 Exhibit 115: Balance sheet Dividend Per Share 16.1 45.0 32.6 36.8 41.6 Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Dividend Yield (%) 1.5 4.1 3.0 3.4 3.8 Equity capital 4,359 4,370 4,370 4,370 4,370 Book Value 250 284 317 354 395 Reserves & surplus 213,772 244,280 272,776 304,924 341,273 Dividend Payout Ratio (%. Incl DDT) 38.4 90.9 51.4 51.3 51.1 Net worth 218,131 248,650 277,146 309,294 345,643 Return ratios (%) Minority Interest 3,933 3,795 3,795 3,795 3,795 RoE 19.2 18.5 21.1 21.4 21.7 Other liabilities 28,104 30,677 12,304 12,304 12,304 Total loans 14,110 10,883 6,883 2,883 1,658 Pre Tax RoCE 17.3 19.3 21.8 23.8 24.4 Total liabilities 264,278 294,005 300,128 328,276 363,400 Pre Tax ROIC 28.6 32.8 39.1 40.6 42.1 Goodwill 33,877 40,082 40,082 40,082 40,082 Tunover Ratios Net block (incl. CWIP) 43,614 41,214 38,303 37,302 35,293 Asset Turnover Ratio 1.0 1.0 1.0 1.1 1.1 Investments 6,526 10,294 10,294 10,294 10,294 Debtor Days (not including unbilled) 75 62 71 71 70 Right of Use Asset 11,730 10,072 10,072 10,072 10,072 Working Capital Cycle Days 35 24 33 43 42 Deferred tax asset - net 8,443 9,133 9,133 9,133 9,133 Valuation ratios (x) Other non-current assets 37,425 33,153 37,600 42,842 47,591 PER 23.9 21.7 16.9 14.9 13.2 Other current assets 30,632 29,331 33,265 37,903 42,105 Debtors 75,772 64,728 82,763 94,300 104,755 P/BV 4.4 3.8 3.4 3.1 2.8 Loans & Advances 37,552 33,560 38,062 43,368 48,176 EV/EBITDA 15.3 12.2 10.5 9.1 7.9 Cash & bank balance 87,606 124,971 116,873 122,186 148,347 EV/Sales 2.4 2.2 2.0 1.7 1.5 Inventory 358 242 242 242 242 M-cap/Sales 2.6 2.5 2.3 2.0 1.8 Total current assets 231,920 252,832 271,205 297,998 343,625 Source: Company, Nirmal Bang Institutional Equities Research Total current liabilities 109,257 102,775 116,561 119,447 132,690

Net current assets 122,663 150,057 154,644 178,551 210,935 Total assets 264,278 294,005 300,128 328,276 363,400 Source: Company, Nirmal Bang Institutional Equities Research

