EQUITY

RESEARCH
REPORT
PRESENTED BY -NITESH

0
 TABLE OF CONTENT

S. NO TOPIC PG NO

1 BUSINESS HISTORY 1-3

2 FINANCIAL ANALYSIS 4

3 SWOT ANALYSIS 5

4 INDUSTRY OVERVIEW 6-7

5 COMPETITIVE POSITIONING 8

6 DUPONT ANALYSIS 9-10

7 VALUATION 11-20

8 INVESTMENT RISK 21

9 FOOTBALL FIELD ANALYSIS 22

10 ANNEXURE – A 23-25

11 ANNEXURE – B 26-28

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 About Oracle
Oracle, founded in 1977 by Larry Ellison, Bob
Miner, and Ed Oates, started as Software
Development Laboratories. Initially focused on
database management, it introduced Oracle
Database in 1979. Over time, Oracle expanded
into cloud computing, enterprise software, and
hardware, becoming a global technology leader
in data management..

The Early Years (1977-1980)

In 1977, Larry Ellison, Bob Miner, and Ed Oates founded the company, using their
personal savings as startup capital, under the name Software Development
Laboratories (SDL). By 1979, the company rebranded as Relational Software Inc. (RSI)
and launched Oracle Version 2, the first commercially available SQL-based relational
database system. Interestingly, Oracle Version 1 was never released!

Growth and Expansion (1981-1990)

 1982: The company was renamed Oracle
Systems Corporation, aligning with its
primary database product.
 1983: Oracle Version 3 was introduced,
the first version capable of running on
multiple platforms, making it more
accessible to businesses using different
hardware.
 1986: Oracle went public with an IPO
price of $15 per share, raising significant
capital to support its expansion.
 1987: Oracle became the largest database management company in terms of
revenue, outpacing competitors and solidifying its industry leadership.

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Innovation and Acquisitions (1990-2000)
During the 1990s, Oracle expanded rapidly, becoming a leader in the relational database
market. In 1992, the company introduced Oracle7, a major upgrade that included features
like stored procedures and triggers. Oracle also embraced client-server architecture,
significantly improving performance. Oracle's innovation continued with the launch of
Oracle8 in 1997, adding support for object-oriented features and multimedia capabilities .
Throughout this decade, Oracle made strategic acquisitions to diversify its portfolio.
Notably, in 1999, Oracle acquired PeopleSoft, a leading provider of enterprise resource
planning (ERP) software, solidifying its position in the enterprise software market.
Key Acquisitions:

 Siebel Systems (2006, $5.8B) –

Strengthened CRM software.
 BEA Systems (2008, $8.5B) –
Enhanced enterprise infrastructure.
 Sun Microsystems (2010, $7.4B) –
Brought Java & Solaris under Oracle.
 NetSuite (2016, $9.3B) – Expanded
cloud offerings.
 Cerner (2021, $28.3B) – Oracle’s
largest acquisition, focusing on
healthcare tech.
Recent Developments (2020-2024)
:Expansion of Oracle Cloud Infrastructure (OCI)
: Strengthened its position in the cloud computing market.AI and Autonomous
Databases
: Introduced new AI-powered tools and further advanced autonomous database
technologies .Enhanced Fusion Cloud Applications (2022)
: Integrated more automation and machine learning features .Acquisition of
Cerner (2022)
: Expanded into healthcare technology, strengthening Oracle's presence in the
sector. Growth in Key Industries: Focused on expanding in healthcare and
financial services.

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Oracle: Business Overview & Key Offerings
Oracle provides a broad range of technology solutions, including databases (Oracle
Database, MySQL), cloud services (OCI, Autonomous Database), enterprise software
(ERP, HCM, SCM, CRM), middleware, and hardware.
Business Segments & Revenue Streams
 Cloud & Software Licensing: Includes
Oracle Cloud Infrastructure (OCI), SaaS,
PaaS, IaaS, and on-premise software licenses.
 Hardware Solutions: High-performance
servers, storage, and engineered systems with
maintenance and support services.
 Professional Services: Consulting, cloud
migration, and advanced customer support.
Oracle earns revenue through cloud subscriptions,
software licensing, hardware sales, and professional
services.

Competitive Strategy
 Acquisitions: Expanding via key
acquisitions (PeopleSoft, NetSuite, Sun
Microsystems).
 Cloud Transition: Migrating customers
from on-premises to cloud-based solutions.
 Partnerships: Collaborating with tech
providers and system integrators.
Significant investments in R&D, sales &
marketing, and cloud infrastructure ensure
continued growth and innovation. Oracle remains
a global leader in databases, cloud computing, and
enterprise software.

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 FINANCIAL ANALYSIS

REVENUE GROWTH
Revenue shows a steady increase from
$58,000 in 2025 to $71,000 in 2028,
reflecting consistent financial growth. The
highest growth occurs in 2026 (8.6%) and
2028 (7.6%), while 2027 sees a slower rise
(4.8%). This trend indicates strong business
performance and expansion, with a positive
financial outlook.

