Merger Model Case

1 Develop a model on Persistant Systems

2 Value the Company
DCF KPIT Cummins acquires
Trading Comprables Persistant Systems
Transaction Comparables
3 KPIT Forecasted model
4 Merger model on the two
5 Sensitivity of the Merger model
Persistent Systems
Template
(All numbers in INR million, except per share numbers)
(Blue for actual, Red for assumptions, Black for calculations)
Date Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Year 2012 - A 2013 - A 2014 - A 2015 - E 2016 - E 2017 - E
Mar-18 Mar-19
2018 - E 2019 - E
Year 2012 - A 2013 - A 2014 - A 2015 - E 2016 - E

Revenue 10,003 12,945 16,692 20,713 25,643

Other Income 336 376 310 468 647
Total Revenue 10,339 13,321 17,002 21,181 26,290

Employee benefit Expenses 5,991 7,188 9,090 11,279 13,964

Cost of Technical Professionals 417 536 906 1,124 1,392
Gross Profit 3,931 5,597 7,006 8,777 10,934

Other Expenses 1,352 2,184 2,553 3,168 3,922

EBITDA 2,580 3,413 4,453 5,609 7,012

Depreciation 611 783 1,026 1,194 1,090

EBIT 1,969 2,630 3,427 4,415 5,923

Interest Expense 0 1 0 -
EBT 1,969 2,630 3,427 4,415 5,923

Total provision for Tax 551 754 934 1,203 1,614

PAT 1,418 1,876 2,493 3,212 4,309

EPS
Basic 37.02 48.62 64.07 82.55 110.74
Diluted 35.45 46.90 62.32 80.29 107.71

Number of Shares
Basic 38.30 38.59 38.91 38.91 38.91
Diluted 39.99 40.00 40.00 40.00 40.00

COGS 6,407 7,724 9,995 12,403 15,356

1300
P/E 16.19
P/B
EV/EBITDA
2017 - E 2018 - E 2019 - E

31,694 39,117 48,217

883 1,150 1,495
32,578 40,267 49,712

17,260 21,302 26,257

1,720 2,123 2,616
13,598 16,842 20,838

4,848 5,983 7,375

8,750 10,859 13,463

1,065 1,110 1,221

7,685 9,748 12,241

- - -
7,685 9,748 12,241

2,094 2,657 3,336

5,591 7,092 8,905

143.70 182.27 228.89

139.77 177.30 222.64

38.91 38.91 38.91

40.00 40.00 40.00

18,980 23,425 28,874

Persistent Systems
Schedules
(All numbers in INR million, except per share numbers)
(Blue for actual, Red for assumptions, Black for calculations)
Date Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Year 2012 - A 2013 - A 2014 - A 2015 - E 2016 - E 2017 - E

Revenue 10,003 12,945 16,692 20,713 25,643 31,694

Employee benefit Expenses 5,991 7,188 9,090 11,279 13,964 17,260

Cost of Technical Professionals 417 536 906 1,124 1,392 1,720
Other Expenses 1,352 2,184 2,553 3,168 3,922 4,848
Depreciation 611 783 1,026
Interest Expense - 0 1
Total provision for Tax 551 754 934

Commonsize Analsis ( As % of Revenue)

Employee benefit Expenses 60% 56% 54% 54% 54% 54%
Cost of Technical Professionals 4% 4% 5% 5% 5% 5%
Other Expenses 14% 17% 15% 15% 15% 15%
Depreciation 6% 6% 6%
Interest Expense 0% 0% 0%
Total provision for Tax 6% 6% 6%

Effective Tax Rate ( Total Provision fo 27.98% 28.66% 27.25% 27.25% 27.25% 27.25%

Tangible Assets 2,475 2,800 2,785 2,460 2,325 2,352

Intangible 722 702 1,269 1,121 1,060 1,072
Fixed Asset, Net 3,197 3,502 4,054 3,581 3,385 3,424

Depreciation 611 783 1,026 1,194 1,090 1,065

Depreciation Rate % 21% 27% 27% 27% 27%

Purchase of Fixed Assets 1,743 1,135 581 721 893 1,104

Purchase of Fixed Assets as % Revenue 17% 9% 3% 3% 3% 3%

Dividends Paid 200 340 440 567 760 986

Tax on Dividends 33 55 75 96 129 168
Payout Ratio % 14% 18% 18% 18% 18% 18%
DPS 5.22 8.80 11.30 14.56 19.54 25.35
Dividend Tax Rate % 16% 16% 17% 17% 17% 17%
Mar-18 Mar-19
2018 - E 2019 - E

39,117 48,217

21,302 26,257
2,123 2,616
5,983 7,375

54% 54%
5% 5%
15% 15%

27.25% 27.25%

2,525 2,840
1,151 1,294
3,676 4,134

1,110 1,221
27% 27%

1,362 1,679
3% 3%

1,251 1,571
213 267
18% 18%
32.16 40.38
17% 17%
Year 2012 - A 2013 - A 2014 - A 2015 - E

Share Capital 400 400 400 400

Reserves and Surplus 8,005 9,783 11,823 14,372
Total Sharehodlers Equity 8,405 10,183 12,223 14,772

Long Term Borrowings 7 14 32

Other Long term liabilities - 559 301 301
Long term provisions 71 80 93 93
Total Long Term liabilities 77 653 426 394

Trade Payables 257 319 434 500

Other Current Liabilities 691 527 1,140 1,140
Short term provisions 781 1,048 1,211 1,211
Total Current Liabilities 1,730 1,894 2,785 2,851

Total Liabilities and Shareholders' Equit 10,212 12,730 15,434 18,017

Goodwill 23 23
Tangible Assets 2,475 2,800 2,785 2,460
Intangible Assets 722 702 1,269 1,121
CWIP 511 1,174 307 307
Intangible Assets under development 17 -
Non Current Investments 123 173 823 823
DTA 107 190 260 260
Long term loans and advances 231 198 138 138
Other non current assets 43 524 459 459
Total Long term Assets 4,228 5,761 6,065 5,593

Current Investments 1,915 3,116 4,071 4,071

Trade Receivables 2,033 2,509 3,028 3,843
Cash and Bank Balance 1,333 561 957 3,198
Short term loans and advances 521 347 410 410
Other Current Assets 182 434 902 902
Total Current Assets 5,984 6,969 9,368 12,425

Total Assest 10,212 12,730 15,434 18,017

Checksum (A = L + E) - - - -

DSO 64.03 60.55 60.55

Payable Days 13.62 13.74 13.74
Interest Rate % 1% 1% 1%
Other Income Rate % 19% 29% 8%
average trade receivables/(Sales/365)
average trade payable/(COGS/365)
2016 - E 2017 - E 2018 - E 2019 - E

400 400 400 400

17,791 22,228 27,856 34,923
18,191 22,628 28,256 35,323

301 301 301 301

93 93 93 93
394 394 394 394

656 773 991 1,184

1,140 1,140 1,140 1,140
1,211 1,211 1,211 1,211
3,007 3,124 3,342 3,535

21,592 26,146 31,992 39,252

23 23 23 23
2,325 2,352 2,525 2,840
1,060 1,072 1,151 1,294
307 307 307 307
- - - -
823 823 823 823
260 260 260 260
138 138 138 138
459 459 459 459
5,396 5,435 5,687 6,145

4,071 4,071 4,071 4,071

4,664 5,851 7,126 8,870
6,149 9,477 13,795 18,853
410 410 410 410
902 902 902 902
16,196 20,711 26,305 33,107

21,592 26,146 31,992 39,252

- - - -

60.55 60.55 60.55 60.55

13.74 13.74 13.74 13.74
1% 1% 1% 1%
8% 8% 8% 8%
Year 2012 - A 2013 - A 2014 - A 2015 - E 2016 - E

PBT 1,969 2,630 3,427 4,415 5,923

Interest income (101) (93) (91)

Finance cost - 0 1
Dividend income (142) (155) (150)
Depreciation and amortization expense 611 783 1,026 1,194 1,090
Unrealised exchange loss (net) (117) 9 58
Change in foreign currency translation 37 13 (34)
Exchange loss / (gain) on derivative con 80 (90) 20
Exchange (gain) / loss on translation of 0 (1) 19
Bad debts 28 31 46
Provision for doubtful receivables (net) 67 93 28
Employee stock compensation expense 8 1 -
Provision for doubtful deposits 1 28 -
Provision for doubtful deposit written back (1)
Provision for doubtful advances 0
Provision for diminution in value of non-current investments 0
Intercorporate deposits written off 4
Excess provision in respect of earlier p (12) (2) (2)
Profit on sale of investments (net) (5) (13) (55)
(Profit)/ loss on sale of fixed assets (net (2) (4) 3
Operating profit before Working Capita 2,423 3,229 4,299 5,609 7,012

(Increase) in trade receivables (417) (609) (689) (815) (820)

(Increase) in other current assets (36) (160) (344)
Decrease/ (Increase) in loans and adva 67 (82) (112)
Increase in trade payables and current li 61 130 501 67 156
Increase in provisions 8 252 129
Total Change in Working Capital (318) (470) (514) (749) (665)
Operating Profit After Working Capital 2,105 2,759 3,785 4,860 6,347

Direct taxes paid (381) (596) (977) (1,203) (1,614)

Net Cash generated from operating acti 1,724 2,163 2,808 3,657 4,733

Payment towards capital expenditure (1,743) (1,135) (581) (721) (893)

Proceeds from sale of fixed assets 3 4 3
Acquisition of subsidiary net of cash of (123) (50) (32)
Purchase of non-current investments (8,827) (11,034) (651)
Purchase of current investments 9,417 9,846 (12,389)
Proceeds from sale/maturity of current (927) (520) 11,591
Investments in bank deposits having or 753 921 (24)
Maturity of bank deposits having origi (61) (28) 42
Inter corporate deposits placed 10 50 -
Inter corporate deposits refunded 77 101 7
Interest received - (20) 28
Dividends received 142 155 47
Net cash from Investing Activities (1,279) (1,711) (1,958) (721) (893)