58 Information Technology Sector

Institutional Equities

Financials - Mindtree

Exhibit 117: Income statement Exhibit 118: Cash flow Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Average INR/USD 70.9 74.0 74.6 76.5 77.0 EBIT 7,869 13,832 16,577 18,953 21,098 Net Sales (USD mn) 1,089 1,077 1,266 1,421 1,590 (Inc.)/dec. in working capital 3,225 3,575 (9,395) (322) (1,693) YoY Growth (%) 8.7 -1.1 17.6 12.3 11.9 Cash flow from operations 11,094 17,407 7,182 18,631 19,405 Net Sales 77,643 79,678 94,602 108,740 122,423 YoY Growth (%) 10.6 2.6 18.7 14.9 12.6 Other income 948 1,656 1,366 1,683 2,118 Employee benefits expense 50,647 51,132 61,394 70,916 80,225 Depreciation & amortisation 2,754 2,596 2,913 3,104 3,349 % of sales 65.2 64.2 64.9 65.2 65.5 Financial expenses (529) (504) (474) (532) (595) Gross Margin 26996 28546 33208 37824 42198 Tax paid (1,979) (3,879) (4,455) (5,127) (5,768) % of sales 34.8 35.8 35.1 34.8 34.5 Dividends paid (2,572) (4,105) (5,337) (6,158) (6,979) Other expenses 16,373 12,118 13,717 15,767 17,751 Net cash from operations 9,716 13,171 1,197 11,602 11,530 % of sales 21.1 15.2 14.5 14.5 14.5 Capital expenditure 147 380 1,600 2,000 2,400 EBITDA 10,623 16,428 19,491 22,057 24,447 Net cash after capex 9,569 12,791 (403) 9,602 9,130 % of sales 13.7 20.6 20.6 20.3 20.0 Depreciation & Amortisation 2,754 2,596 2,913 3,104 3,349 Inc./(dec.) in debt 1,619 (1,792) - - - EBIT 7,869 13,832 16,577 18,953 21,098 (Inc.)/dec. in investments (745) (11,227) (4,000) (4,000) (4,000) % of sales 10.1 17.4 17.5 17.4 17.2 Equity issue/(buyback) 4 1 - - - Interest expenses 529 504 474 532 595 Cash from financial activities 878 (13,018) (4,000) (4,000) (4,000) Other income (net) 948 1,656 1,366 1,683 2,118 Others (7,139) 1,954 (161) (720) (720) PBT 8,288 14,984 17,470 20,105 22,621 Opening cash 2,562 5,870 7,597 3,033 7,915 -PBT margin (%) 10.7 18.8 18.5 18.5 18.5 Closing cash 5,870 7,597 3,033 7,915 12,325 Provision for tax 1,979 3,879 4,455 5,127 5,768 Change in cash 3,308 1,727 (4,564) 4,882 4,410 Effective tax rate (%) 23.9 25.9 25.5 25.5 25.5 Net profit 6,309 11,105 13,015 14,978 16,853 Source: Company, Nirmal Bang Institutional Equities Research -Growth (%) -16.3 76.0 17.2 15.1 12.5 -Net profit margin (%) 8.1 13.9 13.8 13.8 13.8 Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 119: Balance sheet Exhibit 120: Key ratios Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Y/E March FY20 FY21 FY22E FY23E FY24E Equity capital 1,646 1,647 1,647 1,647 1,647 Per Share (Rs) Reserves & surplus 29,926 41,547 49,226 58,046 67,920 EPS 38.4 67.6 79.3 91.2 102.6 Net worth 31,572 43,194 50,873 59,693 69,567 FDEPS 38.3 67.4 79.0 90.9 102.3 Other liabilities 54 6 6 6 6 Dividend Per Share 13.0 25.0 32.5 37.5 42.5 Total loans 1,744 - - - - Book Value 192 262 309 362 422 Lease Liabilties 4,964 4,492 4,492 4,492 4,492 Dividend Payout Ratio (incl DDT) 41 37 41 41 41 Total liabilities 38,334 47,692 55,371 64,191 74,065 Return ratios (%) Net block 4,295 3,477 3,550 3,166 2,937 RoE 19.5 29.7 27.7 27.1 26.1 Goodwill 4,732 4,732 4,732 4,732 4,732 Pre Tax RoCE 23.8 35.1 35.1 34.1 32.7 Investments 7,748 21,693 24,468 28,468 32,468 Pre Tax ROIC 33.2 62.4 69.8 68.1 73.9 Deferred tax asset - net 1,835 351 351 351 351 Tunover Ratios Asset Turnover Ratio 1.5 1.3 1.4 1.4 1.3 Other non-current assets 2,150 2,141 2,141 2,141 2,141 Debtor Days (incl. unbilled Rev) 82 75 82 81 81 Unbilled revenue 3,148 3,553 3,863 4,374 4,925 Working Capital Cycle Days 38 22 29 42 40 Other current assets 2,198 2,555 3,019 3,418 3,849 Valuation ratios (x) Debtors 14,389 12,742 17,447 19,752 22,241 PER 67.4 38.3 32.7 28.4 25.2 Cash & bank balance 5,870 7,597 3,033 7,915 12,325 P/BV 13.5 9.8 8.4 7.1 6.1 Right-of-use Assets 5,201 4,773 4,773 4,773 4,773 EV/EBITDA 39.0 24.3 20.5 17.7 15.6 Total current assets 30,806 31,220 32,135 40,232 48,112 EV/Sales 5.3 5.0 4.2 3.6 3.1 Total current liabilities 13,232 15,922 12,006 14,899 16,676 M-cap/Sales 5.5 5.3 4.5 3.9 3.5 Net current assets 17,574 15,298 20,129 25,333 31,436 Dividend Yield (%) 0.5 1.0 1.3 1.5 1.6 Total assets 38,334 47,692 55,371 64,191 74,065 Source: Company, Nirmal Bang Institutional Equities Research Source: Company, Nirmal Bang Institutional Equities Research