GROSS PROFIT (EBIT)

Gross profit rises from $18,000 in 2025 to
$25,000 in 2028, reflecting improving
profitability. Growth peaks in 2027
(15%), with steady increases in 2026
(11.1%) and 2028 (8.7%). This trend
indicates strong financial performance,
efficient revenue management, and cost
control.
NET INCOME
Net profit rises steadily from $19,928.69
in 2025 to $24,904.96 in 2028, driven by
strong financial growth. Peak growth
occurs in 2027 (10.6%), with steady
increases in 2026 (7.4%) and 2028 (5.2%).
This trend reflects strong profitability,
efficient cost management, and consistent
revenue expansion.

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 Strengths Weaknesses
 Diverse Product Portfolio – Oracle offers a  Reliance on Legacy Products – Oracle faces
wide range of enterprise software, cloud challenges in transitioning customers from
services, and hardware solutions, making it older, on-premise systems to modern cloud-
K a one-stop shop for businesses. based solutions.
and market influence.  High Costs – The initial investment for
 Financial Strength – The company has a Oracle’s enterprise software and hardware
solid financial foundation with consistent can be expensive, potentially deterring
revenue streams, allowing for continuous smaller businesses.
investment in innovation.  Complex Licensing Structure – Customers
 Cloud Innovation – Oracle is a leader in cloud often find Oracle’s licensing models difficult
infrastructure and services, staying ahead in to navigate, leading to frustration and
a rapidly evolving industry. dissatisfaction.
 Strong Brand Reputation – Known for  Dependence on Key Leadership – Changes
reliability and quality, Oracle has built a in executive leadership or key personnel
trusted brand that enterprises rely on for could impact Oracle’s performance and
mission-critical operations. strategic direction.

Opportunities Threats
 Expanding Cloud Market – With cloud  Fierce Competition – Oracle competes with
computing on the rise, Oracle has significant major tech giants like AWS, Microsoft, and
opportunities to grow its cloud services. Google, as well as smaller, agile players in the
 Surging Demand for Digital IT industry.
Transformation – Businesses are investing  Cybersecurity Risks – The rise of cyber
more in data management, analytics, and threats and data breaches poses a risk to
AI-driven solutions, creating a strong Oracle’s cloud infrastructure and customer
trust.
demand for Oracle’s expertise.
 Keeping Up with Technological Change –
 Strategic Acquisitions & Partnerships – To remain competitive, Oracle must
Oracle can strengthen its market position continuously innovate and adapt to evolving
through key acquisitions and collaborations customer needs and market trends.
with other tech players.
 Subscription-Based Revenue Growth – The
shift towards subscription-based pricing
models offers Oracle a steady and
predictable income stream.

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 INDUSTRY OVERVIEW
The software industry is a rapidly evolving sector dominated by major companies that
specialize in different areas of technology:
 Microsoft is a global leader with its Windows
operating system, Office Suite, and Azure
cloud platform. It has expanded into gaming
(Xbox) and is investing heavily in AI-
powered enterprise solutions.
 Oracle is best known for its database
management systems and cloud infrastructure
(OCI). It also provides enterprise software
such as ERP, HCM, and CRM, and is
expanding into autonomous databases and
healthcare technology.
 Adobe dominates the creative software industry with products like Photoshop,
Illustrator, and Premiere Pro. It also offers digital marketing and document
management solutions through Adobe Experience Cloud and Acrobat.
 IBM specializes in AI (Watson), enterprise software, cloud computing, and
consulting services. It continues to invest in emerging technologies such as quantum
computing and cybersecurity.
 SAP is a leading provider of enterprise resource planning (ERP) software, helping
businesses manage operations through cloud-based solutions like SAP S/4HANA.

Oracle’s Market Position

Cloud Computing Leader: Oracle is a major player in the cloud market, particularly with its
Oracle Cloud Infrastructure (OCI), competing with Amazon AWS, Microsoft Azure, and
Google Cloud.Database Dominance: Known for its robust relational database management
systems (RDBMS), Oracle remains a leader in enterprise database solutions Enterprise
Software: Oracle is a top provider of ERP, CRM, and HR software, with offerings like Oracle
Fusion Cloud Applications.Global Reach: Oracle serves a broad range of industries, including
finance, healthcare, retail, and government, and continues to grow its footprint in emerging
markets.AI and Automation Focus: The company is leveraging AI and autonomous
technologies to differentiate its products and
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enhance cloud offerings.
 Earnings Per Share (EPS) & Financial Performance
Trend Analysis:
 2020-2021: EPS increased
significantly from 3.16 to 4.67
(Basic) and 3.08 to 4.55
(Diluted), indicating strong
profitability growth.
 2022: EPS dropped sharply to
2.49 (Basic) and 2.41 (Diluted),
suggesting financial challenges.
Possible reasons could be lower
revenue, higher expenses, or
external economic factors.
 2023-2024: EPS started recovering, increasing to 3.15 (2023) and 3.82 (2024) for
Basic EPS. This indicates an improving financial performance but has not yet
reached the peak levels of 2021.
Basic vs. Diluted EPS Comparison:

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 COMPETITIVE POSITIONING
Oracle operates in a highly competitive technology industry, particularly in enterprise
software and cloud services. Analyzing its position through Porter’s Five Forces provides
insights into its market strengths and challenges.