Deferred Payment Loabilities (15) - -

Proceeds from long term borrowings 7 8 18 (32) -
Dividends paid (200) (340) (440) (567) (760)
Tax on dividend paid (33) (55) (75) (96) (129)
Net cash from Financing Activities (241) (387) (497) (695) (889)

Exchange differences (0) 1 (19)

Net Change in Cash 203 66 334 2,241 2,951

BOP-Cash 230 433 499 833 3,074

EOP-Cash 433 499 833 3,074 6,025

Cash & Bank Balance 1,333 561 957 3,198 6,149

Amount in Deposits 900 62 124 124 124

2017 - E 2018 - E 2019 - E

7,685 9,748 12,241

1,065 1,110 1,221

8,750 10,859 13,463

(1,187) (1,275) (1,744)

117 218 193

(1,070) (1,058) (1,551)

7,680 9,801 11,912

(2,094) (2,657) (3,336)

5,586 7,144 8,576

(1,104) (1,362) (1,679)

(1,104) (1,362) (1,679)

- - -
(986) (1,251) (1,571)
(168) (213) (267)
(1,154) (1,464) (1,838)

3,328 4,318 5,059

6,025 9,353 13,671

9,353 13,671 18,730

9,477 13,795 18,853

124 124 124

Persistent Systems
Revenue Metric
(All numbers in INR million, except per share numbers)
(Blue for actual, Red for assumptions, Black for calculations)
Date Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
Year 2012 - A 2013 - A 2014 - A 2015 - E 2016 - E

Onsite Offshore, IP Revenue Mix (%)

Onsite 20.70% 18.20% 20.90% 20.46% 19.99%
Offshore 70.50% 64.60% 61.10% 61.45% 61.80%
IP 8.80% 17.20% 18.00% 18.10% 18.20%

Revenue (INR Mn)

Onsite 2,071 2,356 3,489 4,237 5,127
Offshore 7,052 8,363 10,199 12,727 15,848
IP 880 2,227 3,004 3,749 4,668
Total 10,003 12,945 16,692 20,713 25,643

Exchange Rate (INR/USD) 5% 54.44 60.91 63.95 67.15

Billing Rates (USD/PPM)

Onsite - Linear 3% 12,669 13,119 14,416 14,848 15,294
Offshore - Linear 6% 3,803 4,057 4,178 4,429 4,694
IP - Linear 6% 4,558 5,392 5,716 6,059

Employee Details
Technical 6,223 6,540 7,349 8,239 9,218
Sales & Business Development 95 99 150
Others 310 331 358
Total 6,628 6,970 7,857 8,833 9,906

Employee Addition
Technical Emplyees 317 809 890 979
Total Employees 10% 342 887 976 1,073
Technical addition as % Total Addition 92.7% 91.2% 91.2% 91.2%

Effort
Billable Person Months 57,447 55,541 62,091 69,610 77,880
Onsite 3,718 4,585 5,140 5,751
Offshore 51,823 57,506 64,469 72,129

Onsite (%) 6.7% 7.4% 7.4% 7.4%

Offshore (%) 93.3% 92.6% 92.6% 92.6%

Billed Person Months 41,219 41,176 44,033 49,397 55,266

 Onsite 3,294 3,980 4,462 4,992
Offshore 37,882 40,053 44,935 50,274
Linear Utlization (Blended) 74.10% 70.90% 70.96% 70.96%
Onsite Utlization % 88.60% 86.80% 86.80% 86.80%
Offshore Utilization% 73.10% 69.70% 69.70% 69.70%

IP Led Person Months 6,135 8,974 9,148 10,256 11,474

Number of Employees
Billable (avg) 4,787 4,628 5,174 5,801 6,490
Billed (avg) 3,435 3,431 3,669 4,116 4,605
IP (avg) 511 748 762 855 956
Total (avg) 5,299 5,376 5,937 6,655 7,446
Total Development Employees 85% 82% 81% 80.78% 80.78%

Billable as % Total (avg) 90.4% 86.1% 87.2% 87.16% 87.16%

IP as % Total (avg) 9.6% 13.9% 12.8% 12.84% 12.84%
Mar-17 Mar-18 Mar-19
2017 - E 2018 - E 2019 - E

19.54% 19.09% 18.65%

62.15% 62.50% 62.84%
18.31% 18.41% 18.51%

6,192 7,467 8,992

19,699 24,448 30,299
5,803 7,202 8,925
31,694 39,117 48,217

70.51 74.03 77.74

15,753 16,225 16,712

4,976 5,275 5,591
6,422 6,808 7,216

10,295 11,479 12,782

11,087 12,385 13,814

1,077 1,184 1,303

1,181 1,299 1,429
91.2% 91.2% 91.2%

86,978 96,985 107,993

6,423 7,162 7,975
80,555 89,823 100,019

7.4% 7.4% 7.4%

92.6% 92.6% 92.6%

61,722 68,823 76,635

 5,575 6,216 6,922
56,147 62,607 69,713
70.96% 70.96% 70.96%
86.80% 86.80% 86.80%
69.70% 69.70% 69.70%

12,815 14,289 15,911

7,248 8,082 8,999

5,143 5,735 6,386
1,068 1,191 1,326
8,316 9,273 10,325
80.78% 80.78% 80.78%

87.16% 87.16% 87.16%

12.84% 12.84% 12.84%
Persistent Systems
DCF
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)

Growth Assumptions Enterpsire Value (EV)

World Economic Growth 5%
Current Market Price
Diluted Shares - 2014
CAPM Assumptions Market Capitalisation (E)
Ke 16.0% Debt (D) - 2014
RFR 8% Less: Cash & Cash Equivalents - 2014
Beta 1.00 Net Debt
Rp = Rm - Rf 8% Current Enterprise Value (EV)

Calculation of Free Cash Flow

Explicit Forecast Period
2014 - A 2015 - E 2016 - E 2017 - E 2018 - E

Revenues 17,002 21,181 26,290 32,578 40,267

EBITDA 4,453 5,609 7,012 8,750 10,859
EBIT 3,427 4,415 5,923 7,685 9,748
Tax Expense 934 1,203 1,614 2,094 2,657
Net Operating Profit After Tax = EBIT - 2,493 3,212 4,309 5,591 7,092
Depreciation & Amortisation 1,026 1,194 1,090 1,065 1,110
Working Capital Change (514) (749) (665) (1,070) (1,058)
Operating Cash Flow = NOPAT + Dep + 3,005 3,657 4,733 5,586 7,144
Capex (581) (721) (893) (1,104) (1,362)
FCFF 2,424 2,936 3,840 4,482 5,782

Diluted Shares 40 40 40 40 40

Projection Year 1 2 3 4
Present Value of FCF 2,531 2,855 2,872 3,194

Y/Y Growth Analysis

Revenues 25% 24% 24% 24%
EBITDA 26% 25% 25% 24%
EBIT 29% 34% 30% 27%
Depreciation & Amortisation 16% -9% -2% 4%

Margin Analysis (As % of Revenues)

EBITDA Margin 26% 27% 27% 27%
EBIT Margin 21% 23% 24% 24%
 Depreciation & Amortisation 6% 4% 3% 3%
Capex -3% -3% -3% -3%

Tax Rate (Tax Expense/EBIT) 27% 27% 27% 27%

Terminal Value Calculated Equity Value

Sum of PV of FCF for explicit forecast + 32,960 Enterprise Value
WACC 16% - Debt
World Economic Growth 5% + Cash
Terminal Value @ 2024 144,518 GGM Net Debt
PV of TV 32,787 Equity Value

TV = FCFF(TY)/(WACC - g)

Sensitivity Table - Intrinsic Value

Terminal Growth Rate (WEG)

1,667 4.0% 4.5% 5.0%
13%
14%
15%
16%
WACC
17%
18%
19%
20%
 Debt Equity Weightage
E/(D+E) 100%
1,313 D/(D+E) 0%
40
52,519 Interest Rate (%) - 2014 1%
31.9 Tax Rate (@) - 2014 27%
(956.5)
(924.7) WACC Calculation
51,595 WACC 15.99% <==

Terminal
iod First Stage of Valuation
Year
2019 - E 2020 - E 2021 - E 2022 - E 2023 - E 2024 - E 2025 - E

49,712 59,844 70,199 80,188 89,131 96,329 101,145

13,463 16,207 19,011 21,716 24,138 26,087 27,392
12,241 14,736 17,286 19,746 21,948 23,721 24,907
3,336 4,016 4,711 5,381 5,981 6,464 6,788
8,905 10,720 12,576 14,365 15,967 17,256 18,119
1,221 1,470 1,725 1,970 2,190 2,367 2,485
(1,551) (1,304) (1,304) (1,304) (1,304) (1,304) (1,304)
8,576 10,886 12,996 15,031 16,852 18,319 19,300
(1,679) (2,021) (2,371) (2,708) (3,011) (3,254) (3,416)
6,897 8,865 10,625 12,322 13,842 15,065 15,883

40 40 40 40 40 40 40

5 6 7 8 9 10 11
3,285 3,640 3,761 3,761 3,642 3,418 3,107 <==

3.08% Linear decline in revenue growth rate

23% 20.38% 17.30% 14.23% 11.15% 8.08% 5.00% 0
24% 20% 17% 14% 11% 8% 5%
26% 20% 17% 14% 11% 8% 5%
10% 20% 17% 14% 11% 8% 5%

27% 27% 27% 27% 27% 27% 27%

25%
 2% 2% 2% 2% 2% 2% 2%
-3% -3% -3% -3% -3% -3% -3%

27% 27% 27% 27% 27% 27% 27%

Intrinsic Value
65,747 <== as of todaEquity Value 66,671
32 Diluted Shares 40
957
(925) Intrinsic Value 1,667
66,671

5.5% 6.0%
0 0 0
30%

25%

20%

15%
Row 38

10%

5%

0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Persistent Systems
Public Comps Data
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)
Particulars MindTree
Balance Sheet Mar '16 Mar '15 Mar '14 Mar '13 Mar '12 Mar '11
Sources Of Funds
Total Share Capital 417 415 405 400
Equity Share Capital 417 415 405 400
Share Application Money - - - -
Preference Share Capital - - - -
Init. Contribution Settler - - - -
Preference Share Application Money - - - -
Employee Stock Opiton - - - -
Reserves 15,992 12,722 9,171 7,364
Revaluation Reserves - - - -
Networth 16,409 13,137 9,576 7,764
Secured Loans - 217 407 -
Unsecured Loans 27 32 37 46
Total Debt 27 249 444 46
Minority Interest - - - -
Policy Holders Funds - - - -
Group Share in Joint Venture - - - -
Total Liabilities 16,436 13,386 10,020 7,810

