Infosys begins to appraise start-ups - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Infosys begins to appraise start-ups

Mar 4, 2000

Infosys has begun the evaluation of proposals for funding start-ups. The first proposal is from a group of employees for a product that is a comprehensive notification service for web users, which can be downloaded at www.onscan.com. A world leader in providing IT consulting and software services to Fortune 1000 companies, Infosys offers software services such as application development, re-engineering, software maintenance, Internet consulting and package implementation.

Infosys has been looking out for acquiring companies ever since it made an issue of American Depository Receipts (ADS). The company is flush with cash, with cash and cash equivalents amounting to Rs. 4.05 bn as at March 31, 1999 (Rs 61/share post split).

This is actually pulling down the returns on assets since its core business of software development yields anywhere between 25% to 30% margins. The company’s return an assets fell to 20% for the year ended March’99 from a level of 30% in the earlier financial year since the returns on investments are not as high as the returns from its core business.

The company has also been hampered by the limit of $ 100 m set for automatic approval for taking over companies abroad. It has asked for a blanket approval but that has yet to be approved. Hence the new strategy of funding start-ups which would help the company deploy cash as well as provide incentives for retention of its existing employees. If Infosys funds www.onscan.com is approved this would arguably be the first instance of its kind in India where a listed company has actually funded its existing employees’ start-up.

Market View:
Despite the stock trading at a historical peak, given the potential from acquisitions, overseas development and e-commerce thrust, the upside remains. Perhaps the only grey area could be a de-rating of the sector as a whole, which doesn't seem likely at the moment. It is for this reason that the analysts have flagged the stock as a ‘buy’.


Equitymaster requests your view! Post a comment on "Infosys begins to appraise start-ups". Click here!

  

More Views on News

INFOSYS 2019-20 Annual Report Analysis (Annual Result Update)

Aug 5, 2020 | Updated on Aug 5, 2020

Here's an analysis of the annual report of INFOSYS for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of INFOSYS. Also includes updates on the valuation of INFOSYS.

INFOSYS Announces Quarterly Results (1QFY21); Net Profit Up 12.4% (Quarterly Result Update)

Jul 16, 2020 | Updated on Jul 16, 2020

For the quarter ended June 2020, INFOSYS has posted a net profit of Rs 43 bn (up 12.4% YoY). Sales on the other hand came in at Rs 237 bn (up 8.5% YoY). Read on for a complete analysis of INFOSYS's quarterly results.

INFOSYS Announces Quarterly Results (4QFY20); Net Profit Up 6.3% (Quarterly Result Update)

Apr 21, 2020 | Updated on Apr 21, 2020

For the quarter ended March 2020, INFOSYS has posted a net profit of Rs 43 bn (up 6.3% YoY). Sales on the other hand came in at Rs 233 bn (up 8.0% YoY). Read on for a complete analysis of INFOSYS's quarterly results.

INFOSYS 2018-19 Annual Report Analysis (Annual Result Update)

May 21, 2019 | Updated on May 21, 2019

Here's an analysis of the annual report of INFOSYS for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of INFOSYS. Also includes updates on the valuation of INFOSYS.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

INFOSYS SHARE PRICE


Sep 25, 2020 (Close)

TRACK INFOSYS

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

INFOSYS - KINGDEE INTER. COMPARISON

COMPARE INFOSYS WITH

MARKET STATS