MINDTREE LIMITED June 7, 2018

SECTOR: IT

RECOMMENDATION: BUY @ 1015, Target @ 1200

MINDTREE LIMITED SHARE PRICE PERFORMANCE

Exchange Symbol MINDTREE

Current Price (Rs) 1016

Face Value (Rs) 10

52 Week High (Rs) 1015

52 Week Low (Rs) 439

Life Time High (Rs) 1099

Life Time Low(Rs) 45

Average Volume 1712.59k

P/E Ratio 25.82

Book Value 164.13 Mar’17

Market Cap 16692.40cr

% Of Promoter Holding Pledged 0 %

COMPANY OVERVIEW

Technology solutions to help businesses and societies flourish

Mindtree delivers digital transformation and technology services from ideation to

execution, enabling Global 2000 clients to outperform the competition. “Born digital,”

Mindtree takes an agile, collaborative approach to creating customized solutions across

the digital value chain. Our deep expertise in infrastructure and applications management

turns IT into a strategic asset. Whether you need to run your business more efficiently or

accelerate revenue growth, Mindtree can get you there.

In organizations, the lack of cross-enterprise IT visibility results in teams investing in

different tools that offer the same capability, leading to increased costs. Integrated

Services is powered by Mindtree CAPE (Compassable Automated Platform for

Enterprises), an automated meta-platform, that supports the entire IT lifecycle and offers

modular solutions tailored for our client needs, leveraging their existing tools and other

assets. Mindtree CAPE is a meta-platform with capabilities including compose,

provision, operate and visualize that help enable integrated service delivery across the

plan-to-operate lifecycle to effectively address the challenge of toolchain integration.

Digital transformation with a cloud-first approach

Mindtree delivers a holistic approach to cloud transformation that accelerates a

company’s move to digital business. From cloud advisory to cloud build, from cloud

migration to cloud management, we can be your anchor partner.

Turn big data into intelligence and actionable insights

Big data unlocks hidden opportunities and insights. Mindtree turn technology into

business outcomes by delivering information management, business intelligence and

analytic solutions under one umbrella.

Win customers and outpace competitors with the power of digital

Big data. Digital business solutions. Social media. Mobile platforms. Each presents unique

opportunities for customer insight and new sources of revenue. Mindtree’s digital business strategy

services helps you transform your business by leveraging digital technologies. We guide you

through the maze of device proliferation and show you how to leverage data for a more efficient

workforce, faster time-to-market and richer customer experience. With the help of our digital

strategy framework, organizations can make sense of digital disruption and outpace competition.

PRODUCTS OF MINDTREE LIMITED

Intelligent Video Surveillance At Mindtree, experts work with organizations around the world to deliver cost-

effective, intelligent digital video surveillance solutions. They offer ready-to-brand

recording and analytics solutions that are integrated, highly scalable, distributed

and standards-based. OEMs, system integrators and distributors can improve

existing solution portfolios and take Mindtree’s solution to market under their own

brand. Their digital video surveillance offerings can be licensed independently or

as a complete solution, giving you the flexibility to improve your security

surveillance solution to fit your requirements.

Their Digital Video Surveillance solution enables intelligent, cost-effective

protection through:

Gladius Video Management Software provides comprehensive, enterprise grade,

open platform video management for IP surveillance installations. Gladius Central offers central management, monitoring and recording (optional)

for all cameras in your distributed surveillance installations. Gladius Cloud provides cloud based recording and management of distributed

sites without a need to change the existing cameras and DVRs. Gladius Video Analytics Software includes a collection of patent pending video

based analytics algorithms to help analyze security scenarios and generate alerts.

Connected Buildings Energy efficiency and sustainability are talking points for companies and people

alike. However, building management is unable to address these issues due to

existence of legacy, disparate and proprietary building systems. Typical efforts to

optimize building operations only result in disruption of service, increased capital

expenditure and occupant discomfort.