Application Of Funds
Gross Block 7,057 6,368 5,796 5,624
Less: Accum. Depreciation 3,621 3,779 3,205 2,618
Net Block 3,436 2,589 2,591 3,006
Capital Work in Progress 496 571 199 28
Investments 5,349 4,271 3,105 1,135
Inventories - - - -
Sundry Debtors 6,004 4,508 4,078 2,825
Cash and Bank Balance 1,175 1,238 583 363
Total Current Assets 7,179 5,746 4,661 3,188
Loans and Advances 4,537 3,733 2,794 2,722
Fixed Deposits - - 2 77
Total CA, Loans & Advances 11,716 9,479 7,457 5,987
Deffered Credit - - - -
Current Liabilities 2,948 2,412 2,608 1,816
Provisions 1,613 1,112 724 530
Total CL & Provisions 4,561 3,524 3,332 2,346
Net Current Assets 7,155 5,955 4,125 3,641
Minority Interest - - - -
Group Share in Joint Venture - - - -
Miscellaneous Expenses - - - -
Total Assets 16,436 13,386 10,020 7,810
Contingent Liabilities 7,353 5,172 1,113 378
Book Value (Rs) 394 316 236 194

P&L Statement Mar '16 Mar '15 Mar '14 Mar '13 Mar '12 Mar '11
Income
Sales Turnover 41,229 35,642 30,316 23,618 19,152 15,090
Excise Duty - - - -
Net Sales 41,229 35,642 30,316 23,618 19,152 15,090
Other Income 494 350 347 457
Stock Adjustments - - - -
Total Income 41,229 35,642 30,810 23,968 19,499 15,547
Expenditure - - - - - -
Raw Materials - - - - - -
Power & Fuel Cost - - - - - -
Employee Cost 23,846 20,615 17,820 14,274 12,261 9,853
Other Manufacturing Expe 2,268 1,960 - - 1,018 908
Selling and Admin Expense - - - - 1,726 1,737
Miscellaneous Expenses 6,184 5,346 6,390 4,824 1,214 743
Preoperative Exp Capitalis - - - - - -
Total Expenses 32,298 27,921 24,210 19,098 16,219 13,241
Operating Profit 8,931 7,721 6,106 4,520 2,933 1,849
PBDIT 8,931 7,721 6,600 4,870 3,280 2,306
Interest 5 5 4 10 5 72
PBDT 8,926 7,716 6,596 4,860 3,275 2,234
Depreciation 1,083 936 809 624 695 712
Other Written Off - - - - - -
Profit Before Tax 7,843 6,780 5,787 4,236 2,580 1,522
Extra-ordinary items - - - - 37 4
Profit Before Tax 7,843 6,780 5,787 4,236 2,617 1,526
Tax 1,706 1,475 1,275 847 430 295
Reported Net Profit 6,137 5,305 4,512 3,389 2,187 1,231
Minority Interest - - - - - -
Share Of P/L Of Associates - - - - - -
Net Income 5,998 5,191 3,393 3,393 3,393 3,393
Total Value Addition 24,210 19,098 16,219 13,241
Preference Dividend - - - -
Equity Dividend 1,200 779 1,041 497 162 100
DDT 204 132 180 81 26 17
Per share data
Shares in issue (lakhs) 417 417 417 415 405 400
Earning Per Share (Rs) 144 125 108 82 54 31
Equity Dividend (%) 250 120 40 25
Book Value (Rs) 394 316 236 194

Multiples Mar '16 Mar '15 Mar '14 Mar '13 Mar '12 Mar '11
EBITDA 8,931 7,721 6600 4870 3280 2306
EBIT 7,848 6,785 5791 4246 2585 1594
Shares(In Lacs) 417 417 417 415 405 400
Share Price 1148.6 1148.6 1148.6 1148.6 1148.6 1148.6
Equity Value 47,885 47,885 47,885 47,707 46,569 45,984
Enterprise Value 47,885 47,885 46,737 46,718 46,430 45,667
EPS 147.20 127.25 108.23 81.59 53.94 30.75
P/E Multiple 7.80 9.03 10.61 14.08 21.29 37.36
Beta 0.95
 Hexaware
Mar '10 Mar '16 Mar '15 Mar '14 Mar '13

395 600 593

395 600 593
- 1 0
- - -
- - -
- - -
- - -
6,065 11,392 11,445
- - -
6,460 11,993 12,039
- - -
31 - -
31 - -
- - -
- - -
- - -
6,490 11,993 12,039

4,512 7,145 6,304

1,973 1,995 1,861
2,539 5,150 4,443
242 220 757
1,963 3,383 2,354
- - -
2,218 3,236 3,649
169 3,011 1,969
2,386 6,246 5,618
2,113 3,312 2,613
180 - -
4,679 9,558 8,231
- - -
2,495 2,539 2,496
438 3,780 1,250
2,932 6,319 3,746
1,747 3,239 4,485
- - -
- - -
- - -
6,491 11,992 12,039
346 - -
 163 40 4

Mar '10 Mar '16 Mar '15 Mar '14 Mar '13

12,333 28,073 25,017 22,854 19,482

- - -
12,333 28,073 25,017 22,854 19,482
773 373 438
- - -
13,106 100% 100% 100% 28,073 25,017 23,226 19,920
- 0% 0% 0% - - - -
- 0% 0% 0% - - - -
- 0% 0% 0% - - - -
7,437 58% 58% 60% 14,769 13,161 12,219 10,606
736 6% 0% 0% 4,205 3,747 3,479 3,000
1,285 0% 0% 0% 561 500 - -
538 15% 21% 20% 2,835 2,526 2,345 1,949
- 0% 0% 0% - - - -
9,996 79% 79% 80% 22,370 19,935 18,043 15,555
2,337 20% 20% 19% 5,703 5,082 4,810 3,927
3,110 21% 21% 20% 5,703 5,082 5,183 4,365
51 0% 0% 0% 2 2 2 2
3,058 21% 21% 20% 5,701 5,080 5,181 4,364
611 3% 3% 3% 467 416 386 324
- 0% 0% 0% - - - -
2,448 19% 19% 18% 5,234 4,664 4,795 4,040
14 0% 0% 0% - - - -
2,462 19% 19% 18% 5,234 4,664 4,795 4,040
381 4% 4% 4% 1,213 1,081 1,004 763
2,081 15% 15% 14% 4,021 3,583 3,791 3,277
- 0% 0% 0% - - - -
- 0% 0% 0% - - - -
3,393 11% 11% 14% 3,958 3,389 3,791 3,277
9,996 18,043 15,555
- - -
118 792 508 3,331 1,603
20 135 86 569 260
- -
395 2,999 2,999 2,999 29,655
53 13 11 13 11
30 - -
163 40 41

Mar '10 Mar '16 Mar '15 Mar '14 Mar '13
3109.6 5,703 5,082 5183 4365.4
2499 5,237 4,667 4797 4041.3
395 2,999 2,999 2,999 29,655
1148.6 176.35 176.35 176.35 176.35
45,387 52,883 52,883 52,883 522,957
45,249 52,883 52,883 49,873 520,988
52.66 13.41 11.95 12.64 1.10
21.81 13.15 14.76 13.95 159.61
1.1
exaware Mpha
Mar '12 Mar '11 Mar '10 Mar '16 Mar '15

587 290 287

587 290 287
- 1 2
- - -
- - -
- - -
- - -
9,575 9,363 8,208
- - -
10,162 9,655 8,497
- 112 163
- - -
- 112 163
- - -
- - -
- - -
10,162 9,767 8,660

5,669 4,629 4,505

1,697 1,520 1,404
3,972 3,109 3,100
813 969 1,258
229 397 1,269
- - -
2,993 1,919 1,526
526 330 394
3,519 2,249 1,919
2,141 1,815 1,234
3,851 4,025 2,599
9,511 8,090 5,752
- - -
2,924 1,489 2,009
1,440 1,309 710
4,363 2,799 2,719
5,148 5,291 3,033
- - -
- - -
- - -
10,162 9,766 8,660
- - -
 3 7 6

Mar '12 Mar '11 Mar '10 Mar '16 Mar '15

14,505 10,546 10,386 65,909 61,803

- - -
14,505 10,546 10,386 65,909 61,803
730 530 (242)
- - -
15,235 11,076 10,143 100% 100% 100% 65,909 61,803
- - - 0% 0% 0% - -
- - - 0% 0% 0% - -
- - - 0% 0% 0% - -
8,210 6,755 5,711 53% 53% 53% 40,073 37,576
2,133 1,557 1,218 15% 15% 15% - -
922 824 1,043 2% 0% 0% - -
615 496 429 10% 10% 10% 13,182 12,361
- - - 0% 0% 0% - -
11,880 9,632 8,401 78% 78% 78% 53,254 49,937
2,625 913 1,985 21% 21% 20% 12,655 11,866
3,355 1,444 1,743 22% 22% 22% 12,655 11,866
31 32 26 0% 0% 0% 278 261
3,324 1,411 1,716 22% 22% 22% 12,376 11,605
247 242 271 2% 2% 2% 1,258 1,180
- - - 0% 0% 0% - -
3,077 1,169 1,445 21% 21% 20% 11,118 10,426
- (2) - 0% 0% 0% - -
3,077 1,167 1,445 21% 21% 20% 11,118 10,426
407 90 104 4% 4% 4% 2,975 2,789
2,670 1,076 1,342 16% 16% 16% 8,144 7,636
- - - 0% 0% 0% - -
- - - 0% 0% 0% - -
2,670 854 1,342 16% 16% 16% 8,359 7,588
11,880 9,632 8,401
- - -
1,173 437 201 5554% 2703% 1,672 1,138
190 72 34 88% 49% 284 193
- - -
29,336 14,520 14,365 2,101 2,101
9 7 9 40 36
- - -
35 66 59

