X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
One of India's managed companies - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jan 29, 1999

    One of India's managed companies

    Background

    • Infosys Technologies Limited, was established in 1981, when eight software professionals quit their regular jobs and pooled a capital of Rs 10,000. Six of the eight pioneers now form part of the top management. Infosys' management has always been pro-active as far as keeping pace with technology is concerned. Last year, the company was declared as Indiaís best-managed company by Asia Money.
    • Currently,Infosys is the fifth largest software exporter with nearly 96% of its total revenue coming from software exports. Over the last four years, itís sales and net profit have grown at a CAGR of 78% and 76% respectively.†
    • In 1994,Infosys became first Indian company to offer an Employee Stock Option Plan (ESOP), with 750,000 convertible warrants. With the proposed ADR issue Infosys will also allow employees to hold dollar-denominated stocks. This is primarily why the companyís employee turnover rate is only 14%, as compared to the software sector average of 30%.
    • Infosys is also among the few non-FMCG, non-consumer product companies to have established a brand name. In 1997-98, its brand value was pegged by the company at Rs 5 bn, up 192% from the previous year when it was Rs 1.7 bn
    • Infosys' customer base is highly fragmented. Only one customer out of 105 contributes more than US$ 6 m. There are four others who contribute between US$ 3-4 m each. The remaining 100 contribute, at an average about US$ 400,000 each. Given its emphasis on high quality and timely delivery, the company has managed to build strategic partnerships on a long term basis and in FY98, 83% of its revenues came from repeat orders.†
    • Current productivity of an Infosys'employee is US$ 50,000 as against a US industry average of US$ of 100,000,and US$ 190,000 for Cambridge Technology Partners, the US industry's most productive company.
    Main products
    • BANCS2000 - a banking software,†
    • In2000 for the Year 2000 problem,†
    • PorteNT - an application to port applications from OS/2 to WindowsNT,†
    • Webse'tu - a suite of products for enabling Internet-based electronic commerce using traditional, On-Line Transaction Processing (OLTP) application engines,
    • BankAway! - an Internet-enabled front-end to BANCS2000 functions.
    FY98
    • During FY98,Infosys became the 21st company in the world to achieve Level 4 of the capability maturity model (CMM) of the Software Engineering Institute (SEI), Carnegie Mellon University, USA.†
    • The company clocked an 85% rise in sales growth, while net profit increased sharply by 79%.†
    • Yantra, Corporation, the company's US subsidiary posted a loss of US$1.2 m on revenues of US$ 1.4 m. R&D expenditure constituted US$ 0.9 m of the loss.†
    • All its products did not do well. For instance, sales of BANCS2000 (its flagship product) declined by around 50%. Its other products WMS Yantra and DMAP haven't been extremely popular either. WebSetu has yet to take off.†
    • The explosive growth posted by the company in FY98 was largely due to the dramatic rise in Y2K revenue, which grew 458% to move from Rs 107 m in FY97 (7.5% of sales) to Rs 598 m in FY98 (23% of sales).
    Future plans
    • To virtually double its staff from the current 2,600 to about 5,000 over the next five years.
    • To establish software development centres in America, Asia (Far East), and Europe. This will give the company 24-hour software development capability, as it will be operating in multiple time zones.
    • To raise money through a $75m ADR (American Depository Receipts) issue to fund its acquisition and marketing plans. The company plans to acquire brands/companies in other markets to fuel growth. Another objective is to attract global talent by issuing stock options in convertible currency. While the company's move to acquire brands/companies abroad could reap rich dividends over a period of 4-5 years, it also carries an inherent risk of danger, if the product/company fails.†
    • Infosys' management believes that it can show a net profit growth in line with international companies. This implies a 40%-50% net profit growth over the next 3-4 years. Given the high growth rate clocked by the company over the past few years, this appears achievable.†

     

     

    Equitymaster requests your view! Post a comment on "One of India's managed companies". Click here!

      
     

    More Views on News

    Infosys: A Decent Start to FY18 (Quarterly Results Update - Detailed)

    Jul 14, 2017

    Infosys starts FY18 on an encouraging note with a stable performance.

    Infosys: A Flat End to FY17 (Quarterly Results Update - Detailed)

    Apr 13, 2017

    Infosys ends FY17 with a 7% QoQ fall in net profit for the March quarter.

    Infosys: A Decent Quarter (Quarterly Results Update - Detailed)

    Jan 13, 2017

    Infosys has reported a 0.2% QoQ decrease in the topline and an increase of 4.6% QoQ in the bottomline for the quarter ended December 2016.

    Tech Mahindra: Our Revised View (Quarterly Results Update - Detailed)

    Aug 2, 2017

    A better than expected turnaround in performance results in a change in view.

    Wipro: A Decent Start to the Year (Quarterly Results Update - Detailed)

    Jul 27, 2017

    Digital services drive growth for Wipro in 1QFY18.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    INFOSYS LTD SHARE PRICE


    Aug 17, 2017 (Close)

    TRACK INFOSYS LTD

    • Track your investment in INFOSYS LTD with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    INFOSYS LTD 8-QTR ANALYSIS

    Detailed Quarterly Results With Charts

    COMPARE INFOSYS LTD WITH

    MARKET STATS