 Threat of New Entrants – Low High costs, technical expertise, and Oracle’s strong
brand make it hard for new companies to compete.
 Supplier Power – Moderate Oracle depends on tech suppliers but reduces risk
through partnerships and a diverse supply chain.
 Buyer Power – Moderate to High Large enterprises negotiate pricing, but Oracle’s
integrated software and high switching costs keep customers loyal.
 Competitive Rivalry – High Strong competition from Microsoft, AWS, and Google
Cloud pushes Oracle to invest in R&D and acquisitions.
 Threat of Substitutes – Moderate Alternatives like open-source software exist, but
Oracle’s security, integration, and support add unique value.

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 DUPONT SUMMARY
 Return on Equity (ROE
Sharehol
Fiscal Net
2021: Achieved a robust ROE of 230.95%, reflecting ders'
Year Income ROE (%)
effective utilization of shareholder equity.​MLQ Equity
Ending (USD)
(USD)
2022: Encountered negative shareholders' equity,
May 31, $10.47 $8.70
making ROE calculation 120.27
unfeasible.​Macrotrends+4MLQ+4Stock Data 2024 billion billion
Online+4 May 31, $8.50 $1.07
792.54
2023 billion billion
2023: Experienced a significant surge in ROE to May 31, $6.72 -$6.22
792.54%, possibly due to financial restructuring or N/A
2022 billion billion
exceptional earnings.​Stock Data Online May 31, $13.75 $5.95
230.95
2021 billion billion
2024: Normalized to a strong ROE of 120.27%,
indicating sustained profitability and efficient equity
management.​MLQ+2Stock Data Online+2Stock
Data Online+2

These fluctuations highlight Oracle's dynamic

financial performance, influenced by strategic
decisions and market conditions during this period.
Summary of ROA (2020–
2024):

Oracle’s Return on Assets (ROA) shows how effectively the company used its assets to generate profit over the past five
years:

2020–2021: Oracle saw a strong increase in ROA, peaking at 10.48% in 2021. This indicates efficient use of assets during this period, possibly due to strong software and cloud business
• performance.

• 2022: ROA dropped sharply to 6.15%, likely due to increased investment or lower net income. This could reflect economic conditions, increased R&D spending, or acquisition impacts.

• 2023–2024: ROA gradually improved to 7.42% by 2024, suggesting recovery in profitability and better asset utilization.

Conclusion: While Oracle’s ROA dipped in 2022, the company showed signs of recovery. The overall trend reflects Oracle’s ongoing transformation into a cloud-first business and its ability to regain profitability over
time.
 VALUATION
Beta (β) Interpretation:
 Measures stock volatility relative to
the market (S&P 500).
 Applovin (β = 2.48) is the
most volatile, while Oracle (β =
0.86) and service now (β = 1.21)
are relatively stable.
 Higher beta stocks (Servicenow,
Adobe, Palantir) are riskier but
offer higher potential returns.

R-Square (R²) Interpretation:

 All stocks have R² = 0.35,
meaning only 35% of price Companies Beta R Sq
movement is explained by the Microsoft corporation 0.97 0.55
market. Oracle corporation 0.86 0.32
 65% of the stock movement is
Servicenow Inc. 1.21 0.41
influenced by company-specific
Palantir 2.08 0.20
factors, so investors should
Applovin 2.48 0.24
analyze fundamentals beyond
market trends. S&P 1 1

Investment Implications:
 High Beta Stocks (Palantir,
Servicenow, Adobe): Suitable
for aggressive investors looking for high returns but with higher risk.
 Moderate Beta Stocks (Oracle, S e r v i c e n o w ): Better for those seeking
growth with controlled risk.
 Low R²: Market movements alone don’t strongly predict these stock
performances—company and industry analysis are essential.

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DCF Interpretation

The DCF method measures the

intrinsic value of Oracle Corporation
by predicting the future cash flows in
relation to growth and profitability.
This model is formulated by
combining historical performance
data provided by the company and
combining it with the industry
outlook and competitive assessment
of Oracle Corporation.
The model uses Unlevered cash flow
which is the cash available for both
equity and debt holders, it is derived
by using the following formula:
EBIT (Earnings Before Interest &
Tax)
LESS: Tax
NOPAT (Net Operating Profit
after Tax)
ADD: Depreciation & Amortization
LESS: Change in Working Capital
LESS: CAPEX

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FREE CASH FLOW TO THE FIRM
Every company needs to ensure its investments generate returns that satisfy both
shareholders (equity investors) and lenders (debt holders). The company’s Weighted
Average Cost of Capital (WACC) is 7%, meaning any project or investment should
earn at least this return to create value.

Cost of Equity – What Shareholders Expect

Shareholders expect a return on their investment based on how risky the company is. This
is measured using Beta, which shows how much the company’s stock moves compared to
the overall market:
Rating mathod
 Higher Risk : Shareholders expect a
Risk free rate 4.27%
return of 8.21%. Bottom beta 0.86
ERP 4.60%
 Lower Risk : Shareholders expect a cost of equity (Re) 8.21%
return of 5.54%.
Since shareholders invest their money in the business,
the company must aim for returns at least equal to or Debt% 31.39%
Equity% 68.61%
higher than the cost of equity; otherwise, investors DFl 1.36
might look for better opportunities elsewhere. Bottom up beta 1.53

Cost of Debt – The Price of Borrowing

 The company’s borrowing rate before tax is 3.70%.
 After tax (income tax rate: 8.02%), the actual
re 8.21%
cost of debt is 5.54%. rd 5.54%
 Debt is often cheaper than equity because tax rate 21.00%
interest payments reduce the company’s taxable Wd 31%
income. We 69%
WACC=Wd*Rd*(1-t)+We*Re 7.00%
 However, too much debt increases financial risk,
so the company needs to maintain a healthy
balance.