Mar '12 Mar '11 Mar '10 Mar '16 Mar '15
3354.8 1443.5 1742.5 12,655 11,866
3107.8 1201.2 1471.6 11,396 10,686
29,336 14,520 14,365 2,101 2,101
176.35 176.35 176.35 451 451
517,337 256,062 253,329 94,771 94,771
516,811 255,843 253,098 94,771 94,771
0.91 0.74 0.93 38.75 36.34
193.74 238.00 188.80 11.64 12.41
 Mphasis
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

2,101 2,101 2,101 2,100 2,099

2,101 2,101 2,101 2,100 2,099
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
49,048 47,243 41,946 36,897 30,892
- - - - -
51,150 49,345 44,047 38,998 32,991
4,314 4,982 - 489 454
- - 2,690 2,435 -
4,314 4,982 2,690 2,924 454
- - - - -
- - - - -
- - - - -
55,464 54,326 46,738 41,921 33,445

31,758 32,439 19,923 20,037 14,145

7,715 7,818 7,831 8,495 7,836
24,043 24,621 12,092 11,542 6,309
60 263 - 102 89
18,154 18,995 25,192 17,765 14,600
- - - - -
7,778 6,511 6,358 13,072 12,054
4,583 5,799 4,124 2,098 1,055
12,361 12,310 10,482 15,170 13,110
15,283 14,768 13,632 10,617 10,202
- - - 798 728
27,644 27,078 24,113 26,585 24,040
- - - - -
10,742 9,696 8,632 9,121 8,096
3,695 6,934 6,028 4,952 3,497
14,437 16,630 14,660 14,073 11,593
13,207 10,448 9,453 12,512 12,447
- - - - -
- - - - -
- - - - -
55,464 54,326 46,738 41,921 33,445
- - - - -
 243 235 210 186 157

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

25,938 57,963 53,573 50,980 50,365

- - - - -
25,938 57,963 53,573 50,980 50,365
458 1,405 1,680 1,801 1,088
- - - - -
26,396 59,368 55,254 52,781 51,453 100% 100% 100%
- - - - - 0% 0% 0%
- 70 428 219 - 0% 0% 0%
- - - - - 0% 0% 0%
16,274 35,568 31,274 29,585 25,436 61% 62% 60%
- 2,979 3,920 7,365 7,841 0% 0% 5%
- - - 3,735 3,957 0% 0% 0%
5,289 9,020 7,462 222 475 20% 20% 15%
- - - - - 0% 0% 0%
21,563 47,637 43,084 41,126 37,710 82% 82% 80%
4,376 10,326 10,489 9,854 12,656 17% 17% 17%
4,833 11,731 12,170 11,655 13,744 18% 18% 20%
111 330 147 58 7 0% 0% 1%
4,722 11,400 12,023 11,598 13,737 18% 18% 19%
504 1,448 1,744 1,552 1,638 2% 2% 2%
- - - - - 0% 0% 0%
4,218 9,952 10,279 10,046 12,099 16% 16% 17%
- - (1) (0) (0) 0% 0% 0%
4,218 9,952 10,279 10,046 12,099 16% 16% 17%
1,191 2,514 2,356 1,828 1,192 5% 5% 4%
3,027 7,438 7,923 8,218 10,908 11% 11% 13%
- - - - - 0% 0% 0%
- - - - - 0% 0% 0%
3,091 7,438 7,923 8,218 10,908 12% 12% 13%
21,563 47,568 42,656 40,907 37,710
- - - - -
1,471 3,572 3,572 1,365 840 700% 1700%
250 607 580 222 140 48% 48%
- - - - -
2,101 2,101 2,101 2,100 2,099
14 35 38 39 52
- - - - -
243 235 210 186 157

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
4833.3 11730.5 12169.5 11655.2 13743.7
4329.4 10282.2 10425.8 10103.6 12105.9
2,101 2,101 2,101 2,100 2,099
451 451 451 451 451
94,771 94,767 94,758 94,726 94,682
94,502 93,950 93,324 95,551 94,081
14.40 35.40 37.71 39.13 51.96
31.31 12.74 11.96 11.53 8.68
0.86
 Cyient
Mar '16 Mar '15 Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

558 557 556 278 276

558 557 556 278 276
4 - - - -
- - - - -
- - - - -
- - - - -
- - - - -
11,108 9,792 8,523 7,761 6,623
- - - - -
11,670 10,349 9,080 8,038 6,899
- - - - 187
- - - - -
- - - - 187
- - - - -
- - - - -
- - - - -
11,670 10,349 9,080 8,038 7,086

3,118 2,878 2,702 4,231 3,958

- - - 2,237 1,866
3,118 2,878 2,702 1,994 2,092
228 174 58 605 584
2,057 1,670 1,793 2,764 1,027
- - - - -
1,803 1,813 1,425 904 1,541
4,248 3,908 2,939 482 661
6,051 5,721 4,363 1,385 2,201
2,387 1,528 1,316 1,556 644
- - - 1,379 2,068
8,438 7,249 5,679 4,320 4,913
- - - - -
1,439 841 622 736 1,215
732 781 531 909 315
2,170 1,621 1,153 1,644 1,530
6,268 5,628 4,526 2,676 3,383
- - - - -
- - - - -
- - - - -
11,670 10,349 9,080 8,038 7,086
- - - - -
 104 93 81 72 124

Mar '16 Mar '15 Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

29,371 25,875 12,245 10,516 8,638 6,477 5,618

- - 0 - -
29,371 25,875 12,245 10,516 8,638 6,477 5,618
524 373 906 298 462
- - - - -
29,371 25,875 12,769 10,889 9,544 6,774 6,080 100% 100%
- - - - - - - 0% 0%
- - - - - - - 0% 0%
- - - - - - - 0% 0%
14,686 12,938 5,717 4,995 4,241 3,306 2,787 50% 45%
7,097 6,252 3,085 2,698 2,279 1,798 1,333 24% 24%
- - - - - - - 0% 0%
- - - - - - - 0% 0%
- - - - - - - 0% 0%
21,782 19,189 8,802 7,692 6,520 5,104 4,120 69% 69%
7,589 6,686 3,967 3,196 3,024 1,670 1,960 31% 31%
7,589 6,686 3,967 3,196 3,024 1,670 1,960 31% 31%
8 7 4 1 9 3 5 0% 0%
7,581 6,678 3,964 3,195 3,015 1,667 1,955 31% 31%
1,492 1,314 649 563 412 376 407 5% 5%
- - - - - - - 0% 0%
6,088 5,364 3,315 2,632 2,604 1,292 1,548 26% 26%
- - - - - - - 0% 0%
6,088 5,364 3,315 2,632 2,604 1,292 1,548 26% 26%
1,762 1,552 766 771 642 135 235 6% 6%
4,327 3,812 2,549 1,862 1,961 1,156 1,313 20% 20%
- - - - - - - 0% 0%
- - - - - - - 0% 0%
4,044 3,485 2,549 1,862 1,961 1,156 1,313 20% 20%
227 13,518 9,816 7,753 7,760
- - - - -
809 523 228 304 152 119 108
137 89 227 49 25 20 18
- - - - -
1,120 1,120 1,120 1,116 1,114 1,113 555
36 31 23 17 14 11 -
- - - - -
- 133 103 153 108

Mar '16 Mar '15 Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
7,589 6,686 3967.4 3196.3 3023.8 1670 1960
6,097 5,371 3318.7 2633.1 2612.2 1294.5 1552.9
1,120 1,120 1,120 1,116 1,114 1,113 555
461 461 461 461 461 461 461
51,614 51,614 51,614 51,448 51,365 51,300 25,586
51,614 51,614 47,365 47,539 48,426 50,818 25,111
38.65 34.05 22.77 16.68 17.60 10.39 23.66
11.93 13.54 20.25 27.64 26.19 44.37 19.49
0.91
100%
0%
0%
0%
46%
25%
0%
0%
0%
71%
29%
29%
0%
29%
5%
0%
24%
0%
24%
7%
17%
0%
0%
17%
Persistent Systems
Relative Valuation
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)

Operating Statistics Capitalization Revenue

Share Price Equity Value Enterprise Value TTM
Company Name Ticker Mar-14
MindTree 1,149 47,885 46,737 30,810
Hexaware 176 52,883 49,873 23,226
Mphasis 451 94,771 94,502 26,396
Cyient 461 51,614 47,365 12,769

Maximum 1,149 94,771 94,502 30,810

75th Percentile 633 63,355 61,030 27,499
Median 456 52,248 48,619 24,811
25th Percentile 382 50,681 47,208 20,612
Minimum 176 47,885 46,737 12,769

Persistent Systems 1,313 52,519 51,595 17,002

Valuation Statistics Capitalization Enterprise Value / Revenu

Share Price Equity Value Enterprise Value TTM
Company Name Mar-14
MindTree 1,149 47,885 46,737 1.52
Hexaware 176 52,883 49,873 2.15
Mphasis 451 94,771 94,502 3.58
Cyient 461 51,614 47,365 3.71

Maximum 1,149 94,771 94,502 3.7 x

75th Percentile 633 63,355 61,030 3.6 x
Median 456 52,248 48,619 2.9 x
25th Percentile 382 50,681 47,208 2.0 x
Minimum 176 47,885 46,737 1.5 x

Persistent Systems 1,313 52,519 51,595 3.0 x

 Revenue EBITDA EPS Projected
TTM TTM Revenue
Mar-15 Mar-16 Mar-14 Mar-15 Mar-16 Mar-14 Mar-15 Mar-16 Growth
35,642 41,229 6,600 7,721 8,931 108 127 147 15.7%
25,017 28,073 5,183 5,082 5,703 13 12 13 7.7%
61,803 65,909 4,833 11,866 12,655 14 36 39 134.1%
25,875 29,371 3,967 6,686 7,589 23 34 39 102.6%

61,803 65,909 6,600 11,866 12,655 108 127 147 134.1%

42,182 47,399 5,537 8,757 9,862 44 59 66 110.5%
30,759 35,300 5,008 7,203 8,260 19 35 39 59.2%
25,661 29,047 4,617 6,285 7,117 14 29 32 13.7%
25,017 28,073 3,967 5,082 5,703 13 12 13 7.7%

