印度IT服务：现金生成与估值趋势

Issuer of report:HSBC Securities and CapitalMarkets (India) Private LimitedView HSBC Global Research at:https://www.research.hsbc.comListen to our insightsFind out moreHSBC Global Research PodcastsYogesh Aggarwal*Head of Research, IndiaHSBC Securities and Capital Markets (India) Private Limitedyogeshaggarwal@hsbc.co.in+91 22 2268 1246Prateek Maheshwari*, CFAAnalyst, India Cement, IT and AutosHSBC Securities and Capital Markets (India) Private Limitedprateek.maheshwari@hsbc.co.in+9198 1937 0718Sagar Desai*Analyst, India Cement, ITand AutosHSBC Securities and Capital Markets (India) Private Limitedsagar.desai@hsbc.co.in+91 83 6919 9927* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations.EquitiesIT ServicesIndia ◆◆◆ 2Inthetop-tier–INFY reportedadecent improvement in FY25, while TCS continued to moderateoverthe past 5 yearsOCF/EBITDAFY16FY17FY18FY19FY20FY21FY22FY23FY24FY25FY16-25TCS68.2%83.5%86.6%80.2%84.0%90.7%79.4%75.1%74.1%72.7%79.1%Infosys71.7%75.6%76.6%75.8%83.3%86.5%79.3%65.5%69.2%91.0%77.7%HCLT81.0%91.5%75.9%67.3%75.9%96.0%82.4%78.1%92.8%87.3%83.5%Wipro73.0%82.2%80.8%102.7%82.3%99.9%67.3%77.5%103.2%93.3%86.3%TechM74.1%97.3%75.3%69.9%76.1%118.2%65.9%69.4%128.4%82.8%83.9%LTIM84.4%111.5%71.1%74.1%81.0%88.1%61.9%50.7%88.8%70.0%73.4%Persistent60.9%63.1%89.9%74.5%71.3%107.7%87.5%62.9%77.7%56.2%72.9%Coforge76.4%102.0%76.3%70.2%41.2%96.9%68.6%71.7%60.0%62.7%69.8%MPHL81.2%68.3%69.0%71.7%80.0%82.4%81.1%60.9%90.9%72.1%76.1%Hexaware73.4%82.1%72.7%74.8%67.9%137.1%86.5%67.2%95.9%84.6%74.2%LTTSn/a66.2%71.2%88.0%57.5%131.8%71.1%76.2%77.8%78.3%79.5%KPITn/an/an/an/a131.6%206.1%108.3%74.2%101.7%113.4%93.9%Cyient66.4%86.6%54.0%57.4%97.7%140.1%77.2%56.9%60.7%77.7%75.5%OCF/RevenueTCS19.3%22.9%22.9%21.6%22.5%25.0%22.0%19.7%19.5%19.2%21.3%Infosys19.6%20.5%20.6%19.2%20.4%24.0%20.5%15.7%16.4%21.9%19.7%HCLT17.4%20.2%17.2%15.5%17.5%25.6%19.7%17.7%20.4%19.0%19.2%Wipro15.4%16.9%15.5%19.9%16.5%23.8%14.0%14.4%19.6%19.0%17.4%TechM12.1%14.0%11.5%12.8%11.8%21.4%11.8%10.5%12.3%10.9%12.8%LTIM14.8%21.1%11.5%14.7%15.1%19.4%12.4%9.3%16.0%12.0%13.6%Persistent11.0%10.0%13.9%12.8%9.9%17.6%14.8%11.4%13.3%9.7%12.3%Coforge13.4%17.6%12.8%12.3%7.1%16.3%11.9%11.9%9.8%10.1%11.7%MPHL12.0%10.9%11.2%12.3%14.9%15.0%14.3%10.6%16.4%13.4%13.3%Hexaware12.6%13.4%12.1%11.8%10.7%22.9%13.7%8.9%14.6%12.9%13.4%LTTSn/a11.9%11.0%15.9%11.4%24.4%15.3%16.3%15.5%13.9%15.2%KPITn/an/an/an/a18.0%30.8%19.5%13.7%20.6%23.8%21.0%Cyient9.0%11.6%7.6%8.0%13.2%20.7%14.0%10.0%12.3%13.6%12.0%FCF/RevenueTCS17.4%21.2%21.4%20.2%21.0%23.4%20.7%18.6%18.3%17.6%19.8%Infosys15.2%16.5%17.8%16.2%16.8%21.9%18.7%13.9%15.0%20.5%17.3%HCLT14.5%17.4%6.5%9.5%15.1%23.0%17.8%16.1%19.5%18.1%16.3%Wipro12.7%13.1%11.4%16.0%12.6%20.7%11.5%12.8%18.5%17.4%14.7%TechM8.7%11.3%8.2%10.4%9.5%19.6%9.7%8.6%10.7%9.8%10.6%LTIM12.6%19.9%10.2%13.1%12.8%17.2%8.4%6.5%13.6%9.5%11.1%Persistent3.8%2.4%11.7%11.7%7.7%14.5%8.0%6.3%10.8%7.2%8.5%Coforge7.4%14.5%9.8%10.4%5.4%14.7%9.5%9.9%6.9%5.1%8.7%MPHL9.9%9.0%10.7%11.2%13.5%13.7%13.3%9.8%15.7%13.0%12.2%Hexaware8.2%7.1%9.7%10.5%8.4%21.7%12.1%7.6%14.0%11.8%11.5%LTTSn/a10.5%8.7%14.3%8.6%22.9%12.8%14.1%12.9%12.8%13.2%KPITn/an/an/an/a14.8%27.9%16.7%9.9%16.7%19.9%17.4%Cyient4.8%8.6%3.8%4.7%8.3%18.3%12.6%8.8%10.8%11.8%9.3%Note:Fiscal yearfor Hexaware is on a CY basis, i.e. Jan-Dec, and for the other mid-tier companies in the exhibit above it is April-March.Source:Company data, HSBC Exhibit10:Use ofcash forthetop 5Indian IT companies (FY16-FY25)Over thepast 10 years, TCS and Infosys havereturned75-80%ofthecashthey havegenerated to shareholders; itis improving for other companies as well,nowNote:For LTIMindtree, numbers prior to FY22 are for LTI.Fiscal yearfor Hexaware is on a CY basis, i.e. Jan-Dec, and for the other mid-tier companies in the exhibit above it isApril-March.Source: Company data, HSBC7121516748053551417241941560%20%40%60%80%100%TCSInfosysHCLTWiproFY16-FY25CapexDividends+BuybackM&A + Others 17511616TechMCash Surplus Disclosure appendixAnalyst CertificationThe following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s)whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the coveringanalyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) orissuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), andany otherviews or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflecttheir personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to thespecificrecommendation(s) or views contained in this research report: Yogesh Aggarwal, Prateek Maheshwari, CFA and Sagar DesaiImportant disclosuresEquities: Stock ratings and basis for financial analy