59 Information Technology Sector

Institutional Equities

Financials –Persistent Systems Exhibit 121: Income statement Exhibit 122: Cash flow Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Average INR/USD 71.1 74.0 74.6 76.5 77.0 EBIT 3,270 5,075 7,683 10,043 12,588 Net Sales (USD mn) 502 566 725 880 1,021 (Inc.)/dec. in working capital 741 1,219 (5,863) (1,697) (1,663) YoY Growth (%) 4.3 12.9 28.0 21.4 16.0 Cash flow from operations 4,011 6,294 1,820 8,346 10,925 Net Sales 35,658 41,879 54,168 67,329 78,621 Other income 1,254 1,020 1,090 1,180 1,408 YoY Growth (%) 5.9 17.4 29.3 24.3 16.8 Depreciation & amortisation 1,660 1,756 1,828 2,086 2,384 Cost of Sales & Services 23,494 27,650 36,075 45,416 52,448 Tax paid (1,121) (1,588) (2,193) (2,806) (3,499) % of sales 65.9 66.0 66.6 67.5 66.7 Dividends paid (920) (1,534) (2,303) (2,946) (3,674) Gross Margin 12,164 14,229 18,094 21,913 26,173 Net cash from operations 4,883 5,947 242 5,860 7,544 % of sales 34.1 34.0 33.4 32.5 33.3 Capital expenditure 1,380 1,545 2,400 2,800 3,200 SG& A 7,234 7,398 8,582 9,784 11,201 Net cash after capex 3,503 4,402 (2,158) 3,060 4,344 % of sales 20.3 17.7 15.8 14.5 14.2 Inc./(dec.) in debt 34 (2) - - - EBITDA 4,930 6,830 9,512 12,129 14,972 (Inc.)/dec. in investments (2,687) (7) (4,000) (4,000) (4,000) % of sales 13.8 16.3 17.6 18.0 19.0 Equity issue/(buyback) (1,679) - - - - Depreciation 1,660 1,756 1,828 2,086 2,384 Cash from financial activities (4,332) (9) (4,000) (4,000) (4,000) EBIT 3,270 5,075 7,683 10,043 12,588 Others (1,322) 844 - - - % of sales 9.2% 12.1% 14.2% 14.9% 16.0% Opening cash 6,724 4,572 9,809 3,651 2,712 Other income (net) 1,254 1,020 1,090 1,180 1,408 Closing cash 4,573 9,809 3,651 2,712 3,055 PBT 4,524 6,094 8,774 11,223 13,996 Change in cash (2,151) 5,237 (6,158) (940) 344 -PBT margin (%) 12.7 14.6 16.2 16.7 17.8 Source: Company, Nirmal Bang Institutional Equities Research Provision for tax 1,121 1,588 2,193 2,806 3,499 Effective tax rate (%) 24.8 26.1 25.0 25.0 25.0 Net profit 3,403 4,507 6,580 8,417 10,497

