IT AND IT ENABLED SERVICES May 31, 2012

KPMGs Corporate Finance practice is pleased to release the thirty fourth issue of 'IT and ITES Monthly Update'.
This monthly update will highlight select M&A transactions announced in April 2012 and give indicative multiples for key IT and ITES companies.

Contents

M&A Update for IT and ITeS Industry

Page 2

Valuations Update for the IT Industry

Page 3

Valuations Update for the ITeS Industry

Page 4

KPMG's Corporate Finance practice provides a wide ranging of investment banking and strategic advisory services to clients, advising on mergers and acquisitions, divestitures, financing, and other strategic initiatives.

Rajesh Jain Head of Markets KPMG in India rcjain@kpmg.com Tel: +91 22 3090 2370

Anand Vermani Director Corporate Finance KPMG in India avermani@kpmg.com Tel: +91 124 334 5121

Jayant Kumaar Associate Director Corporate Finance KPMG in India jkumaar@kpmg.com Tel: +91 124 334 5115

IT AND ITES ENABLED SERVICES MONTHLY UPDATE / Advisory / May 31, 2012
2012, KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

M&A update for the IT and ITeS Industry

Key deals in April 2012
Wipro acquires Australian analytics firm Promax Wipro signed a definitive agreement to acquire Australian analytics company Promax Applications Group (PAG) for US$36 million (INR 192 crore). This deal will help Wipro gain additional capabilities in Analytics and information management services. It will also help the company expand its geographic footprint in Australia.
Source: Business Standard, Wipro to buy analytics firm Promax for 36mn, May 1, 2012

Thomson Reuters Acquires Tax Software Biz Of Fast Facts Thomson Reuters acquired the tax software business of Fast Facts, a Mumbai-based tax software provider. The acquisition is aimed at strengthening Thomson Reuters position in financial services and business information segment, which accounts for almost 90 percent of Thomson Indias business.
Source: Dealcurry, Thomson Reuters Acquires Tax Software Biz Of Fast Facts, April 10, 2012

Key IT and ITeS transactions (April 2012)

Target Country Acquirer Country Deal size (USD m n)

Sr. No

Target

Deal type

Acquirer/Investor

Promax Applications Group Pty Ltd

India

Acquisition

Wipro Limited

India

36

Fast Facts Computer Systems' tax Softw are business

India

Acquisition

Thomson Reuters Corp

United States

NA

Source: Mergermarket website: www.mergermarket.com ISI Emerging Markets Press Releases Note: * Announced

2012, KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Valuations update for the Information Technology industry (April 30, 2012)
April 30, 2012
Com pany Commercial IT Services - Large Cap HCL Technologies Ltd. Infosys Ltd. Tata Consultancy Services Ltd Wipro Ltd. Commercial IT Services - Large Cap Mean Commercial IT Services - Large Cap Median Commercial IT Services - Mid Cap 3i Infotech, Ltd. Cambridge Solutions, Ltd. CMC Limited Cranes Softw are International Ltd Geometric Limited Hexaw are Technologies Limited Infotech Enterprises Limited KPIT Cummins Infosystems Ltd. Mastek Limited MindTree Limited NIIT Technologies Limited Nucleus Softw are Exports Ltd. Oracle Financial Services Softw are Ltd. Patni Computer Systems Limited Persistent Systems Limited Polaris Industries, Inc. R Systems International Ltd. Rolta India Ltd. Sasken Communication Technologies Ltd. Sonata Softw are Limited Subex Limited Take Solutions Ltd. Tech Mahindra Limited Zensar Technologies Limited Commercial IT Services - Mid Cap Mean Commercial IT Services - Mid Cap Median
Source: Company filings Company websites Bombay Stock Exchange: Website: www.bseindia.com CapitalIQ, www.capitaliq.com Note: iGate has acquired Patni Computer Systems Limited however the Company continues to be separately listed in India

INR Million, except share price

Market Cap(1) Share price (2) 52 Wk Low 52 Wk High Net Sales (3) EBITDA(4) EBITDA Margin Net Profit (5) Net Profit Margin EV (6)/ Sales (3) EV (6)/ EBITDA(4) P/E

354,630 1,407,121 2,436,544 990,124

512 2,463 1,245 405

360 2,169 903 310

527 3,020 1,279 454

198,712 388,552 488,938 370,766

31,544 122,665 144,167 70,864

16% 32% 29% 19% 24% 24%

21,991 95,332 104,135 55,730

11% 25% 21% 15% 18% 18%

1.8 3.0 4.9 2.5 3.0 2.8

11.3 9.6 16.5 13.0 12.6 12.2

16.1 14.8 23.4 17.8 18.0 16.9

2,745 1,905 27,156 300 4,242 38,260 18,060 15,179 2,681 23,869 15,498 2,154 219,982 75,328 14,382 302,240 1,955 14,278 3,158 1,966 1,632 3,745 89,266 9,452

14 17 896 3 68 130 162 85 99 588 260 67 2,620 508 360 4,413 158 89 121 19 24 31 700 218

12 12 728 2 35 61 100 68 73 321 166 56 1,699 250 281 2,511 91 50 91 18 23 20 524 113

54 45 1,390 5 81 134 182 99 136 594 285 97 2,766 521 407 4,551 165 144 165 49 68 49 798 242

19,789 5,653 14,670 2,683 8,079 15,703 15,530 15,000 6,573 19,152 15,765 2,823 31,467 38,606 10,003 156,637 4,320 18,692 5,200 11,085 4,872 6,605 53,321 17,825

3,598 (36) 2,134 (2,468) 1,042 3,173 2,683 1,912 (117) 2,938 2,629 361 11,111 6,151 2,057 24,320 398 7,977 806 675 1,352 1,384 9,566 2,449

