Infosys: Will it meet expectations? - 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: Will it meet expectations?

Oct 9, 2000

Infosys, benchmark of the Indian software sector, will declare its quarterly results tomorrow. Not surprisingly the company is expected to continue its high growth trajectory by doubling its sales and profits for the second quarter. We present here an interesting quarter over quarter analysis of its financials, profit margins and change in valuations. Surging exports, higher prices for its services and a large proportion of e-commerce services will help the company to keep up the scorching pace of growth.

Financial Trend Analysis
Year End March 31FY00FY01
(Rs m)1Q2Q3Q4Q1Q2QE
Sales 1,7032,0832,2642,7743,5554,083
Total Income1,8412,1792,3352,8603,7064,264
Operating Profit7798599851,1661,5281,769
Interest - - - - - -
Depreciation93107145187177180
Profit Before Tax6867528409791,3501,589
Net Profit (Before EOI) 6066577388591,2131,399
EOI – Extra ordinary income

Increasing opportunities in e-commerce would drive the company’s future revenue growth. In the first quarter of FY01, the Internet services accounted for 28.7% of its total revenues. E-transforming Fortune 1,000 companies have significantly contributed to its revenue growth. The high margin e-commerce business will enable the company to maintain its operating margins. During the quarter ended September 2000, Infosys’ is expected to gain considerably from depreciation in the value of rupee, which might lead to higher realisations for the company.

Profitability Ratios
ParticularsFY00FY01
 1Q2Q3Q4Q1Q2QE
OPM (excl. Other Inc.)37.7%36.7%40.3%38.9%38.7%38.9%
Tax / PBT11.7%12.6%12.1%12.3%10.2%12.0%
NPM32.9%30.2%31.6%30.0%32.7%32.8%
Cash EPS (Rs)42.346.253.463.284.195.7
Fully Diluted EPS (Rs)36.739.744.651.973.484.8

Infosys has always received premium valuations in the markets due to its ability to maintain the high growth rate. The company has de-risked its revenue model by diversifying the business mix and limiting the client concentration. Its strong growth and a high quality management are driving its market valuations.

Valuations Measures
ParticularsFY00FY01
 1Q2Q3Q4Q1Q2QE
CMP (Rs.)1,8143,5707,2588,9028,3197,344
P/E49.589.8162.7171.4113.486.6
Growth Ratios*      
Sales 12.1%22.3%8.7%22.5%28.2%14.8%
Operating profit 22.9%10.3%14.6%18.4%31.0%15.8%
Net profit 40.6%8.4%12.3%16.4%41.3%15.3%
* Growth compared to quarter over quarter

Equitymaster requests your view! Post a comment on "Infosys: Will it meet expectations?". Click here!

  

More Views on News

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

Infosys had an Exceptional Quarter Buoyed by Huge Deal Wins. Revenue Guidance Boosts Stock (Views On News)

Oct 14, 2021

Infosys raised its forecast for annual revenue growth to 16.5-17.5% from the earlier 14-16%, predicted in July 2021.

Infosys Becomes Fourth Company to Hit US$100 bn Marketcap. What's Fuelling the Rally? (Views On News)

Aug 24, 2021

Infosys shares hit a record high on the BSE today and helped it enter the 'Big Four' club.

If You had Invested Rs 1 Lakh in TCS in 2011, this is how Much You Would have Today (Views On News)

Nov 30, 2021

Did TCS perform better than the market and its peers?

India's Top 4 IT Companies are Struggling. Here's Why... (Views On News)

Oct 22, 2021

As attrition rates are unbelievably high, top Indian IT companies are going for big-ticket raises, and much more hiring this year.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

Don't Sell these Stocks if the Market Falls (Profit Hunter)

Nov 17, 2021

These are the 3 types of stocks that you should not sell in a market crash.

How to Find Your Next 10-Bagger in this Market (Profit Hunter)

Nov 19, 2021

The #1 make or break factor in your portfolio you shouldn't ignore.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

INFOSYS SHARE PRICE


Nov 30, 2021 (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 - IBM COMPARISON

COMPARE INFOSYS WITH

MARKET STATS