-Growth (%) -3.2 32.4 46.0 27.9 24.7 Exhibit 124: Key ratios -Net profit margin (%) 9.5 10.8 12.1 12.5 13.4 Y/E March FY20 FY21 FY22E FY23E FY24E Source: Company, Nirmal Bang Institutional Equities Research Per Share (Rs) EPS 44.4 58.8 85.8 109.7 136.9 Exhibit 123: Balance sheet FDEPS 44.4 58.8 85.8 109.7 136.9 Y/E March (Rsmn) FY20 FY21 FY22E FY23E FY24E Dividend Per Share 12.0 20.0 30.0 38.4 47.9 Equity capital 764 764 764 764 764 Book Value 311 364 420 492 581 Reserves & surplus 23,093 27,192 31,470 36,941 43,764 Dividend Payout Ratio (%) (inl DDT) 27 34 35 35 35 Net worth 23,858 27,957 32,234 37,705 44,528 Return ratios (%) Deferred tax liability - - - - - RoE 14.4 17.4 21.9 24.1 25.5 Other liabilities 544 957 957 957 957 Pre-Tax RoCE 13.8 19.6 25.5 28.7 30.6 Total loans 46 44 44 44 44 Pre Tax ROIC 35.1 57.2 67.3 63.4 68.9 Total liabilities 24,448 28,958 33,235 38,706 45,529 Tunover Ratios Goodwill 89 86 86 86 86 Asset Turnover Ratio 1.5 1.5 1.7 1.8 1.8 Net block (incl CWIP) 4,530 4,605 5,177 5,891 6,707 Debtor Days (incl. unbilled Rev) 61 50 65 62 62 Investments 9,786 9,996 13,996 17,996 21,996 Working Capital Cycle Days 39 25 35 49 49 Deferred tax asset 960 1,038 1,038 1,038 1,038 Valuation ratios (x) Other non-current assets 690 467 467 467 467 PER 66.0 49.9 34.2 26.7 21.4 Other current assets 4,373 4,945 7,041 8,396 9,723 P/BV 9.4 8.0 7.0 6.0 5.0 Debtors 5,922 5,709 9,635 11,489 13,306 EV/EBTDA 44.7 31.5 23.2 18.3 14.8 Cash & bank balance 4,572 9,809 3,651 2,712 3,055 EV/Sales 6.2 5.1 4.1 3.3 2.8 Total current assets 14,867 20,463 20,327 22,597 26,084 M-cap/Sales 6.3 5.4 4.1 3.3 2.9 Total current liabilities 6,474 7,697 7,856 9,368 10,849 Dividend Yield 0.4% 0.7% 1.0% 1.3% 1.6% Net current assets 8,393 12,766 12,471 13,229 15,235 Source: Company, Nirmal Bang Institutional Equities Research Total assets 24,448 28,958 33,235 38,706 45,529 Source: Company, Nirmal Bang Institutional Equities Research

60 Information Technology Sector

Institutional Equities

Rating track – TCS Date Rating Market price (Rs) Target price (Rs) 13 April 2015 Sell 2,619 2,314 17 April 2015 Sell 2,574 2,325 10 July 2015 Sell 2,529 2,173 9 September 2015 Sell 2,540 2,173 5 October 2015 Sell 2,641 2,217 14 October 2015 Sell 2,599 2,248 8 January 2016 Under Review 2,398 - 13 January 2016 Under Review 2,327 - 14 March 2016 Sell 2,360 2,055 20 April 2016 Sell 2,520 2,089 15 July 2016 Sell 2,521 2,075 14 September 2016 Sell 2,359 2,041 14 October 2016 Sell 2,329 2,073 10 January 2017 Sell 2,304 1,952 13 January 2017 Sell 2,344 1,956 14 February 2017 Sell 2,414 1,983 21 February 2017 Sell 2,502 1,983 2 March 2017 Sell 2,477 1,983 19 April 2017 Sell 2,309 1,996 21 June 2017 Sell 2,443 1,923 14 July 2017 Sell 2,446 1,930 28 September 2017 Sell 2,475 1,908 13 October 2017 Sell 2,548 1,913 26 December 2017 Under Review 2,647 - 12 January 2018 Under Review 2,792 - 17 March 2018 Accumulate 2,829 3,155 20 April 2018 Accumulate 3,191 3,176 26 June 2018* Accumulate 1,818 1,812 11 July 2018 Accumulate 1,876 1,862 05 October 2018 Accumulate 2,063 2,145 12 October 2018 Accumulate 1,980 2,120 27 December 2018 Sell 1,892 1,712 7 January 2019 Sell 1,877 1,533 11 January 2019 Sell 1,883 1,545 18 March 2019 Sell 2,040 1,607 19 March 2019 Sell 2,023 1,607 15 April 2019 Sell 2,015 1,614 10 July 2019 Sell 2,120 1,601 23 September 2019 Sell 2,020 1,615 10 October 2019 Sell 2,004 1,593 2 January 2020 Under Review 2,170 - 20 January 2020 Under Review 2,220 - 30 March 2020 Sell 1,850 1,393 17 April 2020 Sell 1,716 1,393 9 July 2020 Under Review 2,218 - 10 July 2020 Under Review 2,204 - 6 September 2020 Accumulate 2,289 2,381 28 September 2020 Accumulate 2,422 2,537 8 October 2020 Accumulate 2,736 2,809 29 December 2020 Accumulate 2,929 3,001 10 January 2021 Accumulate 3,121 3,157 13 April 2021 Accumulate 3,247 3,165 5 July 2021 Accumulate 3,325 3,663 * Post 1:1 Bonus

