Assignment on Finance: Infosys

Name: Ronak Singodia

Display Name: Ronak31409
Email Id: mum.s31409@welingkar.org

Infosys Limited is an Indian multinational information technology company that provides business
consulting, information technology and outsourcing services. The company was founded by seven
engineers in Pune, Maharashtra with an initial capital of $250 in 1981.
It became the first Indian company to be listed on Nasdaq. Its shares are listed by way of American
depositary receipts (ADRs) at the New York Stock Exchange. On 24th August 2021, Infosys became
the 4th Indian company to cross $100 billion in market capitalization.
Chief executive officer (CEO): Salil S. Parekh
Headquarter: Bangalore.
Current Share Price of Infosys: ₹1763.80s

Products and Services:

 NIA – Next Generation Integrated AI Platform (formerly known as Mana)
 Infosys Consulting – a global management consulting service
 Cloud-based enterprise transformation services
 Infosys Information Platform (IIP) – Analytics platform
 EdgeVerve Systems which includes Finacle, a global banking platform
 Panaya Cloud Suite
 Skava
 Engineering Services
 Digital Marketing

Geographical Presence:
It currently has 82 sales and marketing offices and 123 development centres across the world as of 31
March 2018, with major presence in India, United States, China, Australia, Japan, Middle East and
Europe. In 2019, 60%, 24%, and 3% of its revenues were derived from projects in North America,
Europe, and India, respectively. The remaining 13% of revenues were derived from the rest of the
world.

Employees:
Infosys had a total of 259,619 employees (generally known as "Infoscions") as of 2021, out of which
38.6% were women. Out of its total workforce, 229,658 are software professionals and remaining
13,796 work for support and sales.
Infosys 2020-21 Annual Report Analysis
Infosys Income Statement Analysis:
 Operating income during the year rose 10.7% on a year-on-year (YoY) basis.
 The company's operating profit increased by 26.6% YoY during the fiscal. Operating
profit margins witnessed a fall and down at 27.4% in FY21 as against 24.0% in FY20.
 Depreciation charges increased by 12.9% and finance costs increased by 14.7% YoY,
respectively.
 Other income declined by 23.1% YoY.
 Net profit for the year grew by 16.7% YoY.
 Net profit margins during the year grew from 17.7% in FY20 to 18.9% in FY21.

Infosys Balance Sheet Analysis:

 The company's current liabilities during FY21 stood at Rs 239 billion as compared to Rs
209 billion in FY20, thereby witnessing an increase of 14.4%.
 Current assets rose 11% and stood at Rs 607 billion, while fixed assets rose 28% and stood
at Rs 466 billion in FY21.
 Overall, the total assets and liabilities for FY21 stood at Rs 1,073 billion as against Rs 910
billion during FY20, thereby witnessing a growth of 18%.

Infosys Cash Flow Statement Analysis:

 INFOSYS's cash flow from operating activities (CFO) during FY21 stood at Rs 232 billion,
an improvement of 36.6% on a YoY basis.
 Cash flow from investing activities (CFI) during FY21 stood at Rs -75 billion, an
improvement of 3,019.7% on a YoY basis.
 Cash flow from financial activities (CFF) during FY21 stood at Rs -98 billion, an
improvement of 44% on a YoY basis.
 Overall, net cash flows for the company during FY21 stood at Rs 61 billion from the Rs -9
billion net cash flows seen during FY20.

Ratio Analysis for Infosys:

 Solvency Ratios
o Current Ratio: The company's current ratio deteriorated and stood at 2.5x during
FY21, from 2.6x during FY20. The current ratio measures the company's ability to pay
short-term and long-term obligations.
o Interest Coverage Ratio: The company's interest coverage ratio improved and stood
at 137.6x during FY21, from 130.5x during FY20. The interest coverage ratio of a
company states how easily a company can pay its interest expense on outstanding debt.
A higher ratio is preferable.
  Profitability Ratios
o Return on Equity (ROE): The ROE for the company improved and stood at 25.6%
during FY21, from 25.5% during FY21. The ROE measures the ability of a firm to
generate profits from its shareholders capital in the company.
o Return on Capital Employed (ROCE): The ROCE for the company improved and stood
at 35.3% during FY21, from 34.0% during FY20. The ROCE measures the ability of a
firm to generate profits from its total capital (shareholder capital plus debt capital)
employed in the company.
o Return on Assets (ROA): The ROA of the company declined and down at 18.3% during
FY21, from 18.5% during FY20. The ROA measures how efficiently the company uses
its assets to generate earnings.

Current Valuations for Infosys:

 The trailing twelve-month earnings per share (EPS) of the company stands at Rs 45.8, an
improvement from the EPS of Rs 39.2 recorded last year.
 The price to earnings (P/E) ratio, at the current price of Rs 1,554.1, stands at 34.1 times its
trailing twelve months earnings.
 The price to book value (P/BV) ratio at current price levels stands at 5.6 times, while the
price to sales ratio stands at 4.2 times.
 The company's price to cash flow (P/CF) ratio stood at 29.2 times its end-of-year
operating cash flow earning.

Infosys Share Price Performance:

Over the last one year, Infosys share price has moved up from Rs 774.6 to Rs 1,554.1, registering a gain
of Rs 779.5 or around 100.6%.
Meanwhile, the S&P BSE IT Index is trading at Rs 29,610.2 (down 0.5%). Over the last one year it has
moved up from 15,680.9 to 29,610.2, a gain of 13,929 points (up 88.8%).
Overall, the S&P BSE SENSEX is up 44.0% over the year.