Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Equity Analyst with 15+ years of experience as a Buy Side analyst covering companies in the Emerging and Developed markets.
Fundamental and Quantitative analysis on companies in the Internet, Telecommunication, Media, Technology, IT Services, Healthcare, Pharmaceutical and other Industrial sectors.
Idea generation focussed on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Global Emerging Market Equities

Smartkarma Webinar | Indian IT Services: Picks and Pans

Indian IT Services: Is a Multi-Year Hyper-Growth Scenario Priced In?

Indian IT Services: Medium-Term Outlook Unattractive as Growth Slows, on Premium Valuation Levels

Indian IT Consulting Stocks Resuming Uptrends; Buy Tata Consultancy Svcs, Infosys, & Wipro

Tata Consultancy Share Buyback Offer - The Numbers Are Interesting

How Indian Buyback Offers Work - The Wipro Example

Thematic (Sector/Industry)

India It services / Thematic (Sector/Industry)

The earnings momentum behind the sector is currently extraordinarily strong, with all four companies reporting an acceleration in revenue growth rates, record operating margins and a continued strong medium-term demand outlook, driven by accelerated cloud adoption and digitalisation, across many verticals and geographies. These companies are also set to record strong y/y growth numbers over the next two quarters given the low base from last year’s pandemic-hit fiscal 4Q20 and 1Q21. However, following phenomenal share price performance from its March-2020 lows, this has been reflected in valuations as these companies now trade at record valuation multiples, on based on significantly upgraded earnings growth expectations. In this insight, after a brief overview of the recent reporting season and the outlook for the industry, I look at what long-term growth expectations are implied by current valuation levels, based on the Justified PE calculation. I also compare this to other high-quality Indian companies.

The earnings momentum behind the sector is currently extraordinarily strong, with all four companies reporting an acceleration in revenue growth rates, record operating margins and a continued strong medium-term demand outlook, driven by accelerated cloud adoption and digitalisation, across many verticals and geographies. These companies are also set to record strong y/y growth numbers over the next two quarters given the low base from last year’s pandemic-hit fiscal 4Q20 and 1Q21. However, following phenomenal share price performance from its March-2020 lows, this has been reflected in valuations as these companies now trade at record valuation multiples, on based on significantly upgraded earnings growth expectations. In this insight, after a brief overview of the recent reporting season and the outlook for the industry, I look at what long-term growth expectations are implied by current valuation levels, based on the Justified PE calculation. I also compare this to other high-quality Indian companies.

Indian IT Services: What Justified PE Ratios Tell Us About Sustainable Growth Expectations