61 Information Technology Sector

Institutional Equities

Rating track - Infosys Date Rating Market price (Rs) Target price (Rs) 13 April 2015 Accumulate 2,229 2,147 27 April 2015 Sell 1,995 1,823 4 June 2015 Sell 2,032 1,823 22 July 2015** Accumulate 1,116 1,189 7 September 2015 Accumulate 1,074 1,189 14 September 2015 Accumulate 1,091 1,189 13 October 2015 Accumulate 1,122 1,194 8 January 2016 Under Review 1,063 - 14 January 2016 Under Review 1,133 - 14 March 2016 Sell 1,141 1,002 15 April 2016 Sell 1,173 1,010 9 June 2016 Sell 1,238 1,010 18 July 2016 Sell 1,072 988 29 August 2016 Sell 1,020 970 17 October 2016 Sell 1,027 964 10 January 2017 Sell 970 920 16 January 2017 Sell 975 910 14 February 2017 Sell 985 926 15 April 2017 Sell 931 887 15 May 2017 Sell 964 887 21 June 2017 Sell 944 844 17 July 2017 Sell 972 846 21 August 2017 Sell 923 794 28 August 2017 Sell 912 836 11 September 2017 Sell 884 836 28 September 2017 Sell 906 833 25 October 2017 Sell 924 873 26 December 2017 Under Review 1,039 - 15 January 2018 Under Review 1,079 - 17 March 2018 Accumulate 1,170 1,154 14 April 2018 Accumulate 1,171 1,157 24 April 2018 Accumulate 1,188 1,157 4 July 2018 Accumulate 1,307 1,314 14 July 2018 Accumulate 1,317 1,328 5 October 2018** Accumulate 711 752 17 October 2018 Accumulate 695 756 27 December 2018 Accumulate 644 688 7 January 2019 Sell 661 620 14 January 2019 Sell 684 603 19 March 2019 Sell 710 620 15 April 2019 Sell 748 601 27 June 2019 Sell 739 601 15 July 2019 Sell 727 596 23 September 2019 Sell 765 607 14 October 2019 Sell 815 625 22 October 2019 Sell 768 625 8 November 2019 Sell 708 625 2 January 2020 Under Review 737 - 13 January 2020 Under Review 740 - 31 March 2020 Sell 654 550 21 April 2020 Sell 653 543 9 July 2020 Under Review 775 - 16 July 2020 Under Review 834 - 6 September 2020 Accumulate 919 1,027 28 September 2020 Accumulate 1,011 1,096 15 October 2020 Accumulate 1,137 1,218 12 November 2020 Accumulate 1,123 1,218 29 December 2020 Accumulate 1,240 1,325 14 January 2021 Accumulate 1,387 1,446 15 April 2021 Accumulate 1,397 1,411 5 July 2021 Accumulate 1,568 1,667 * * Post 1:1 Bonus