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Capital Structure – Equity vs. Debt WACC

 Equity Financing (50%) – The company re 8.21%

raises equal of its funds from investors. rd 5.54%
tax rate 21.00%
 Debt Financing (50%) – A Equal portion Wd 50%
We 50%
comes from borrowing.
WACC=Wd*Rd*(1-t)+We*Re 6.30%
By relying o n b o t h the company
avoids excessive debt and financial risk, but
it must deliver strong returns to keep
shareholders satisfied.

Key Takeaways for the Business

 Since WACC is 7%, the company

must ensure all investments and
projects generate a return higher than
this.
 With low-cost debt (3.40%),
borrowing is affordable, but the
company prefers to rely on equity.
 Shareholders expect returns between
7.35% and 10.32%, so the company
must focus on growth and
profitability to meet their
expectations.
By managing its cost of capital wisely, the company can balance risk, attract investors,
and ensure long-term financial stability.

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 Gordan Growth Model
The Gordon Growth Model (GGM) is used to estimate the intrinsic value of a
company based on Discounted Cash Flow (DCF) analysis. This valuation considers
the company's WACC (Weighted Average Cost of Capital), growth rate, and terminal
value to determine its per-share value.

Key Insights from the Valuation:

Gordon Growth
1. WACC (7%) and Long-
Term Growth Rate (2.50%) Formula fcff(1+g)/(r-g)
Terminal value 478703
o WACC (7%) Present value of terminal value 379160
Operating enterprise value 453742
represents the company’s Marketable securies /short term
average cost of capital investment 370
(debt + equity). Other non-current assets 18681
Total EV 472793
o The company is assumed
to grow indefinitely at a Actual years
2.50% long-term growth Debt & Debt e.(long term +short tern) 88624
rate. NCI( non controlling interest ) 490
Cash 10,941
2. Terminal Value and Present Market Value 394620
Outstanding shares assuming dilutions 2869
Value of Terminal Value
DCF Value per share 137.55
o Terminal Value
(316,102): Represents the
value of all future cash flows beyond the forecast period.
o Present Value of Terminal Value (232,567): The discounted value of the
terminal value using WACC.

3. Enterprise and Firm Value Calculation

o DCF Value of Firm (304,377): The present value of all expected future cash
flows of the business.
o Total Firm Value (323,428): Includes non-operating assets (19,051) like
investments, real estate, or other holdings.

4.
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 5. Equity Value Calculation
o Debt Adjustment: The firm’s total gross debt (88,624) is subtracted.
o Cash (10,941) is added back, as it represents liquid assets.
o Non-controlling interest (490) is deducted to reflect the actual equity owned
by common shareholders.
o DCF Value of Common Equity = 245,255, representing the total market value
of equity.

6. DCF Value Per Share (137.5)

o The equity value is divided by the number of outstanding shares (2,869) to
arrive at the DCF-based intrinsic value per share: ₹137.5
o If the company’s current market price per share is below ₹137.5, it may be
undervalued and a potential investment opportunity.
o If the market price is above ₹137.5, it may be overvalued, meaning the stock
might be expensive.
Recommendation
Since the CMP (₹169) is much higher than the fair value (₹137.5), it is a SELL
recommendation unless strong future growth justifies the premium valuation.

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Exit Multiple Model
The Exit Multiple Model is a way to estimate a company’s value based on its future
earnings and market conditions. It applies an exit multiple (like EV/EBITDA) to predict
how much the company will be worth at the end of a forecast period.
Exit Multiple
Key Factors in Valuation
EV/EBIT 16.4
Terminal value 402050
1. WACC (7%) Present value of terminal
a. The company’s value 318446
Weighted Operating enterprise value 393028
Average Cost of Marketable securies /short
term investment 370
Capital (WACC)
Other non-current assets 18681
is 7%, Total EV 412079
representing the
minimum return
required by both Debt & Debt e.(long term
debt and equity +short tern) 88624
NCI( non controlling
investors. interest ) 490
2. Exit Multiple Cash 10,941
Approach for Market Value 333906
Outstanding shares
Terminal Value assuming dilutions 2869

a. LTM EV/EBIT (16.4): The company’sDCF

lastValue
twelve months (LTM) enterprise116.38
per share
value to EBIT multiple.
b. Terminal EBITDA : The projected EBITDA used to estimate the
company’s final value at the end of the forecast period.
c. Terminal Value (402,050): The value of the company at the end of the
projection period based on the industry multiple.
d. Present Value of Terminal Value (325813): The discounted value of the
terminal value using WACC.
3. Enterprise and Firm Value Calculation
a. DCF Value of Firm : Represents the total value of the company’s operating
business.

