According to Luxoft, wage costs for qualified programmers are 75% lower in CEE (Central and Eastern Europe), than in the West. Wage inflation is around 6% in Russia and Ukraine, but they still have a huge cost advantage for many years to come. LXFT basically offers higher quality work than developers from India or Bangladesh, for a fraction of the cost in US or EU. Let's look at financials:
- profit growth of 20% for next 5 years, 10% for years 6-10, 2% thereafter
- discount rates of 6,7,8%
- 13% net profit margin