62 Information Technology Sector

Institutional Equities

Rating track – HCL Technologies Date Rating Market price (Rs) Target price (Rs) 13 April 2015 Accumulate 959 1,013 22 April 2015 Accumulate 895 1,014 4 August 2015 Accumulate 938 1,008 1 October 2015 Accumulate 982 991 5 October 2015 Accumulate 859 991 20 October 2015 Buy 859 989 8 January 2016 Under Review 828 - 20 January 2016 Under Review 841 - 14 March 2016 Sell 824 737 29 April 2016 Sell 799 719 4 August 2016 Sell 826 745 24 October 2016 Sell 832 718 10 January 2017 Sell 838 712 25 January 2017 Sell 849 718 14 February 2017 Sell 827 740 12 May 2017 Sell 839 743 21 June 2017 Sell 854 713 28 July 2017 Sell 899 764 28 September 2017 Sell 874 744 26October 2017 Sell 903 763 26 December 2017 Under Review 887 - 22 January 2018 Under Review 958 - 17 March 2018 Accumulate 968 1,048 16 April 2018 Accumulate 991 1,048 3 May 2018 Accumulate 1,001 1,041 4 July 2018 Buy 926 1,131 30 July 2018 Buy 963 1,172 5 October 2018 Buy 1,081 1,281 24 October 2018 Buy 952 1,277 11 December 2018 Buy 942 1,329 27 December 2018 Accumulate 942 1,072 7 January 2019 Accumulate 932 958 30 January 2019 Accumulate 988 1,054 19 March 2019 Accumulate 1,012 1,076 10 May 2019 Accumulate 1,139 1,090 13 August 2019 Accumulate 1,083 1,127 23 August 2019 Accumulate 1,026 1,150 24 October 2019 Accumulate 1,102 1,153 13 November 2020 Accumulate 1,146 1,153 2 January 2020* Under Review 572 - 20 January 2020 Under Review 601 - 31 March 2020 Accumulate 433 483 8 May 2020 Accumulate 512 535 9 July 2020 Under Review 588 - 20 July 2020 Under Review 628 - 6 September 2020 Buy 701 881 28 September 2020 Buy 828 958 18 October 2020 Buy 827 1,053 29 December 2020 Buy 922 1,141 16 January 2021 Buy 990 1,163 25 April 2021 Buy 956 1,150 5 July 2021 Buy 985 1,320 * Post 1:1 Bonus issue

63 Information Technology Sector

Institutional Equities

Rating track – Wipro Date Rating Market price (Rs) Target price (Rs) 13 April 2015 Sell 618 576 22 April 2015 Sell 588 546 24 July 2015 Sell 588 548 30 September 2015 Sell 587 546 23 October 2015 Sell 578 544 8 January 2016 Under Review 556 - 19 January 2016 Under Review 549 - 14 March 2016 Sell 540 498 21 April 2016 Sell 601 489 20 July 2016 Sell 549 478 24 October 2016 Sell 499 436 10 January 2017 Sell 472 410 27 January 2017 Sell 474 413 14 February 2017 Sell 474 427 26 April 2017 Sell 495 437 21 June 2017* Sell 254 197 21 July 2017 Sell 269 235 28 September 2017 Sell 290 228 18 October 2017 Sell 290 244 26 December 2017 Under Review 302 - 22 January 2018 Under Review 329 - 17 March 2018 Accumulate 296 302 26 April 2018 Accumulate 287 303 4 July 2018 Buy 262 335 24 July 2018 Buy 282 323 5 October 2018 Buy 325 377 17 October 2018 Buy 309 364 27 December 2018 Sell 326 297 7 January 2019 Sell 324 268 21 January 2019 Sell 347 277 19 March 2019** Sell 258 209 18 April 2019 Sell 282 219 18 July 2019 Sell 260 212 23 September 2019 Sell 239 222 15 October 2019 Sell 244 221 2 January 2020 Under review 248 - 15 January 2020 Under review 256 - 31 March 2020 Accumulate 186 186 16 April 2020 Accumulate 186 178 9 July 2020 Under Review 222 - 15 July 2020 Under Review 225 - 6 September 2020 Buy 276 326 28 September 2020 Accumulate 314 346 14 October 2020 Accumulate 376 382 19 November 2020 Accumulate 345 382 29 December 2020 Accumulate 383 411 14 January 2021 Accumulate 459 480 5 March 2021 Accumulate 439 461 16 April 2021 Accumulate 431 465 5 July 2021 Accumulate 539 563 *Post 1:1 bonus share issue, **Post 1:3 bonus share issue