21,181 26,290 4,453 5,609 7,012 62 80 108 24.6%

Enterprise Value / Revenue Enterprise Value / EBITDA P / E Multiple

TTM TTM
Mar-15 Mar-16 Mar-14 Mar-15 Mar-16 Mar-14 Mar-15 Mar-16
1.31 1.13 7.08 6.05 5.23 10.6 x 9.0 x 7.8 x
1.99 1.78 9.62 9.81 8.74 13.9 x 14.8 x 13.2 x
1.53 1.43 19.55 7.96 7.47 31.3 x 12.4 x 11.6 x
1.83 1.61 11.94 7.08 6.24 20.2 x 13.5 x 11.9 x

2.0 x 1.8 x 19.6 x 9.8 x 8.7 x 31.3 x 14.8 x 13.2 x

1.9 x 1.7 x 13.8 x 8.4 x 7.8 x 23.0 x 13.8 x 12.2 x
1.7 x 1.5 x 10.8 x 7.5 x 6.9 x 17.1 x 13.0 x 11.8 x
1.5 x 1.4 x 9.0 x 6.8 x 6.0 x 13.1 x 11.6 x 10.7 x
1.3 x 1.1 x 7.1 x 6.1 x 5.2 x 10.6 x 9.0 x 7.8 x

2.4 x 2.0 x 11.6 x 9.2 x 7.4 x 21.1 x 16.4 x 12.2 x

EBITDA Margin
TTM
Mar-14 Mar-15 Mar-16
21.4% 21.7% 21.7%
22.3% 20.3% 20.3%
18.3% 19.2% 19.2%
31.1% 25.8% 25.8%

31.1% 25.8% 25.8%

24.5% 22.7% 22.7%
21.9% 21.0% 21.0%
20.6% 20.0% 20.0%
18.3% 19.2% 19.2%

26.2% 26.5% 26.7%

Persistent Systems
Transaction Comps Data
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)

Operating Metri

Target Acquisition Equity Enterprise TTM

Acquirer Name Target Name Ticker Date Value Value Revenue
MYCOM North America Objective Systems
Inc Integrators Inc OSII US 3-Jun-14 $ 281 $ 281 $ 77

SQS Software Quality Thinksoft Global

TGSL IN 8-Nov-13 $ 47 $ 47 $ 32
Systems AG Services Ltd
Baring Private Equity Asia Hexaware
HEXW IN 23-Aug-13 $ 544 $ 544 $ 391
Ltd Technologies Ltd
Firstsource Solutions
CESC Ltd FSOL IN 25-Oct-12 $ 447 $ 447 $ 514
Ltd

Maximum $ 544 $ 544 $ 514

75th Percentile 471 471 422
Median $ 364 $ 364 $ 234
25th Percentile 222 222 66
Minimum 47 47 32
Operating Metrics Valuation Multiples - Acquisition Premiums
Forward Forward Forward Forward
Year 1 TTM Year 1 TTM Year 1 TTM Year 1
Revenue EBITDA EBITDA Revenue Revenue EBITDA EBITDA 1-Day 20-Day
$ 115 $ 10 $ 17 3.7 x 2.4 x 29.2 x 16.7 x 21% 33%

$ 42 $ 7 $ 9 1.5 x 1.1 x 7.1 x 5.1 x 74% 90%

$ 469 $ 83 $ 108 1.5 x 1.2 x 6.6 x 5.0 x 14% 15%

$ 592 $ 60 $ 76 0.9 x 0.8 x 7.4 x 5.9 x 6% 6%

$ 592 $ 83 $ 108 3.7 x 2.4 x 29.2 x 16.7 x 74.4% 90.2%

500 66 84 2.0 x 1.5 x 12.8 x 8.6 x 34.6% 47.0%
$ 292 $ 35 $ 46 1.5 x 1.1 x 7.3 x 5.5 x 17.5% 23.7%
97 9 15 1.3 x 1.0 x 7.0 x 5.1 x 11.6% 12.7%
42 7 9 0.9 x 0.8 x 6.6 x 5.0 x 5.6% 6.3%
Persistent Systems
Valuation Summary
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)

Multiple
25th 75th
Minimum Pecentile Median Pecentile Maximum
Methodology Name Multiple Multiple Multiple Multiple Multiple

Public Company Comparables:

TTM TEV / Revenue: 1.5 x 2.0 x 2.9 x 3.6 x 3.7 x
12/31/2008 TEV / Revenue: 1.3 x 1.5 x 1.7 x 1.9 x 2.0 x
12/31/2009 TEV / Revenue: 1.1 x 1.4 x 1.5 x 1.7 x 1.8 x
TTM TEV / EBITDA: 7.1 x 9.0 x 10.8 x 13.8 x 19.6 x
12/31/2008 TEV / EBITDA: 6.1 x 6.8 x 7.5 x 8.4 x 9.8 x
12/31/2009 TEV / EBITDA: 5.2 x 6.0 x 6.9 x 7.8 x 8.7 x

Precedent Transactions:
TTM TEV / Revenue: 0.9 x 1.3 x 1.5 x 2.0 x 3.7 x
Forward Year 1 TEV / Revenue: 0.8 x 1.0 x 1.1 x 1.5 x 2.4 x
TTM TEV / EBITDA: 6.6 x 7.0 x 7.3 x 12.8 x 29.2 x
Forward Year 1 TEV / EBITDA: 5.0 x 5.1 x 5.5 x 8.6 x 16.7 x

Public Company Premiums:

1-Day Premiums: 5.6% 11.6% 17.5% 34.6% 74.4%
20-Day Premiums: 6.3% 12.7% 23.7% 47.0% 90.2%

Discounted Cash Flow Analysis:

5-9% Growth Rate, 11-15% Discount Rate
 Persistant Implied price
Applicable 25th 75th
Persistant Minimum Pecentile Median Pecentile Maximum
Figure Multiple Multiple Multiple Multiple Multiple

17,002 645 846 1,217 1,535 1,577 645 201 372

21,181 694 781 890 991 1,056
26,290 745 893 1,001 1,087 1,168
4,453 788 1,001 1,200 1,541 2,177
5,609 849 957 1,055 1,182 1,376
7,012 917 1,050 1,202 1,365 1,533

17,002 366 555 622 859 1,556

21,181 400 548 606 784 1,292
4,453 731 777 808 1,430 3,251
5,609 708 712 771 1,207 2,340

1,313 1,387 1,465 1,542 1,767 2,290

1,250 1,328 1,409 1,547 1,837 2,378

1,289 1,454 1,665 1,943 2,327

318 41
Persistent Systems
Valuation Graph
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)

Persistant Implied price

25th 75th
Minimum Pecentile Median Pecentile Maximum
Methodology Name Multiple Multiple Multiple Multiple Multiple

TTM TEV / Revenue: 645 846 1,217 1,535 1,577

12/31/2008 TEV / Revenue: 694 781 890 991 1,056
12/31/2009 TEV / Revenue: 745 893 1,001 1,087 1,168
TTM TEV / EBITDA: 788 1,001 1,200 1,541 2,177
12/31/2008 TEV / EBITDA: 849 957 1,055 1,182 1,376
12/31/2009 TEV / EBITDA: 917 1,050 1,202 1,365 1,533

TTM TEV / Revenue: 366 555 622 859 1,556

Forward Year 1 TEV / Revenue: 400 548 606 784 1,292
TTM TEV / EBITDA: 731 777 808 1,430 3,251
Forward Year 1 TEV / EBITDA: 708 712 771 1,207 2,340

1-Day Premiums: 1,387 1,465 1,542 1,767 2,290

20-Day Premiums: 1,328 1,409 1,547 1,837 2,378

5-9% Growth Rate, 11-15% Discount Rate 1,289 1,454 1,665 1,943 2,327
Min Point 25 Point Med Point 75 Point Max Point

645 201 372 318 41

694 86 109 101 65
745 148 108 86 81
788 212 200 341 636
849 108 98 126 194
917 133 152 163 168

366 189 67 236 697

400 148 58 178 509
731 47 30 622 1,821
708 4 59 435 1,133

1,387 78 77 225 522

1,328 81 138 291 540

1,289 165 211 278 384

5-9% Growth Rate, 11-15% Discount
Rate

20-Day Premiums:

1-Day Premiums:

Forward Year 1 TEV / EBITDA:

TTM TEV / EBITDA:

Forward Year 1 TEV / Revenue:

TTM TEV / Revenue:

12/31/2009 TEV / EBITDA:

12/31/2008 TEV / EBITDA:

TTM TEV / EBITDA:

12/31/2009 TEV / Revenue:

12/31/2008 TEV / Revenue:

TTM TEV / Revenue:

- 500 1,000 1,500 2,000 2,500 3,000 3,500

Column G Min - 25-Point 25 Point - Median Median - 75 Point 75-Point - Max

KPIT cummins
Income Statement
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)
Date Mar-09 Mar-10 Mar-11 Mar-12
Year 2009 - A 2010 - A 2011 - A 2012 -A

Overseas Sales 7,410 6,716 9,468

Domestic Sales 521 600 762
Total Sales 7,932 7,316 10,230 15,138

Software Development Expenses 4,467 4,090 6,599 7,718

Gross Profit 3,464 3,226 3,631 7,421

Selling and Marketing Expenses 688 664 762

General and Administration Expenses 943 948 1,346
Other Expenses 1,631 1,611 2,109 5,117
EBITDA 1,834 1,614 1,522 2,304

Depreciation / Amortization 436 308 411 445

EBIT 1,397 1,306 1,111 1,859

Interest Expense 45 27 13 73
EBT 1,352 1,279 1,098 1,786

Interest Income 0 0 0
Other Income -574 -253 5 138
PBT 778 1,026 1,103 1,924

Exceptional Items 100

EBT 778 1,026 1,103 2,025

Total Provision for Tax 120 169 155 437

PAT Before Exceptional Item 658 857 948 1,588

Exceptional Item - Provision for decli - - -

PAT 658 857 948 1,588

Profit Share in Associate 35

Minority Interest 0 0 -2 31
PAT/Net Income 659 857 946 1,592

EPS
Basic 8.44 10.97 11.76 8.19
Diluted 8.41 10.80 11.35 8.08
Number of Shares
Basic 78 78 80 194
Diluted 78 79 83 197
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
2013 - A 2014 - A 2015 -E 2016 -E 2017 -E 2018 -E 2019 -E