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 b. Total Firm Value (386,663): Includes non-operating assets (19,051), such as
investments or real estate.
4. Equity Value Calculation
a. Debt Adjustment: Gross debt (88,624) is subtracted from the total value.
b. Cash (10,941) is added back, as it represents liquid assets.
c. Non-controlling interest (490) is deducted, representing minority ownership
that doesn’t belong to common shareholders.
d. DCF Value of Common Equity = 308,490, representing the total market value
of equity.
5. 5.DCF Value Per Share (₹119)
a. The equity value is divided by the number of outstanding shares (2,869) to
arrive at the DCF-based intrinsic value per share: ₹116.
b. If the company’s current market price (CMP) is ₹169, then the stock is trading
above its fair value, indicating potential overvaluation.
6. Buy/Sell Recommendation
 Intrinsic Value (DCF-Based) = ₹116
 Current Market Price (CMP) = ₹169
Recommendation-Sell
Since the current price (₹169) is much higher than the fair value (₹116), it is a SELL
recommendation unless strong growth justifies the premium valuation.

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Relative valuation Method
Relative Valuation Summary & Investment
Recommendations
The Relative Valuation Method compares
Oracle Corporation’s stock price to similar firms
using key financial ratios instead of intrinsic
valuation models like Discounted Cash Flow
(DCF). Below are the valuation results with
corresponding buy/sell recommendations:
As of 2024, Oracle's relative valuation is strong,
with a solid position in cloud computing, databases,
and enterprise software. The company’s consistent
revenue growth, coupled with its innovative
autonomous database and AI-driven solutions,
makes it an attractive investment. Compared to its
peers, Oracle’s price-to-earnings (P/E) ratio
remains competitive, suggesting potential
undervaluation. The acquisition of Cerner enhances
its healthcare tech offerings, expanding its market
reach. With strong cash flow, a stable dividend, and
a growing cloud infrastructure, Oracle is well-
positioned for continued growth. Investment
Recommendation: "Buy", suitable for long-term
investors seeking growth in the tech and cloud
sectors.
• Final Investment Recommendation for Oracle (2024):

• Growth-Oriented Investors (BUY):

• Valuation indicators suggest potential upside. Oracle's strong performance in
cloud, AI, and innovation could drive further growth. For investors focused on
long-term gains, buying at the current price is reasonable.

• Conservative Investors (SELL):

• Valuation metrics suggest that Oracle might be overvalued based on profitability
and revenue. Selling now could help lock in profits and reduce exposure to
potential downside if growth expectations aren’t met.

• Balanced Approach (HOLD & MONITOR):

• If uncertain, consider holding Oracle and monitoring its performance. Watch for
key price movements that may indicate whether the stock has further upside or if
it poses overvaluation risks

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 INVESTMENT RISK

Oracle Corporation: Business Overview

Oracle Corporation is a global
technology leader with strong
revenue and profit growth. It
thrives on key strengths:
 Diverse Products – Offers
essential solutions like
Oracle Database and Cloud
Infrastructure.
 Strong Reputation – A
trusted brand with high
customer loyalty.
 Global Reach – Operates
worldwide with strategic
partnerships.
 Innovation & Investment – Advances in AI, ML, and acquisitions drive growth.
 Financial Stability – Steady revenue from cloud services and strong cash flow.
Growth Opportunity: Oracle can enhance its cloud offerings with AI/ML platforms for
industries like healthcare, finance, and retail, driving customer acquisition and revenue
growth.
Potential Risks:
 Market & Competition – Economic downturns and rivalry from Microsoft, AWS,
SAP, and Salesforce.
 Operational & Financial – Innovation challenges, integration costs, and high debt
reliance.
 Regulatory & Geopolitical – Compliance costs, legal risks, and global instability.
 Technological & Cybersecurity – Cloud transition risks and security threats.
By leveraging strengths and addressing risks, Oracle can reinforce its position as a top tech
company.
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 FOOTBALL FIELD ANALYSIS

A football field analysis is a visual tool used in finance to compare a company's

valuation across multiple methodologies, providing a comprehensive view of its
potential market value. It presents valuation ranges derived from different approaches
side by side, allowing for easy comparison and a holistic assessment.
The football field analysis provides a valuation range for the stock using multiple
valuation methods, including Perpetual Growth, Exit Multiple, Comparable
Company Analysis (CCA), Market Consensus, and 52-Week Trading Range.
 The lower end of the valuation is 68, while the higher end is 227.
 The Unaffected Price (current market price) is 172, which is at the lower
boundary of the valuation range.
 Some valuation methods (CCA, Market Consensus) suggest a potential upside
up to 239, indicating that the stock may be undervalued at its current price.
Recommendation – Should We Sell the Stock?
Since the stock is currently priced at 68, and multiple valuation methods suggest a
potential higher value (up to 227), the stock price of 172 significantly exceeds the
perpetual growth valuation range (68-112), indicating overvaluation. Selling now
secures profits and mitigates downside risk.

