IFIM Business School

Bangalore

BUSINESS VALUATION
BY

THE METHOD OF COMPARABLES

Submitted by
Talluri Prasanth
2015JULB02046
PGDM-FINANCE

IT Industry
Information Technology in India is an industry consisting of two major components:
IT services and
Business process outsourcing (BPO).
1. The sector has increased its contribution to India's GDP from 1.2% in 1998 to 7.5% in 2012.
2. According to NASSCOM, the sector aggregated revenues of US$147 billion in 2015, where
export revenue stood at US$99 billion and domestic at US$48 billion, growing by over 13%.
3. India's Prime Minister Narendra Modi has started 'Digital India' project to give IT a secured
position inside & outside India.
Market Size:
The size of the domestic IT-ITeS market rose from US$ 1.9 billion in FY2000 to an estimated
US$ 19.0 billion in FY2014, thereby registering a CAGR of 17.8% during the said period
(NASSCOM, 2014).
Structure:
The structure of the domestic segment is similar to that of the export segment:
a) The domestic IT-ITeS sector exhibits a pyramidal structure with few big players and a
large number of small and medium vendors.
b) The service offerings of the tier I players (including MNCs) encompass the entire valuechain of IT.
Competition:
a) The sector is highly competitive with user industries embracing IT to match best-in-class
practices for enhancing competitiveness.
b) The sector embraces emerging technologies such as service oriented architecture (SOA),
software as a service (SaaS), and cloud computing.

Tech Mahindra:
The Company offers a bouquet of services which includes
1. Telecom Services,
2. Consulting,
3. Application Outsourcing,
4. Infrastructure Outsourcing,
5. Engineering Services,
6. BPO,
7. Platform Solutions and
8. Mobile Value Added Services.

The Company serves 767 customers, including several of the Fortune 500 Companies. Your
Company has 85 delivery centers and 49 sales offices spread over India & abroad.

As on 31st March, 2015, your Company has 149 Subsidiaries which includes 109 step-down
subsidiaries and 4 Associate Companies.

In the fiscal year 2014-15 the Companys consolidated revenues increased to 226,213 Million
from 188,314 Million in the previous year, a growth of 20.1%.

The growth during the year was led by acquisitions as well as organic growth.

The geographic split of revenue was balanced with 47% share of Americas, 31% share of
Europe, and 22% from Rest of the World.

Research & Development:

Information technology group Tech Mahindra is partnering with US-Israeli Comverse Inc to set
up a research and development centre in Israel. The two companies did not disclose financial
details.