22,386 29,226 35,486 43,549 53,961 67,441 84,926

11,408 14,897 18,088 22,197 27,504 34,375 43,288

10,978 14,329 17,399 21,351 26,457 33,065 41,638

7,622 9,914 12,038 14,773 18,306 22,878 28,810

3,356 4,415 5,360 6,578 8,151 10,187 12,828

472 488 638 805 1,001 1,243 1,549

2,884 3,927 4,722 5,774 7,150 8,944 11,279

142 213 117 - - - -

2,743 3,714 4,606 5,774 7,150 8,944 11,279

117 131 119 153 220 349 462

2,860 3,846 4,725 5,927 7,369 9,293 11,741

(13)
2,847 3,846 4,725 5,927 7,369 9,293 11,741

766 1,034 1,270 1,594 1,982 2,499 3,157

2,082 2,811 3,454 4,333 5,388 6,794 8,584

2,082 2,811 3,454 4,333 5,388 6,794 8,584

(5)
86
1,990 2,811 3,454 4,333 5,388 6,794 8,584

10.86 14.47 17.77 22.30 27.72 34.96 44.17

10.56 14.27 17.53 22.00 27.35 34.49 43.57
194 194 194 194 194 194 194
197 197 197 197 197 197 197
KPIT cummins
Balance Sheet
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)
Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Year 2009 - A 2010 - A 2011 - A 2012 -A 2013 - A 2014 - A

Share Capital 156 157 176 356 386 386

Application Money 0 1 3 1 1 -
Outstanding Employees’ 0 17 5 - - -
Reserves and Surplus 1,475 3,697 5,849 6,768 9,975 12,787
Total Sharehodlers' Equity 1,631 3,871 6,032 7,125 10,362 13,172

Secured Loans 1,185 1,108 1,105 669 1,459 7

Unsecured Loans - - - - - -
Other Debt - -
Minority Interest 3 0 9 326 270 270
Deferred Tax Liability 60 51 55 8 - -
Other Liabilities 367 143 143
Total Liabilities and Shar 2,878 5,030 7,201 8,495 12,235 13,593

Gross Block - Fixed Asse 2,205 2,514 2,941 -

Less: Accumulated Depre 1,042 1,278 1,678 -
Net Block 1,163 1,236 1,263 1,339 1,385 1,812
Capital Work-in-Progres 348 286 317 92 59 59
Net Block after CWIP 1,510 1,522 1,581 1,431 1,444 1,871

Intangible assets 329 377 377

Intangible assets under development 93 184 184
Goodwill on consolidati 285 950 1,300 3,623 4,423 4,423
Investments 0 747 477 217 118 118
Other Assets 773 1,256 1,256
Total Fixed Assets 1,795 3,219 3,357 6,466 7,801 8,228

Current Investments 365 2,036 2,036

Sundry Debtors 1,776 1,388 2,525 4,233 4,673 6,953
Cash and Bank Balances 1,671 1,052 2,096 1,473 1,921 1,544
Loans and Advances 449 677 1,097 581 593 593
Other Current Assets 164 823 823
Total Current Assets 3,896 3,117 5,719 6,815 10,047 11,950

Short Term Borrowings 1,470 1,753 1,753

Current Liabilities 2,716 1,076 1,636 1,757 1,904 2,876
Provisions 97 230 238 1,559 1,956 1,956
Total Current Liabilities 2,813 1,306 1,875 4,785 5,613 6,585
Net Current Assets (CA - C 1,083 1,811 3,844 2,029 4,434 5,365

Preliminary Expenses - - - - - -

Total Assets 2,878 5,030 7,201 8,495 12,235 13,593

Checksum - - - - -0 0

Balace Sheet Ratios

Current Ratio 1.38 2.39 3.05 1.42 1.79
Cash Ratio 0.59 0.81 1.12 0.38 0.71
Days Sales Outstanding ( 81.71 78.90 69.81 81.47 72.60 72.60
Payable Days 221.93 169.19 75.01 80.23 58.56 58.56
Debt/Equity 0.73 0.29 0.18 0.30 0.31
ROE (%) 40% 31% 19% 24% 23%
BVPS 20.83 48.77 72.38 36.17 52.60
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
2015 -E 2016 -E 2017 -E 2018 -E 2019 -E

386 386 386 386 386

- - - - -
- - - - -
16,241 20,574 25,962 32,756 41,340
16,627 20,960 26,348 33,142 41,726

- - - - -
- - - - -
- - - - -
270 270 270 270 270
- - - - -
143 143 143 143 143
17,040 21,373 26,761 33,555 42,139

2,285 2,843 3,531 4,398 5,507

59 59 59 59 59
2,343 2,902 3,589 4,457 5,566

377 377 377 377 377

184 184 184 184 184
4,423 4,423 4,423 4,423 4,423
118 118 118 118 118
1,256 1,256 1,256 1,256 1,256
8,701 9,259 9,947 10,814 11,924

2,036 2,036 2,036 2,036 2,036

7,163 10,161 11,305 15,523 18,261
2,607 4,651 8,642 12,120 17,948
593 593 593 593 593
823 823 823 823 823
13,223 18,264 23,401 31,096 39,662

- - - - -
2,928 4,195 4,631 6,399 7,491
1,956 1,956 1,956 1,956 1,956
4,884 6,150 6,587 8,355 9,446
 8,339 12,114 16,814 22,741 30,216

- - - - -

17,040 21,373 26,761 33,555 42,139

0 0 0 0 0

72.60 72.60 72.60 72.60 72.60

58.56 58.56 58.56 58.56 58.56
KPIT cummins
Cash Flow Statement
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)
Date Mar-09 Mar-10 Mar-11 Mar-12
Year 2009 - A 2010 - A 2011 - A 2012 -A

Net Profit /(Loss) before tax 778 1,026 1,103 1,886

Adjustments for: - - -
(Profit) / Loss on sale of fixed assets ( 10 18 2 1
Depreciation/Amortization 436 308 411 445
Interest and Financial charges 74 67 42 73
Interest income -24 -40 -32 -17
Provision for doubtful debts/(Write b 43 0 0 0
Bad debts written off - 4 8 -
Provision for doubtful advances/(Writ - 12 (8) -
Employee Stock Option cost - 17 0 4
Dividend income - -12 -34 -37
Effect of exchange differences on tran (1) (1) (10) -
Preliminary Expenses (to the extent no 0.043 - - -
Exchange differences on translation o (16) 37 (31) 20
Minority Interest - - - -
Profit on Closure on Subsidiary - - - -
Unrealised foreign exchange (gain)/lo -81 23 19 -128
Profit on sale of Business Assets -100
Operating Profit before working capita 1,219 1,459 1,471 2,146
Adjustments for working capital
Increase/(Decrease) in Other Long-Term Liabilities -39
Increase/(Decrease) in Long-Term Provisions -30
Increase/(Decrease) in Other Current Liabilities (Refer Note 3 below) -147
Increase/(Decrease) in Short-Term Provisions 95
(Increase)/Decrease in Other Non-Current Asset -8
(Increase)/Decrease in Other Current Assets 91
(Increase)/Decrease in Sundry Debtor -335 488 -976 -1,291
(Increase)/Decrease in Loans and Ad -53 -169 -334 -56
Increase/(Decrease) in Current Liabili 501 -488 619 515
Change in Working Capital 113 -169 -690 -870
Cash generated from operations 1,332 1,289 781 1,276
Direct taxes - - - -
Prior Year Taxes - - - -
Deferred Tax - - - -
Employee Welfare Fund (3)
Taxes Paid -141 -213 -249 -268
Net cash from operating activities 1,191 1,076 532 1,005
 Purchase of fixed assets and Intangibl -493 -238 -469 -609
Proceeds from sale of fixed assets -3 1 3 6
Investment in Equity Shares of Subsidiaries -2,088
Investment in Equity Shares of Assosiate -98
Investment in Preference Shares of Subsidiary -278
Sale/(Purchase) of Investments 1 -747 270 112
Proceeds from Sale of Business Assets (Refer Note 3 below) 65
Loan (given to)/repaid by Employee Welfare trust 3
Sale of Investments in shares of bank - - - -
Interest received 24 46 21 29
Dividend received - - - 37
Minority Interest - - - -
Acquisition of Sparta Consulting Inc. - (364) - -
Acquisition of Minority shareholding - (182) - -
Acquisition of Minority shareholding o- (122) - -
Acquisition of In2soft GmbH - - (108) -
Acquisition of CPG Solutions Inc - - (355) -
Dividend received from Mutual Fund - 12 34 -
Fixed Deposit with banks (net) havin (198) 159 39 (6)
Net Cash from/(used in) investing activi -669 -1,435 -565 -2,828

Repayment of term loan (Net) 161 -237 -226 537

Raising of Other Debt
Proceeds from issue of Share Capital 0 26 1,232 65
Proceeds from issue of shares on Emp - - - -
Share Issue expenses for Preferential - - (30) -
Application Money Received - 1 2 -
Proceeds of upfront consideration for - - - -
Availment of loan - - - -
Proceeds from working capital loan (n 161 203 128 666
Increase/(Decrease) in Finance Lease -2 -2 6 0
Proceeds from Short-term loan - - 39 (43)
Dividend paid including corporate div -64 -55 -64 -72
Proceeds from Issued/ Paid up/ Subcr - - - -
Interest & Finance Charges (74) (68) (42) (69)
Interest on Term Loan capitalized - - - -
Net Cash from/ (used in) Financing activ 182 -132 1,045 1,084

Increase/(Decrease) in foreign exchange translation reserve 0

Exchange Differences on Translation o 16 -37 31 -20
Net Increase/(Decrease) in Cash and c 720 -528 1,042 -760

EOP - Cash 1,460 1,001 2,080 1,467

BOP - Cash 740 1,460 1,001 2,080
Cash and cash equivalents of In2soft Gm - - -
Cash and cash equivalents of CPG Solutio - - 37
Cash and cash equivalents of Sparta Cons - 69 -
Add: Cash & cash equivalents on acquisition of subsidiaries 146