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 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31 may
may 2020 may 2021 may 2022 may 2023 may 2024 may 2025 may 2026 may 2027 2028
revenue information

Actual Actual Actual Actual Actual Estimation Estimation Estimation Estimation

Total revenues 39,068 40,479 42,440 49,954 52,961 56,754 60,910 65,467 70,460

Operating expenses:
Cloud services and license support 4,006 4,353 5,213 7,763 9,427 7563 8117 8724 9390
Hardwar
e 1,116 972 972 1,040 891 1284 1378 1481 1594
Services 2,816 2,530 2,692 4,761 4,825 4363 4683 5033 5417
Depreciation 1,382 1,537 1,972 2,526 3,129 2452 2631 2828 3044
Sales and marketing 6,712 6,145 6075 6307 5145 7834 8408 9036 9726
research and development 6,067 6,527 7,219 8,623 8,915 9394 10082 10836 11662
General and administrative 1,181 1,254 1317 1579 1548 1738 1865 2004 2157
Amortization of intangible assets 1,586 1,379 1,150 3582 3,010 2303 1639 672 635
Acquisition related and other 56 138 4713 190 314 1426 1530 1645 1770
restructuring 250 431 191 490 404 443 475 510 549
Total operating expenses 25,172 25,266 31,514 36,861 37,608 38,799 40,808 42,771 45,945

Operating income(ebit) 13,896 15,213 10,926 13,093 15,353 17,955 20,103 22,696 24,515

Interest expense -1,995 -2,496 -2,755 -3505 -3,514 3711 3174 3174 3048
Non-operating income, net 162 282 -522 -462 -98
Income before benefit from (provision for) income taxes 12,063 12,999 7,649 9,126 11,741 21,666 23,277 25,870 27,563

Benefit from (provision for) income taxes -1,928 747 -932 -623 -1274 -1738 -1867 -2075 -2210
Net income 10,135 13,746 6,717 8,503 10,467 19,929 21,410 23,795 25,353

Cloud services and license support 10.25% 10.75% 12.28% 15.54% 17.80% 13.33% 13.33% 13.33% 13.33%
Hardwar
e 2.86% 2.40% 2.29% 2.08% 1.68% 2.26% 2.26% 2.26% 2.26%
Services 7.21% 6.25% 6.34% 9.53% 9.11% 7.69% 7.69% 7.69% 7.69%
Sales and marketing 17.18% 15.18% 14.31% 12.63% 9.71% 13.80% 13.80% 13.80% 13.80%
research and development 15.53% 16.12% 17.01% 17.26% 16.83% 16.55% 16.55% 16.55% 16.55%
General and administrative 3.02% 3.10% 3.10% 3.16% 2.92% 3.06% 3.06% 3.06% 3.06%
Amortization of intangible assets 4.06% 3.41% 2.71% 7.17% 5.68% 4.61% 4.61% 4.61% 4.61%
Acquisition related and other 0.14% 0.34% 11.11% 0.38% 0.59% 2.51% 2.51% 2.51% 2.51%
restructuring 0.64% 1.06% 0.45% 0.98% 0.76% 0.78% 0.78% 0.78% 0.78%

Income before benefit from (provision for) income taxes(tax

rate) -15.98% 5.75% -12.18% -6.83% -10.85% -8.02% -8.02% -8.02% -8.02%

dividend per share (1) 1.0 1.1 1.3 1.4 1.6

dividend payout ratio(3) 30% 22% 51% 43% 42% 38% 38% 0.38 0.38
outstanding share 3,067 2,814 2,665 2,713 2,755 2,755 2,755 2,755 2,755
EPS(2) 3.30 4.88 2.52 3.13 3.80

dividend paid(4) 3,070 3,063 3,457 3,668 4,391 7538 8099 9001 9590
DPR 30% 22% 51% 43% 42% 38% 38%

Balance transferred to Reserves(retained earnng ) 12,391 13,312 14,795 15,763

this alldo calculate separately dep and amorzization amount in oracle already
sepate given
Depreciation & Amortization 6,712 6,145 6,075 6,307 5,145 (
Dep 5,126 4,766 4,925 2,725 2,135

(historical amount is taken from 10k amortization table only when

amrti. Isnot given so seprate calculate but in oracle already
Amor 1,586 1,379 1,150 3582 3,010 separate give so no need to calculate
 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31 12 months 31
Balance sheet
may 2020 may 2021 may 2022 may 2023 may 2024 may 2025 may 2026 may 2027 may 2028
Actual Actual Actual Actual Actual Estimation Estimation Estimation Estimation
ASSETS
Current assets:
Cash and cash equivalent 37239 30098 21,383 9765 10454 30688 42776 54163 66345
Marketable securies 5818 16456 519 422 207 207 207 207 207
Trade receivables, 5551 5409 5953 6915 7874 7980 8565 9206 9908
Prepaid expenses and other current assets 3532 3604 3778 3902 4019 4795 5146 5531 5953
Total current assets 52140 55567 31633 21004 22554 43671 56695 69107 82413

Non-current assets:
Property, plant and equipment, net 6244 7049 9716 17069 21536 13,170 14,134 15,192 16,351
Intangible assets, net 3738 2430 1440 9837 6890 4,587 2,948 2,276 1,641
Goodwill, net 43769 43935 43811 62261 62230 62230 62230 62230 62230
Deferred tax assets 3252 13636 12782 12226 12273 12273 12273 12273 12273
Other non-current assets 6295 8490 9915 11987 15493 15493 15493 15493 15493
Total non-current assets 63298 75540 77664 113380 118422 107753 107078 107464 107988