18% NA 15% NA 13% 20% 17% 13% NA 15% 17% 13% 35% 16% 21% 16% 9% 43% 16% 6% 28% 21% 18% 14% 18% 16%

(31) 5,374 1,518 (1,108) 592 3,016 1,614 1,454 (295) 2,185 1,972 353 9,093 4,227 1,418 13,352 205 2,832 640 437 407 835 8,852 1,587

0% 95% 10% NA 7% 19% 10% 10% NA 11% 13% 13% 29% 11% 14% 9% 5% 15% 12% 4% 8% 13% 17% 9% 16% 11%

1.3 0.3 1.7 2.9 0.5 2.1 0.9 1.1 0.3 1.1 0.8 0.8 5.7 1.4 1.1 1.9 0.2 1.7 0.3 0.1 1.5 0.8 1.9 0.5 1.3 1.1

7.3 NA 11.7 NA 4.0 10.6 5.0 8.3 NA 7.0 5.0 6.0 16.2 8.6 5.4 12.0 2.4 4.0 1.7 2.1 5.5 3.8 10.6 3.7 6.7 5.4

NA 0.4 17.9 NA 7.2 12.7 11.2 10.4 NA 10.9 7.9 6.1 24.2 17.8 10.1 22.6 9.5 5.0 4.9 4.5 4.0 4.5 10.1 6.0 9.9 9.5

(1) (2) (3) (4) (5) (6) (7)

Market Capitalization amounts are in INR millions, based on closing Share Prices as of April 30, 2012 Share Prices are in INR Net sales and valuation multiples are based on twelve trailing month (TTM) numbers for quarter ending March 2012 EBITDA equals Earnings before Interest, Taxes, Depreciation and Amortization Net profit is before minority interest and includes extra-ordinary items Enterprise Value (EV) equals Market Cap plus Total Debt, Minority Interest, Preference Shares minus Cash and Cash equivalent Total Debt, Cash and Cash equivalent are as per latest available annual report Cambridge Solutions EV/EBITDA, Cranes Software International Limited and Mastek Limited EV/EBITDA and P/E are indeterminate due to negative TTM net income and negative EBITDA quarters.

2012, KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Valuations update for the ITeS industry (April 30, 2012)

April 30, 2012
Company Commercial ITES Services - India Allsec Technologies Limited Datamatics Global Services Ltd eClerx Services Limited Firstsource Solutions Limited Hinduja Global Solutions Ltd HOV Services Limited Commercial ITES Services - India listed Mean Commercial ITES Services - India listed Median
Source: Company filings Company websites Bombay Stock Exchange: Website: www.bseindia.com CapitalIQ, www.capitaliq.com

INR Million, except share price

Market Cap(1) Share price (2) 52 Wk Low 52 Wk High Net Sales(3) EBITDA
(4)

EBITDA Margin

Net Profit

(5)

Net Profit Margin

EV(6)/ Sales(3)

EV(6)/ EBITDA(4)

P/E

189 1,630 21,400 3,881 6,526 530

12 28 736 9 317 42

10 20 658 6 283 34

27 34 874 20 434 103

1,628 3,962 4,729 21,693 13,874 1,770

(139) 354 1,849 1,927 1,541 457

NA 9% 39% 9% 11% 26% 19% 11%

(229) 297 1,598 772 1,059 (52)

NA 7% 34% 4% 8% NA 13% 8%

0.1 0.4 4.0 0.9 0.5 0.2 1.0 0.5

NA 5.0 10.1 9.8 4.2 0.6 5.9 5.0

NA 5.5 13.4 5.0 6.2 NA 7.5 5.8

April 30, 2012

Company Commercial ITES Services - US listed Exlservice Holdings, Inc. Genpact Ltd. WNS (Holdings) Ltd. Commercial ITES Services - US listed Mean Commercial ITES Services - US listed Median
Source: Company filings SEC filings, Company websites NYSE/NASDAQ - Website: www.nyse.com, www.nasdaq.com CapitalIQ, website: www.capitaliq.com

USD Million, except share price

Market Cap(1) Share price (2) 52 Wk Low 52 Wk High Net Sales(3) EBITDA
(4)

EBITDA Margin

Net Profit

(5)

Net Profit Margin

EV(6)/ Sales(3)

EV(6)/ EBITDA(4)

P/E

875 3,714 557

28 17 11

20 13 8

29 18 13

392 1,705 474

70 310 72

18% 18% 15% 17% 18%

35 187 13

9% 11% 3% 8% 9%

1.8 2.1 1.2 1.7 1.8

10.1 11.6 8.2 10.0 10.1

24.8 19.9 44.6 29.8 24.8

(1) Market Capitalization for Indian listed companies is in INR million and Market Capitalization for US listed companies is in USD million, based on closing Share Prices as of April 30, 2012 (2) Share Prices for Indian listed companies are in INR and share prices for US listed companies are in USD (3) Net sales and valuation multiples are based on TTM numbers for quarter ending March 2012 for India Listed Companies and US l isted companies. (4) EBITDA equals Earnings before Interest, Taxes, Depreciation and Amortization and excludes other income (5) Net profit is before minority interest and includes extra-ordinary items (6) Enterprise Value (EV) equals Market Cap plus Total debt, Minority Interest, Preference Shares minus Cash and Cash equivalent Total debt, Cash and cash equivalent for US listed companies are based on quarterly reports ending March 2012 Total debt, Cash and cash equivalent for India listed companies are based on annual reports dated March 31,2012 or latest available balance sheet.

HOV Services Ltds P/E and Allsec Technologies Ltds EV/EBITDA and P/E are indeterminate due to negative TTM net income and negative EBITDA quarters. WNS (Holdings) Ltds P/E is not meaningful due to negative net income in preceding quarters.

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