Deposits with original maturity over t 198 39 - 6

Deposits under lien 13 13 16

Checksum (0.00) 0.00 (0.04) -

Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
2013 - A 2014 - A 2015 -E 2016 -E 2017 -E 2018 -E 2019 -E

2,847 3,846 4,725 5,927 7,369 9,293 11,741

1
472 488 638 805 1,001 1,243 1,549
142
-18

94
-
-54

(4)

-113
-81
3,284 4,333 5,363 6,732 8,371 10,536 13,290

-2
39
21
31
5
-660
-440 (2,281) (210) (2,997) (1,145) (4,218) (2,738)
(224) - - - - - -
147 972 52 1,267 436 1,768 1,091
(1,083) (1,309) (158) (1,731) (708) (2,449) (1,647)
2,201 3,025 5,205 5,001 7,662 8,087 11,643

-
-998 -1,034 -1,270 -1,594 -1,982 -2,499 -3,157
1,203 1,991 3,934 3,407 5,681 5,588 8,486
 -701 (915) (1,111) (1,363) (1,689) (2,111) (2,658)
3
-1,113

-1,672 - - - - - -
81
-8

18
54
(142)

(24)
-3,503 -915 -1,111 -1,363 -1,689 -2,111 -2,658

1,054 (1,452) (7) - - - -

- - - - - -
1,706

(44)
(1) - - - - -

279

- - (1,753) - - - -
-145

(128)

2,722 -1,453 -1,761 0 0 0 0

4
426 -377 1,063 2,044 3,992 3,477 5,828

1,893 1,516 2,579 4,623 8,615 12,092 17,920

1,467 1,893 1,516 2,579 4,623 8,615 12,092
 0

28 28 28 28 28 28 28

0 - - - - - -
KPIT cummins
Revenue Metrics
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)
Date Mar-09 Mar-10 Mar-11 Mar-12
Year 2009 - A 2010 - A 2011 - A 2012 -A

Onsite Revenues 44.90% 40.21% 40.64% 48.64%

Offshore Revenue 55.10% 59.79% 59.36% 51.36%

Onsite Revenues (mn) 3,561 2,942 4,158 7,363

Offshore Revenue (mn) 4,370 4,374 6,073 7,775
Total Revenues 7,932 7,316 10,230 15,138

Development Team – Onsite (Avg) 599 559 634 813

Development Team - Offshore(Avg) 3,674 3,753 4,723 5,466
Total Development Team 4273 4312 5357 6279

Onsite Development Team % 14% 13% 12% 13%

Offshore Development Team % 86% 87% 88% 87%

Onsite FTE 562 512 569 745

Offshore FTE 2,626 2,674 3,234 3,968
Total FTE 3188 3186 3803 4713

Development (at Qtr end) 4,168 4,478 5,998 7,071

Gen Mgmt / Support (at Qtr end) 357 380 414 526
Marketing (Subsidiaries) (at Qtr end) 51 60 102 122
Total (at Qtr end) 4,576 4,918 6,514 7,719

Employee Addition Details

Development Team Addition #REF! 310 1,520 1,073
Total Team Addition 25% #REF! 342 1,596 1,205
Development Team addition as % of Total Addition #REF! 91% 95% 89%

Onsite utilization 93.81% 91.63% 89.80% 91.64%

Offshore utilization 71.49% 71.24% 68.48% 72.59%

Number of work hours per day 8 8 8 8

Number of work days per month 22 22 22 22

Hours Billed
Onsite 1186944 1081344 1201728 1573440
Offshore 5546112 5647488 6830208 8380416

Billing Rate (INR/Hr)

Onsite 3,000 2,721 3,460 4,680
Offshore 788 775 889 928

Exchange Rate (INR/USD) 45 45 45 45

Billing Rate (USD/Hr)

Onsite 66.67 60.46 76.88 103.99
Offshore 17.51 17.21 19.76 20.62

y/y% growth in billing rate

Onsite
Offshore

Total Sales 7,932 7,316 10,230 15,138

Software Development Expenses 4,467 4,090 6,599 7,718

Other Expenses 1,631 1,611 2,109 5,117
Depreciation / Amortization 436 308 411 445
Interest Expense 45 27 13 73
Total Provision for Tax 120 169 155 437

Common size analysis (% of Total Sales)

Software Development Expenses 56.3% 55.9% 64.5% 51.0%
Other Expenses 20.6% 22.0% 20.6% 33.8%
Depreciation / Amortization 5.5% 4.2% 4.0% 2.9%
Interest Expense 0.6% 0.4% 0.1% 0.5%
Total Provision for Tax 1.5% 2.3% 1.5% 2.9%

Effective Tax Rate (Total Provision for Tax/EBT-Be 15% 16% 14% 22%
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
2013 - A 2014 - A 2015 -E 2016 -E 2017 -E 2018 -E 2019 -E

53.82% 53.11% 52.39% 51.68% 50.96% 50.24% 49.52%

46.18% 46.89% 47.61% 48.32% 49.04% 49.76% 50.48%

12,048 15,521 18,592 22,504 27,498 33,883 42,058

10,338 13,704 16,894 21,044 26,463 33,558 42,868
22,386 29,226 35,486 43,549 53,961 67,441 84,926

1,139 1,424 1,657 1,947 2,310 2,763 3,330

6,486 8,112 9,434 11,086 13,151 15,733 18,960
7,648 9,565 11,124 13,072 15,508 18,552 22,357

15% 14.89% 14.89% 14.89% 14.89% 14.89% 14.89%

85% 84.81% 84.81% 84.81% 84.81% 84.81% 84.81%

1074 1,343.29 1,562.19 1,835.83 2,177.86 2,605.41 3,139.84

4,805 6,009.14 6,988.40 8,212.47 9,742.56 11,655.17 14,045.93
5879 7,352.43 8,550.59 10,048.29 11,920.42 14,260.58 17,185.78

7,648 9,564.94 11,123.66 13,072.05 15,507.54 18,551.91 22,357.36

538
135
8,321 10,321.00 11,947.25 13,980.06 16,521.08 19,697.35 23,667.68

577 1,917 1,559 1,948 2,435 3,044 3,805

602 2,000 1,626 2,033 2,541 3,176 3,970
96% 95.85% 95.85% 95.85% 95.85% 95.85% 95.85%

94.30% 94.30% 94.30% 94.30% 94.30% 94.30% 94.30%

74.08% 74.08% 74.08% 74.08% 74.08% 74.08% 74.08%

8 8 8 8 8 8 8
22 22 22 22 22 22 22

2268288 2837029.563 3299355.313 3877262.501 4599646.485 5502626.46573 6631351.44135

 ### 12691307.38 14759498.09 17344736.48 20576284.48 24615719.4672 29665013.2051

5,312 5,471 5,635 5,804 5,978 6,158 6,342

1,019 1,080 1,145 1,213 1,286 1,363 1,445

45 45 45 45 45 45 45

118.04 121.58 125.22 128.98 132.85 136.84 140.94

22.64 24.00 25.44 26.96 28.58 30.29 32.11

3% 3% 3% 3% 3% 3% 3%
6% 6% 6% 6% 6% 6% 6%

22,386 29,226 35,486 43,549 53,961 67,441 84,926

11,408 14,897 18,088 22,197 27,504 34,375 43,288

7,622 9,914 12,038 14,773 18,306 22,878 28,810
472
142
766

51.0% 51.0% 51.0% 51.0% 51.0% 51.0% 51.0%

34.0% 33.9% 33.9% 33.9% 33.9% 33.9% 33.9%
2.1%
0.6%
3.4%

27% 27% 27% 27% 27% 27% 27%

KPIT cummins
Schedules PPE,g PPE,n
(All data is Millions INR, except per share informatProperty, Plant and Equipment , Net
(Red for assumptions, Blue for actual data, Black for calculations)
Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Year 2009 - A 2010 - A 2011 - A 2012 -A 2013 - E 2014 - A

Net Block 1,163 1,236 1,263 1,339 1,385 1,812

Depreciation 436 308 411 445 472 488

Depreciation as % Opening Net Block 26.5% 33.3% 35.2% 35.2% 35.2%

Purchase of Assets (Capex) 493 238 469 609 701 915

Purchase of Assets as % of Total Sales 6.2% 3.3% 4.6% 4.0% 3.1% 3.1%
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
2015 -E 2016 -E 2017 -E 2018 -E 2019 -E

2,285 2,843 3,531 4,398 5,507

638 805 1,001 1,243 1,549

35.2% 35.2% 35.2% 35.2% 35.2%

1,111 1,363 1,689 2,111 2,658

3.1% 3.1% 3.1% 3.1% 3.1%
KPIT cummins
Debt Schedule
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)
Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Year 2009 - A 2010 - A 2011 - A 2012 -A 2013 - E 2014 - A

Cash BOP 1,893

Cash flow from operations 1,991
Cash flow from investing (915)
Cash flow from financing (1)
Minimum Cash for Operations 1,516 (1,516)
Cash available for repayment of debt 1,452

Debt Schedule
Secured Loans 1,185 1,108 1,105 669 1,459 7
Unsecured Loans - - - - - -
Short Term Borrowing - - - 1,470 1,753 1,753
Other Debt - - - - - -
Total Debt 1,185 1,108 1,105 2,139 3,213 1,761

Repayment Schedule
Secured Loans 1 1,452
Unsecured Loans 2 -
Short Term Borrowing 3 -
Other Debt -

Cash available for investing

Interest Expense 45 27 13 73 142 213

Interest Expense Rate % (Opening Debt) #REF! 2% 1% 7% 7% 7%

Other Income -574 -253 5 138 117 131

Investible Surplus (BOP Cash + Investment + C 740 2,207 1,477 2,662 3,621 4,047
Other Income Rate % -78% -11% 0% 5% 3% 3%
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
2015 -E 2016 -E 2017 -E 2018 -E 2019 -E

1,516 2,579 4,623 8,615 12,092

3,934 3,407 5,681 5,588 8,486
(1,111) (1,363) (1,689) (2,111) (2,658)
- - - - -
(1,516) (1,516) (1,516) (1,516) (1,516)
2,824 3,107 7,099 10,576 16,404