Total Asset 115438 131107 109297 134384 140976 151424.0189 163773.1738 176570.4363 190400.3914

Liability
Current liabilies:
Notes payable, current 2371 8250 3749 4061 10605 1072 2118 2065 0
Accounts payable 637 745 1317 1204 2357 1500 1610 1731 1863
Accrued compensaon and related benets 1453 2017 1944 2053 1916 1916 1916 1916 1916
Deferred revenues 8002 8775 8357 8970 9313 9313 9313 9313 9313
Other current liabilies 4737 4377 4144 6802 7353 7353 7353 7353 7353
Total current liabilies 17200 24164 19511 23090 31544 21155 22310 22378 20445

Non-current liabilies:
Notes payable and other borrowings, non-current 69226 75995 72110 86420 76264 84711 82593 80528 80528
Income taxes payable 12463 12345 12210 11077 10817 10817 10817 10817 10817
Deferred tax liabilies 0 7864 6031 5772 3692 3692 3692 3692 3692
Other non-current liabilies 3832 4787 5203 6469 9420 9420 9420 9420 9420
Total non-current liabilies 85521 100991 95554 109738 100193 108640 106522 104457 104457

Total Liability 102721 125155 115065 132828 131737 129795 128832 126835 124902

Commitments and conngencies

Oracle Corporaon stockholders' (decit) equity:
Preferred stock, 0 0 0 0 0 0 0 0 0
Common stock, 26486 26533 26808 30215 32764 32764 32764 32764 32764
Accumulated decit -12696 -20120 -31336 -27620 -22628 -10,237 3,074 17,869 33,631
Accumulated other comprehensive loss -1716 -1175 -1692 -1522 -1432 -1432 -1432 -1432 -1432
Total Oracle Corporaon stockholders' (decit) equity 12074 5238 -6220 1073 8704 21095 34406 49201 64963

Noncontrolling interests 643 714 452 483 535 535 535 535 535
Total stockholders' (decit) equity 12717 5952 -5768 1556 9239 21630 34941 49736 65498

Total liabilies and stockholders' (decit) equity 115438 131107 109297 134384 140976 151424 163773 176570 190400

Checksum 0 0 0 0 0 0 0 0 0

Prepaid expenses and other current assets 3532 3604 3778 3902 4019 4795 5146 5531 5953
revenue 39,068 40,479 42,440 49,954 52,961 56,754 60,910 65,467 70,460
% of revenue 9% 9% 9% 8% 8% 8% 8% 8% 8%

revenue 39,068 40,479 42,440 49,954 52,961 56,754 60,910 65,467 70,460
trade recivable 5551 5409 5953 6915 7874 7980 8565 9206 9908

historical ARTR 7.04 7.48 7.13 7.22 6.73

HITORICAL DSO 52 49 51 51 54 51 51 51 51
ORACLE 12 months 31 may 12 months 31 may 12 months 31 may 12 months 31 may 2028
2025 2026 2027

(in USD million except per Share Data)

Cash Flow Statement

Cash From Operating Activities

Net Income 19,929 21,410 23,795 25,353
Depreciation and amortization 4755 4270 3500 3679
Share-based compensation expense 0 0 0 0
Change in assets and liabilities:
Trade accounts receivable
-106 -585 -641 -702
Inventories
Prepaid expenses and other current assets -776 -351 -385 -422
Accounts payable and accrued expenses -857 110 120 132

Net Cash Provided by Operating Activities 22,944 24,855 26,390 28,039

Cash From Investing Activities

Capital Expenditure( capex) 5914 -3596 -3885 -4203

Net Cash Used for Investing Activities 5914 -3596 -3885 -4203

Cash From Financing Activities

Cash dividends paid -7538 -8099 -9001 -9590
Cash before Raising (Repayment) of Debt

Debt Raised
Debt Repaid -1086 -1072 -2118 -2065

Net Cash Provided by/(Used for) Financing Activities -8624 -9171 -11119 -11655

Net Increase/(Decrease) in Cash and Cash Equivalents 20234 12088 11386 12182
Cash and Cash Equivalents, Beginning of Year 10,454 30,688 42,776 54,163
Cash and Cash Equivalents, End of Period 30,688 42,776 54,163 66,345
 Annexure: B

 BETA

Degree Of Financial
Leverage unlever beta=reg beta/dfl

Debt% 31.39% 1.27 0.76

Equity% 68.61% 1.19 1.02

DFl 1.36 1.04 2.01

Bottom up beta 1.53 3.58 0.69

Average

1.12

COMPANIES Debt Equity Debt% Equity% Companies Beta Debt Equity

Microsoft
Microsoft corporation 91159 268477 25.35% 74.65% corporation 0.97 25.35% 74.65%

Servicenow Inc. 2278 9609 19.16% 80.84% Servicenow Inc. 1.21 19.16% 80.84%

PALANTIR 239.22 5094 4.49% 95.51% Palantir 2.08 4.49% 95.51%

Applovin 3556.41 1089.82 76.54% 23.46% Applovin 2.48 76.54% 23.46%

Industry Median 31.39% 68.61%

GORDON GROWTH GROWTH RATE
137.55 1.5% 2.00% 2.50% 3.00% 3.50% 4.00%
7.32% 105.4968 115.4585 127.486937 142.2998 160.9903 185.3105
8.32% 87.68742 94.68299 102.880548 112.619 124.3779 138.8587