64 Information Technology Sector

Institutional Equities

Rating track – Tech Mahindra Date Rating Market price (Rs) Target price (Rs) 13 April 2015 Sell 660 593 28 May 2015 Sell 549 511 19 June 2015 Sell 541 470 28 July 2015 Sell 520 470 28 September 2015 Sell 567 474 4 November 2015 Sell 557 472 15 December 2015 Sell 543 471 8 January 2016 Under Review 522 - 2 February 2016 Under Review 497 - 14 March 2016 Sell 459 395 25 May 2016 Sell 480 409 21 June 2016 Sell 544 421 3 August 2016 Sell 499 400 28 October 2016 Sell 414 385 10 January 2017 Sell 473 368 31 January 2017 Sell 472 383 14 February 2017 Sell 500 388 7 March 2017 Sell 501 408 29 May 2017 Sell 429 403 21 June 2017 Sell 395 367 1 August 2017 Sell 385 360 28 September 2017 Sell 447 358 2 November 2017 Sell 478 387 11 December 2017 Sell 496 426 26 December 2017 Under Review 493 - 30 January 2018 Under Review 605 - 17 March 2018 Accumulate 635 608 28 May 2018 Accumulate 703 721 4 July 2018 Accumulate 655 716 31 July 2018 Accumulate 658 718 5 October 2018 Buy 696 845 31 October 2018 Accumulate 685 731 27 November 2018 Accumulate 695 731 27 December 2018 Sell 695 590 7 January 2019 Sell 681 525 6 February 2019 Sell 751 561 19 March 2019 Sell 789 587 6 June 2019 Sell 750 562 31 July 2019 Sell 641 535 9 September 2019 Sell 684 544 23 September 2019 Sell 688 563 5 November 2019 Sell 775 575 19 December 2019 Sell 787 614 2 January 2020 Under Review 762 - 3 February 2020 Under Review 807 - 31 March 2020 Accumulate 501 540 4 May 2020 Sell 546 476 9 July 2020 Under Review 577 - 28 July 2020 Under Review 665 - 6 September 2020 Accumulate 748 819 28 September 2020 Accumulate 772 868 26 October 2020 Buy 852 1,017 22 December 2020 Accumulate 907 1,017 29 December 2020 Buy 947 1,150 30 January 2021 Buy 961 1,198 27 April 2021 Buy 962 1,211 5 July 2021 Buy 1,089 1,441

65 Information Technology Sector

Institutional Equities

Rating track - Mindtree Date Rating Market price (Rs) Target price (Rs) 7June 2017 Sell 547 424 21June 2017 Sell 519 382 20 July 2017 Sell 506 382 22 August 2017 Sell 461 382 28 September 2017 Sell 471 396 26 October 2017 Sell 507 426 26 December 2017 Under Review 600 - 18 January 2018 Under Review 622 - 17 March 2018 Sell 812 574 26 October 2017 Sell 867 - 26 December 2017 Under Review 600 - 18 January 2018 Under Review 622 - 17 March 2018 Sell 812 574 19 April 2018 Sell 867 577 4 July 2018 Sell 986 716 19 July 2018 Sell 1,062 803 4 September 2018 Sell 1,100 803 5 October 2018 Sell 1,063 986 19 October 2018 Sell 978 778 27 December 2018 Sell 855 631 7 January 2019 Sell 815 552 17 January 2019 Sell 835 553 19 March 2019 Sell 963 554 20 March 2019 Sell 943 554 18 April 2019 Sell 972 563 18 July 2019 Sell 751 531 23 September 2019 Sell 711 567 17 October 2019 Sell 744 532 2 January 2020 Under Review 812 - 15 January 2020 Under Review 863 - 31 March 2020 Sell 830 522 27 April 2020 Sell 780 532 9 July 2020 Under Review 988 - 15 July 2020 Under Review 973 - 6 September 2020 Accumulate 1,194 1,222 28 September 2020 Accumulate 1,269 1,310 16 October 2020 Accumulate 1,425 1,544 4 December 2020 Accumulate 1,442 1,544 29 December 2020 Accumulate 1,609 1,646 19 January 2021 Accumulate 1,664 1,788 19 April 2021 Sell 2,070 1,893 5 July 2021 Sell 2,583 2,226