Internet of Things (IoT) provides a way out of this tricky situation. With IoT based

open platforms, the building systems can be centralized, automated and optimized

to levels inconceivable in existing systems. IoT platforms enable:

Bringing together of all disparate systems within a building and across buildings

on to one common platform

Leveraging insights from real-time data (gathered from internal and external

sources) to intelligently control the systems

STOCK PRICE AND COMPANY

FIANANCIALS

The above chart shows Mindtree’s 5 year weekly movement and the all time

high that it has made recently.

CONSOLIDATED QUATERLY INCOME STATEMENT

Consolidated Quarterly Results ------------------- in Rs. Cr. -------------------

Mar '18 Dec '17 Sep '17 Jun '17 Mar '17

Net Sales/Income from operations 1,464.00 1,377.70 1,331.60 1,289.50 1,318.10

Other Operating Income -- -- -- -- --

Total Income From Operations 1,464.00 1,377.70 1,331.60 1,289.50 1,318.10

EXPENDITURE

Consumption of Raw Materials -- -- -- -- --

Purchase of Traded Goods -- -- -- -- --

Increase/Decrease in Stocks -- -- -- -- --

Power & Fuel -- -- -- -- --

Employees Cost 930.10 894.60 900.10 839.30 870.00

Depreciation 38.30 41.90 45.40 45.90 46.80

Excise Duty -- -- -- -- --

Admin. And Selling Expenses -- -- -- -- --

R & D Expenses -- -- -- -- --

Provisions And Contingencies -- -- -- -- --

Exp. Capitalised -- -- -- -- --

Other Expenses 298.40 275.70 277.40 306.70 261.20

P/L Before Other Inc., Int., Excpt. Items & Tax

197.20 165.50 108.70 97.60 140.10

Other Income 59.10 5.90 59.80 65.40 -9.50

P/L Before Int., Excpt. Items & Tax 256.30 171.40 168.50 163.00 130.60

Interest 5.80 4.60 2.50 4.00 4.70

P/L Before Exceptional Items & Tax 250.50 166.80 166.00 159.00 125.90

Exceptional Items -- -- -- -- --

P/L Before Tax 250.50 166.80 166.00 159.00 125.90

Tax 68.30 25.30 41.30 37.30 28.70

P/L After Tax from Ordinary Activities 182.20 141.50 124.70 121.70 97.20

Prior Year Adjustments -- -- -- -- --

Extra Ordinary Items -- -- -- -- --

Net Profit/(Loss) For the Period 182.20 141.50 124.70 121.70 97.20

Minority Interest -- -- -- -- --

Share Of P/L Of Associates -- -- -- -- --

Net P/L After M.I & Associates 182.20 141.50 124.70 121.70 97.20

Equity Share Capital 163.90 163.90 163.90 168.10 168.00

Reserves Excluding Revaluation Reserves

2,577.50 2,424.10 2,356.90 2,547.50 2,409.10

Equity Dividend Rate (%) -- -- -- -- --

EPS Before Extra Ordinary

Basic EPS 11.12 8.63 7.46 7.24 5.78

Diluted EPS 11.08 8.61 7.44 7.23 5.77

EPS After Extra Ordinary

Basic EPS 11.12 8.63 7.46 7.24 5.78

Diluted EPS 11.08 8.61 7.44 7.23 5.77

Public Share Holding

No Of Shares (Crores) -- -- -- -- --

Share Holding (%) -- -- -- -- --

Promoters and Promoter Group Shareholding

a) Pledged/Encumbered

- Number of shares (Crores) -- -- -- -- --

- Per. of shares (as a % of the total sh. of prom. and promoter group)

-- -- -- -- --

- Per. of shares (as a % of the total Share Cap. of the company)

-- -- -- -- --

b) Non-encumbered

- Number of shares (Crores) -- -- -- -- --

- Per. of shares (as a % of the total sh. of prom. and promoter group)

-- -- -- -- --

- Per. of shares (as a % of the total Share Cap. of the company)

-- -- -- -- --

This is an extract from Nov ’17 , Mindtree trading at Rs.605. Today at 1016, it

has gone beyond target and is expected to rise more.