WACC 9.32% 74.43282 79.58337 85.4891319 92.32935 100.3449 109.867

10.32% 64.18368 68.11297 72.54474 77.58194 83.35773 90.04741
11.32% 56.02175 59.10354 62.534732 66.37833 70.71343 75.64076
12.32% 49.36829 51.83962 54.5626176 57.57778 60.9348 64.6953

EXIT MULTIPLE GROWTH RATE

116.38 12.4 14.4 16.4 18.4 20.4 22.4
7.32% 88.32687 101.726 115.125139 128.5243 141.9234 155.3225
8.32% 85.29381 98.27173 111.249645 124.2276 137.2055 150.1834

WACC 9.32% 82.3792 94.95283 107.526462 120.1001 132.6737 145.2474

10.32% 79.57733 91.76278 103.948235 116.1337 128.3191 140.5046
11.32% 76.88283 88.69543 100.508028 112.3206 124.1332 135.9458
12.32% 74.29062 85.74496 97.1992961 108.6536 120.108 131.5623
 Trading Comparable

Name of Target Company Oracle Median 1 Median 1

25th Percentile 2
Industry Multiple Range Implied EV-Oracle Minority Debt Cash & Cash Implied Equity-Oracle Implied Per Share Value-Oracle 75th Percentile 3
Metrics Lower Higher Lower Higher Interest Total Debt Equivalent Eq Investments Lower Higher Diluted Shares O/S Lower Higher
10% 10%
LTM EV/EBITDA 37,608 18.4x 22.5x 6,91,999 8,45,777 13746 88624 0 10,941 19051 6,19,621 7,73,399 2959.7 209.4 261.3
FY1 EV/EBITDA 37,608 16.9x 20.7x 6,37,058 7,78,627 13746 88624 0 10,941 19051 5,64,680 7,06,249 2959.7 190.8 238.6
FY2 EV/EBITDA 37,608 15.1x 18.4x 5,66,536 6,92,432 13748 88624 0 10,941 19051 4,94,156 6,20,052 2959.7 167.0 209.5

Oracle Valuation Range as per Trading Comps 190.8 238.6

Industry Multiple Range Implied EV-Oracle Minority Debt Cash & Cash Implied Equity-Oracle Implied Per Share Value-Oracle
Metrics Lower Higher Lower Higher Interest Total Debt Equivalent Eq Investments Lower Higher Diluted Shares O/S Lower Higher
10% 10%
LTM EV/EBIT 15,353 20.5x 25.0x 3,14,185 3,84,004 13746 88624 0 10941 19051 2,41,807 3,11,626 2959.7 81.7 105.3
FY1 EV/EBIT 15,353 18.6x 22.7x 2,84,950 3,48,272 13746 88624 0 10941 19051 2,12,572 2,75,894 2959.7 71.8 93.2
FY2 EV/EBIT 15,353 16.1x 19.7x 2,47,496 3,02,495 13748 88624 0 10941 19051 1,75,116 2,30,115 2959.7 59.2 77.7

Oracle Valuation Range as per Trading Comps 71.8 93.2

Industry Multiple Range Implied EV-Oracle Minority Debt Cash & Cash Implied Equity-Oracle Implied Per Share Value-Oracle
Metrics Lower Higher Lower Higher Interest Total Debt Equivalent Eq Investments Lower Higher Diluted Shares O/S Lower Higher
10% 10%
LTM EV/Sales 52,961 7.3x 8.9x 3,86,642.86 4,72,563.50 13746 88624 0 10941 19051 3,14,265 4,00,186 2959.7 106.2 135.2
FY1 EV/Sales 52,961 6.6x 8.1x 3,51,978.86 4,30,196.38 13746 88624 0 10941 19051 2,79,601 3,57,818 2959.7 94.5 120.9
FY2 EV/Sales 52,961 5.9x 7.2x 3,12,828.84 3,82,346.36 13748 88624 0 10941 19051 2,40,449 3,09,966 2959.7 81.2 104.7

Oracle Valuation Range as per Trading Comps 94.5 120.9

Industry Multiple Range Implied Per Share Value-Oracle

Metrics Lower Higher Lower Higher
10% 10%
FY1 P/E 4.57 207.3x 253.4x 947.6 1,158.2
FY2 P/E 5.25 139.5x 170.5x 732.1 894.8

Oracle Valuation Range as per Trading Comps 839.9 1,026.5

Calculation of Diluted Shares-Adobe

Basic Shares o/s 2,797.0

Diluted Shares o/s 2959.7

Oracle 169.6
ESoPS/Warrants etc. Treasury Stock Method
Exercise Notional Net
O/S Price ITM? Shares Issued Cash Buyback Dilution
35.0 49.8 Yes 35.0 1,742 10.3 24.7
138.0 Yes 138.0 - - 138.0
162.7

Oracle 2024 2025 2026 2026

Sales 52,961 52,961 52,961 52,961
EBITDA 37,608 37,608 37,608 37,608
EBIT 15,353 15,353 15,353 15,353