66 Information Technology Sector

Institutional Equities

Rating track– Persistent Systems Date Rating Market price (Rs) Target price (Rs) 21 September 2015 Sell 685 562 27 October 2015 Sell 669 553 7 December 2015 Sell 663 544 8 January 2016 Under Review 630 - 27 January 2016 Under Review 609 - 14 March 2016 Sell 599 522 22 March 2016 Sell 741 555 26 April 2016 Sell 719 558 22 June 2016 Sell 697 558 26 July 2016 Sell 665 562 26 October 2016 Sell 660 573 19 December 2016 Sell 613 573 10 January 2017 Sell 636 557 24 January 2017 Sell 612 548 14 February 2017 Sell 624 574 27 April 2017 Sell 568 534 21 June 2017 Sell 681 516 24 July 2017 Sell 659 526 28 September 2017 Sell 651 540 17 October 2017 Sell 663 566 4 December 2017 Sell 654 566 26 December 2017 Under Review 650 - 30 January 2018 Under Review 788 - 17 March 2018 Sell 816 698 25 April 2018 Accumulate 726 717 4 July 2018 Accumulate 811 847 31 July 2018 Accumulate 828 867 5 October 2018 Buy 718 909 23 October 2018 Accumulate 560 622 12 December 2018 Accumulate 611 622 27 December 2018 Sell 630 504 7 January 2019 Sell 577 455 29 January 2019 Sell 567 481 19 March 2019 Sell 658 489 2 May 2019 Sell 642 558 14 June 2019 Accumulate 622 604 29 July 2019 Accumulate 561 602 23 September 2019 Sell 610 525 8 November 2019 Sell 612 554 2 January 2020 Under Review 706 - 31 January 2020 Under Review 689 - 31 March 2020 Sell 544 502 7 May 2020 Accumulate 505 522 9 July 2020 Under Review 743 - 28 July 2020 Under Review 856 - 6 September 2020 Accumulate 986 1,081 28 September 2020 Accumulate 1,220 1,178 1 October 2020 Under Review 1,341 - 27 October 2020 Buy 1,184 1, 377 22 December 2020 Accumulate 1,310 1, 377 29 December 2020 Buy 1,690 1,577 31 January 2021 Buy 1,524 1,957 3 May 2021 Accumulate 2,038 2,088 5 July 2021 Accumulate 2,930 2,854

67 Information Technology Sector

Institutional Equities

DISCLOSURES

This Report is published by Nirmal Bang Equities Private Limited (hereinafter referred to as “NBEPL”) for private circulation. NBEPL is a registered Research Analyst under SEBI (Research Analyst) Regulations, 2014 having Registration no. INH000001436. NBEPL is also a registered Stock Broker with National Stock Exchange of India Limited and BSE Limited in cash and derivatives segments.

NBEPL has other business divisions with independent research teams separated by Chinese walls, and therefore may, at times, have different or contrary views on stocks and markets.

NBEPL or its associates have not been debarred / suspended by SEBI or any other regulatory authority for accessing / dealing in securities Market. NBEPL, its associates or analyst or his relatives do not hold any financial interest in the subject company. NBEPL or its associates or Analyst do not have any conflict or material conflict of interest at the time of publication of the research report with the subject company. NBEPL or its associates or Analyst or his relatives do not hold beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of this research report.

NBEPL or its associates / analyst has not received any compensation / managed or co-managed public offering of securities of the company covered by Analyst during the past twelve months. NBEPL or its associates have not received any compensation or other benefits from the company covered by Analyst or third party in connection with the research report. Analyst has not served as an officer, director or employee of Subject Company and NBEPL / analyst has not been engaged in market making activity of the subject company.

Analyst Certification: I, Mr. Girish Pai, research analyst, is the author of this report, hereby certifies that the views expressed in this research report accurately reflects my personal views about the subject securities, issuers, products, sectors or industries. It is also certified that no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst(s) principally responsible for the preparation of this research report and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations.

68 Information Technology Sector

Institutional Equities

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69 Information Technology Sector