CONSOLIDATED BALANCE SHEET

Consolidated Balance Sheet ------------------- in Rs. Cr. -------------------

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 168.00 167.80 83.70 41.70 41.50

Total Share Capital 168.00 167.80 83.70 41.70 41.50

Reserves and Surplus 2,409.10 2,227.80 1,928.70 1,598.80 1,272.20

Total Reserves and Surplus 2,409.10 2,227.80 1,928.70 1,598.80 1,272.20

Total Shareholders Funds 2,577.10 2,395.60 2,012.40 1,640.50 1,313.70

Equity Share Application Money 0.00 0.00 0.40 0.00 0.00

NON-CURRENT LIABILITIES

Long Term Borrowings 1.30 1.80 2.30 2.70 3.20

Other Long Term Liabilities 30.10 107.20 33.40 12.90 5.70

Long Term Provisions 0.00 0.00 0.00 3.90 0.00

Total Non-Current Liabilities 31.40 109.00 35.70 19.50 8.90

CURRENT LIABILITIES

Short Term Borrowings 97.80 41.50 0.00 0.00 21.70

Trade Payables 165.10 167.90 53.60 8.20 18.90

Other Current Liabilities 408.70 405.10 346.50 273.80 216.60

Short Term Provisions 110.50 221.10 206.30 157.40 111.20

Total Current Liabilities 782.10 835.60 606.40 439.40 368.40

Total Capital And Liabilities 3,390.60 3,340.20 2,654.90 2,099.40 1,691.00

ASSETS

NON-CURRENT ASSETS

Tangible Assets 380.90 436.70 451.30 326.60 256.10

Intangible Assets 194.10 25.80 12.00 17.00 2.80

Capital Work-In-Progress 19.20 23.20 35.40 49.60 57.10

Fixed Assets 594.20 485.70 498.70 393.20 316.00

Non-Current Investments 5.80 5.80 0.80 17.50 23.00

Deferred Tax Assets [Net] 62.40 60.20 44.90 40.20 36.00

Long Term Loans And Advances 66.70 185.50 65.40 75.80 61.70

Other Non-Current Assets 153.50 27.60 100.30 103.90 104.60

Total Non-Current Assets 1,329.60 1,525.40 802.30 630.60 541.30

CURRENT ASSETS

Current Investments 586.90 210.10 534.30 516.00 402.70

Trade Receivables 896.20 972.80 696.30 600.40 450.80

Cash And Cash Equivalents 250.80 233.20 376.30 118.40 125.20

Short Term Loans And Advances 1.20 157.00 83.60 61.30 43.00

OtherCurrentAssets 325.90 241.70 162.10 172.70 128.00

Total Current Assets 2,061.00 1,814.80 1,852.60 1,468.80 1,149.70

Total Assets 3,390.60 3,340.20 2,654.90 2,099.40 1,691.00

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 223.90 119.10 142.20 734.40 510.80