- - - - -
- - - - -
- - - - -
- - - - -
- - - - -

7 - - - -
- - - - -
1,753 - - - -
- - - - -

117 - - - -
7% 7% 7% 7% 7%

119 153 220 349 462

3,670 4,733 6,777 10,769 14,246
3% 3% 3% 3% 3%
Persistant Systems
Synergies
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)
Date Mar-15 Mar-16 Mar-17 Mar-18
Year 2015 -E 2016 -E 2017 -E 2018 -E
Revenue Synergy~ Persistent

Revenue Services 20,713 25,643 31,694 39,117

Utilization
% points inc in Utilization 0% 5% 5% 5%
Utilization 71% 75% 75% 75%
Billed 4,116 4,836 5,401 6,022
Billable 5,801 6,490 7,248 8,082
IP 855 956 1,068 1,191

Billed Employees
Onsite (PPM) 4,462 5,241 5,854 6,527
Offshore (PPM) 44,935 52,788 58,954 65,737
IP (PPM) 10,256 11,474 12,815 14,289

Revenue Mix
Onsite Revenue 4,237 5,383 6,502 7,841
Offshore Reve 12,727 16,641 20,684 25,671
IP 3,749 4,668 5,803 7,202
Total Revenue 20,713 26,692 32,989 40,713

Revenue Synergy - 1,049 1,295 1,596

Cost for servicing additional revenue (%) 20% 20% 20% 20%
Cost of Revenue Synergy - 210 259 319

Cost Synergy ~ Persistent

Total Revenue 20,713 25,643 31,694 39,117

Employee benefit Exp. 11,279 13,964 17,260 21,302

Cost of Technical Prof. 1,124 1,392 1,720 2,123
Other Exp. 3,168 2,640 3,263 4,028
Total Expenses 15,572 17,996 22,243 27,452

Expenses as % of Revenue
Employee benefit Exp. 54% 54% 54% 54%
Cost of Technical Prof. 5% 5% 5% 5%
Other Exp. 15% 10% 10% 10%

Decrease in Other Exp due to Merger 0% 5% 5% 5%

Cost Synergy - 1,282 1,585 1,956
Mar-19
2019 -E

48,217

5%
75%
6,706
8,999
1,326

7,268
73,199
15,911

9,442
31,814
8,925
50,181

1,965
20%
393

48,217

26,257
2,616
4,965
33,838

54%
5%
10%

5%
2,411
Merged Entity
Merger Model
(All data is Millions INR, except per share information)
(Red for assumptions, Blue for actual data, Black for calculations)

Buyer Assumptions - KPIT Technologies

Name: KPIT Technologies
Ticker: KPIT
Fiscal Year Ends: 31-Mar
Share Price: 162
Fully Diluted Shares Outstanding: 197
Market Capitalization: 31,914
Cash & Cash Equivalents: 1,544
Equity Investments:
Debt: 1,761
Preferred Stock:
Minority Interest:
Enterprise Value: 32,132
Tax Rate: 27%
Minimum Cash Balance: 1,000

Transaction Structure & Assumptions - Scenarios

Select Scenario: 1

Selected
Scenario
Scenario: 1
Per-Share Purchase Price: 1,350
Equity Purchase Price: 53,999
Implied Premium: 2.8%
Revenue Synergy %: 5.0%
Expense Synergy %: 5.0%
Financing Fees: 217
Transaction Fees: 81
Funds Required: 54,216
% Cash: 0.0%
% Stock: 60.0%
% Debt: 40.0%
% Term Loan: 50.0%
Cash Used: -
Stock Used: 32,530
Common Shares Issued: 201
Debt, Term Loan: 10,843
 Debt, High-Yield: 10,843
Foregone Cash Interest Rate: 5.0%
Term Loan Interest Rate: 10%
High-Yield Debt Interest Rate: 12.0%

Sources & Uses

Sources:
Buyer Cash: -
Buyer Stock Issuance: 32,530
Term Loan: 10,843
High-Yield Debt: 10,843
Excess Cash: 81
Total Sources: 54,297

Buyer Income Statement - Summary - KPIT Technologies

Mar-13 Mar-14
2013 - A 2014 - A

Revenue: 22,386 29,226

Operating Income: 2,884 3,927
Pre-Tax Income: 2,847 3,846
Pro-Forma Net Income: 1,990 2,811
Pro-Forma EPS: 10.56 14.27

Seller Income Statement - Summary - Persitent Technologies - Based on Buyer Fiscal Years
Mar-13 Mar-14
2013 - A 2014 - A

Revenue: 13,321 17,002

Operating Income: 2,630 3,427
Pre-Tax Income: 2,630 3,427
Pro-Forma Net Income: 1,876 2,493
Pro-Forma EPS: 46.90 62.32

Combined Income Statement and Transaction Adjustments

Buyer + Seller Revenue:

Revenue Synergies:
Revenue

Buyer + Seller Operating Income:

Revenue Synergies:
 Expenses Associated with Revenue Synergies:
Cost Synergies:
Operating Income:

Interest / Investment Income:

Acquisition Effects:
Foregone Interest on Cash:
New Interest Expense:
New Amortization Expense:
Financing Fees Amortization:
Pre-Tax Income:

Book Taxes

Net Income
Diluted Shares Outstanding:
Shares Issued in Transaction:
Total New Shares Outstanding:
EPS
EPS - Buyer Standalone
EPS Accretion / Dilution

Breakeven Incremental Synergies for PF EPS

Sensitivity Analysis - Pro-Forma Year 1 EPS Accretion/Dilution and Purchase Price vs. Cash/Stock Split

Purchase Consideration - %STOCK:

(3.6%) 0.0% 30.0% 35.0% 40.0%
$ 1,600.00
$ 1,550.00
Per Share Purchase Price

$ 1,500.00
$ 1,450.00
$ 1,400.00
$ 1,350.00
$ 1,300.00
$ 1,250.00
$ 1,200.00
$ 1,150.00

Sensitivity Analysis - Pro-Forma Year 1 EPS Accretion/Dilution and Purchase Price vs. Revenue Synerg

Revenue Synergies - % Seller Existing Rev

(3.6%) 3.0% 3.5% 4.0% 4.5%
$ 1,600.00
rchase Price
 $ 1,550.00

Per Share Purchase Price

$ 1,500.00
$ 1,450.00
$ 1,400.00
$ 1,350.00
$ 1,300.00
$ 1,250.00
$ 1,200.00
$ 1,150.00
Seller Assumptions - Persistent Systems
Name: Persistent Systems
Ticker: Persistent
Fiscal Year Ends: 31-Mar
Share Price: 1,313
Fully Diluted Shares Outstanding: 40
Market Capitalization: 52,519
Cash & Cash Equivalents: 957
Equity Investments:
Debt: 1,172
Preferred Stock:
Minority Interest:
Enterprise Value: 52,735
Tax Rate: 27%

%: Amount: Period:
Financing Fees: 1.0% 217 5
Advisory Fees: 0.1% 54 N/A
Legal & Misc. Fees: 0.1% 27 N/A

1 2 3 4 5
1,350 1,350 1,400 1,450 1,450
53,999 53,999 55,999 57,999 57,999
2.8% 2.8% 6.6% 10.4% 10.4%
5.0% 5.0% 5.0% 5.0% 5.0%
5.0% 5.0% 5.0% 5.0% 5.0%
217 - 281 350 -
81 81 81 81 81
54,216 53,999 56,281 58,349 57,999
0.0% 0.0% 0.0% 0.0% 0.0%
60.0% 100.0% 50.0% 40.0% 100.0%
40.0% 0.0% 50.0% 60.0% 0.0%
50.0% 50.0% 30.0% 50.0% 50.0%
- - - - -
32,530 53,999 28,140 23,340 57,999
201 333 174 144 358
10,843 - 8,442 17,505 -
 10,843 - 19,698 17,505 -
5.0% 5.0% 5.0% 5.0% 5.0%
10% 10% 10% 10% 10%
12.0% 12.0% 12.0% 12.0% 12.0%

Uses:
Equity Value of Company: 53,999
Transaction Fees: 81
Capitalized Financing Fees: 217

Total Uses: 54,297

Mar-15 Mar-16 Mar-17 Mar-18 Mar-19

2015 -E 2016 -E 2017 -E 2018 -E 2019 -E

35,486 43,549 53,961 67,441 84,926

4,722 5,774 7,150 8,944 11,279
4,725 5,927 7,369 9,293 11,741
3,454 4,333 5,388 6,794 8,584
17.53 22.00 27.35 34.49 43.57

r Fiscal Years
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
2015 -E 2016 -E 2017 -E 2018 -E 2019 -E

21,181 26,290 32,578 40,267 49,712

4,415 5,923 7,685 9,748 12,241
4,415 5,923 7,685 9,748 12,241
3,212 4,309 5,591 7,092 8,905
80.29 107.71 139.77 177.30 222.64

Combined Years
2016 -E 2017 -E 2018 -E 2019 -E

69,839 59,814 72,587 89,006

1,049 1,295 1,596 1,965
50,095 60,125 72,950 89,423

11,696 14,835 18,692 23,521

1,049 1,295 1,596 1,965
 -210 -259 -319 -393
1,282 1,585 1,956 2,411
13,817 17,455 21,924 27,503

153 220 349 462

-4 -4 -4 -4
-1,084 -1,084 -1,084 -1,084
-1,301 -1,301 -1,301 -1,301
(43) (43) (43) (43)
11,538 15,242 19,841 25,532

3,102 4,099 5,335 6,865

8,435 11,144 14,506 18,667

197 197 197 197
201 201 201 201
398 398 398 398
21 28 36 47
22 27 34 44
-4% 2% 6% 8%

431 -361 -1,076 -1,823

Purchase Price vs. Cash/Stock Split

Purchase Consideration - %STOCK:

45.0% 50.0% 55.0% 60.0% 100.0%

Purchase Price vs. Revenue Synergies (50% Cash/Stock)

nue Synergies - % Seller Existing Revenue:

5.0% 5.5% 6.0% 6.5% 7.0%