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Company Analysis

Company Analysis

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Published by: luckybhumkar on Nov 19, 2009
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03/16/2013

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Cost structure is one of the important parameters for the analyst while doing the analysis of any company.
Cost structure differs for all companies even though they belong to one industry. In Automobile industry for
example, if the analyst takes Tata Motors and Maruti Udyog Limitd, he will find their percentage of fuel cost
differ.

As per the Indian Accounting Standards, if any cost as a percentage of sales is more than 10%, company is
liable to show such expenditure differently. Analyst has to take care of such costs.

Style and Font Size – Garamond 11
Format – Each point shall be discussed in separate paragraphs along with sub heads.
Chart – pie chart

Study material on Company Analysis

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17

Example of business model – Services

Value Proposition:
Company defines, designs, and deliver technology enabled business solutions to companies established across the
globe. Company aims at adding value to client’s business by providing strategic differentiation and operational
superiority through various technological solutions. Company follows the Global Delivery Model (GDM) to
ensure distribution of its products and services in timely and cost effective manner.

Target Customers: Considering the company’s global footprint and its ability and experience to serve
clients spread across different segments, company is in a position to target various IT deals. However companies
belonging to sectors like BFSI, Telecom, Construction and Retail still remain its primary target as these are
technology dependent sectors. Also deal size in these sectors tends to be big and spread over multi-years,
providing enough clarity about future revenue stream.

Distribution Channel: Company’s Global Delivery Model (GDM) approach enables it to stay in touch
with its customers through out the execution of project. GDM gives 24 hours execution capabilities across
multiple time zones. Through its consulting groups and Software Engineering and Technological Labs
(SETLabs), company research and engineer new solutions tailored for its client and their industries. Also it uses
its end-to-end technological based solutions to extend the network of its relationship both with existing clients as
well as new clients.

Customer Retention: Through its project management methodology, company ensures timely, consistent
and accurate delivery of superior quality solutions to maintain high level of client satisfaction. Its ability to serve
entire software life cycle and strong domain expertise helps it to gain increased business from its existing client.
As a result, company has a history of client retention and derives a significant proportion of revenue from repeat
clients.

Revenue Stream: Company gets it revenue directly from its clients on the basis of type of contract entered
into. Arrangements with customers for software development and related service are either on fixed-price, fixed-
timeframe or on a time-and-material basis.
Core Capabilities: The core strength of company is its highly skilled and well trained professionals.
Company provides specialised technical and domain training to its employees. At its Mysore campus it has
capacity of around 33,500 trainees. Company has 15 Global Development Centers (GDC) and 28 marketing
offices located across the world... Further it has five subsidiaries in five different countries. It has also established
Software Engineering and Technological Labs (SETLabs) in India. SETLabs leverages emerging technologies for

Study material on Company Analysis

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18

improving engineering effectiveness and developing client-focused business solutions. Finacle, its universal
banking solution powers 109 banks across 60 countries. It is considered among the leaders in global evaluation of
retail core banking solutions.Company currently has two patents granted by US Patent and Trademark office. An
aggregate of 151 applications are pending in US Patent and Trademark office and Indian Patent office.

Value Configuration: SET Labs conducted 12 Innovation Workshops with customers from the US
and Australia, to identify research collaboration possibilities. SET Labs collaborated with leading national and
international universities such as the Indian Institute of Information Technology, Hyderabad, Purdue
University, University of Southern California, and Queensland University of Technology. Researchers from
BT Group PLC and SETLabs will also collaborate on research and innovation. A Memorandum of
Understanding (MoU) has been signed to this effect.

Partners Network: Some of the partners getting business from the company are transport service
provider, hotels, Airlines companies and canteen service providers. Company also entered in partnership with
global business firms and institutions to innovate and provide latest technological business solutions. Some of
the recent partnerships company entered in to are:
1. Alliance with Microsoft focusing on Supply Chain visibility and collaboration.
2. The University of Cambridge and Infosys has signed an agreement to undertake research in engineering,
management and business, architecture and pharma.

Cost structure: The major element of overall cost is salary expenses (72.7% of total expenses) under
different departments like software development and maintenance, selling and marketing and administration.
Company has taken various cost management measures like; increase in offshore efforts(76.9% vs 76%
QoQ), try to increase utilization rates(74.5% vs 73.7% QoQ), slow down in hirings (Net hiring in JFM09
2772 Vs OND08 5927), low number of trainees (7709 Vs 8119 QoQ), cutting in support activities.

Study material on Company Analysis

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