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Syntel (NASDAQ:SYNT)

Syntel (NASDAQ:SYNT). Investment Thesis. High-growth IT Services & Consulting company with more room to grow, still well-valued Performs better than competitors Focuses on two key industries Opening in portfolio for company in this sector after ACN sale. About Syntel.

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Syntel (NASDAQ:SYNT)

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  1. Syntel (NASDAQ:SYNT)

  2. Investment Thesis • High-growth IT Services & Consulting company with more room to grow, still well-valued • Performs better than competitors • Focuses on two key industries • Opening in portfolio for company in this sector after ACN sale

  3. About Syntel • Syntel provides IT services and outsourcing consulting • Focuses on banking & financial services companies and healthcare & life sciences companies • Current operations in U.S. and India • ~90% of revenues from NA • ~10% from Europe

  4. Evaluating Syntel • Provides a service • Proprietary information • Industry is deal-driven • Difficult to evaluate “product” • Look at the numbers • Compare Syntel’s numbers to its competitors • Look at its growth

  5. Competition • Infosys Technologies (NYSE:INFY) • Wipro (NYSE:WIT) • Cognizant (NASDAQ:CTSH) • iGATE (NASDAQ:IGTE)

  6. Syntel vs. competitors

  7. Recent growth • Q3 YoY • Revenue growth: 12.6% • Net Income growth: 15.4% • Q1-Q3 YoY • Revenue growth: 12.2% • Net Income growth: 13.1%

  8. Applications Outsourcing- Outsourcing software app development to a location where labor is less expensive Knowledge Process Outsourcing- Outsourcing research and information gathering (i.e. market research, R&D, IP research, etc.) E-Business- Providing technology services such as implementing and maintaining web solutions, data warehousing/business intelligence, enterprise application integration, business process management and enterprise resource planning solutions TeamSourcing- IT consulting services

  9. Syntel is poised for the future • Opening GDCs in Phillipines • Expanding business into Asia • Plenty of room for growth in Europe and Asia • Banks will account for half of the worldwide IT spending in 2014 (IDC) • Estimates put healthcare IT spending between 10-20% of total IT market with annual growth rates at 5-10% • SYNT has beat earnings estimates 19/20 most recent quarters

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