BONUS DETAILS

Bonus Equity Share Capital 151.06 151.06 67.16 25.36 25.36

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value

5.00 5.00 0.00 17.00 22.40

Non-Current Investments Unquoted Book Value

0.80 0.90 0.90 0.80 0.80

CURRENT INVESTMENTS

Current Investments Quoted Market Value

525.90 201.60 479.00 491.20 371.00

Current Investments Unquoted Book 61.00 25.00 70.00 40.00 40.00

CONSOLIDATED RATIOS

Mar ‘17 Mar‘16 Mar ‘15 Mar ‘14 Mar ‘13

Investment Valuation Ratios : Face Value

10.00 10.00 10.00 10.00 10.00

Dividend Per Share -- -- -- -- --

Operating Profit Per Share (Rs) 41.93 49.49 84.70 146.32 108.92

Net Operating Profit Per Share (Rs) 311.64 279.50 425.39 727.18 568.63

Free Reserves Per Share (Rs) -- -- -- -- --

Bonus in Equity Capital 89.91 90.02 80.23 60.80 61.09

Profitability Ratios

Operating Profit Margin(%) 13.45 17.70 19.91 20.12 19.15

Profit Before Interest And Tax Margin(%) 9.80 14.61 16.66 17.17 16.27

Gross Profit Margin(%) 9.90 14.86 17.05 17.45 16.51

Cash Profit Margin(%) 11.42 15.43 17.50 17.25 16.75

Adjusted Cash Margin(%) 11.42 15.43 17.50 17.25 16.75

Net Profit Margin(%) 7.99 12.86 15.05 14.87 14.36

Adjusted Net Profit Margin(%) 7.91 12.64 14.71 14.63 14.15

Return On Capital Employed(%) 21.44 31.88 34.28 35.21 31.74

Return On Net Worth(%) 16.24 25.18 26.64 27.47 25.82

Adjusted Return on Net Worth(%) 16.24 25.18 26.64 27.47 25.82

Return on Assets Excluding Revaluations 153.38 142.78 240.34 393.50 316.29

Return on Assets Including Revaluations 153.38 142.78 240.34 393.50 316.29

Return on Long Term Funds(%) 22.26 32.43 34.29 35.21 32.27

Liquidity And Solvency Ratios

Current Ratio 2.15 1.91 2.39 2.57 2.40

Quick Ratio 2.37 2.02 2.32 2.48 2.59

Debt Equity Ratio 0.04 0.02 -- -- 0.02

Long Term Debt Equity Ratio -- -- -- -- --

Debt Coverage Ratios

Interest Cover 30.05 2,592.33 6,909.00 1,446.75 425.00

Total Debt to Owners Fund 0.04 0.02 0.00 0.00 0.02

Financial Charges Coverage Ratio 39.78 3,036.33 7,927.00 1,649.00 487.40

Financial Charges Coverage Ratio Post Tax

32.64 2,456.00 6,382.00 1,330.25 402.70

Management Efficiency Ratios

Inventory Turnover Ratio -- -- -- -- --

Debtors Turnover Ratio 5.60 5.62 5.49 5.77 5.50

Investments Turnover Ratio -- -- -- -- --

Fixed Assets Turnover Ratio 5.24 4.93 4.01 4.40 3.73

Total Assets Turnover Ratio 2.57 2.84 1.86 1.86 1.77

PEER COMPARISON AND COMPETITION

Name Last Price Market

Cap

Sales

Turnover

Net Profit Total

Assets

TCS 3523.15 674432.23 97356 25241 76086

Infosys 1215.85 265557.09 61941 16155 63502

Wipro 261.80 127434.79 44710 7722.80 52176

HCL Tech 906.50 126213.37 22073 7362 26004

TechMahindra 686.90 67307.67 23661.18 3999.30 17933

L&T 1663.35 28612.81 6906.40 1160.10 2675

Mindtree 1018.15 16690.16 5325 624.90 2853

Although Mindtree has various competitors in its sector, yet the financials and

performance has been exceptional.

Dynamic levels also recommends a buy for Mindtree due to its strong fundamental

parameters.

Quarterly Result % Growth:

Mar’17 Mar’18 % Growth

YoY PAT 97.20 182.20 87.45

YoY EBIDTA 140.10 197.20 40.76

Dec’17 Mar’18 % Growth

QoQ PAT 141.50 182.20 28.76

QoQ EBIDTA 165.50 197.20 19.15

Due to these two growth factors , dynamic recommends a BUY for the share as

they are positive.

Dynamic’s recommendations are also based on below risk factors

Our Criteria:

P/E Ratio Less than 30

Promoters Pledge Not be more than 30%

Institutional Holding The more the better

Debt to Equity Ratio Less than 2

Mindtree Limited:

P/E Ratio 29.31

Promoters Pledge 0

Institutional Holding 277

Debt to Equity Ratio 0.04

Average Volume in Stock 231.60

Comparing the fundamentals of MINDTREE LIMITED with our segregation

criteria , Mindtree has really good financials and fundamentals .We therefore

recommend a BUY.

One can easily access the D levels application available on the App store /

Playstore and view the financials for Mindtree. They can also make use of the

technical analysis ladder which is new technique provided by Dynamic levels.

To know which stocks to buy, which to hold and which to exit, do attend our

Seminar in Bangalore by Mr Shailesh Saraf on 27-28 June. For details, please

check https://www.dynamiclevels.com/en/seminar-registration

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