INFOSYS LTD - Quantamental Equity Research Report

Quantamental Equity Research on INFOSYS LTD | Release: 13 Jan 2019 00:15:36 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:INFY and BSE CODE:500209
Last Close:  INR 683.5
Fair Value:  INR 524.3
Est. Price by Mar 19:  INR 382.55
Market Capitalization (INR Crs):  298597.08
Industry:  IT Consulting & Software
Rating:  STRONG SELL
Downside:  -23%
Company Profile
Infosys Limited ('the Company' or Infosys) is a leading provider of consulting, technology, outsourcing and next-generation services and software. Along with its subsidiaries, Infosys provides Business IT services
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 3% 21% 73%  
EBIT % 2% 17% 58%  
Earnings % 12% 30% 70%  
Book Value %  -6% 28% 71%  
Stock Total Return %  21% 8% 81%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 12.82  
(B) FII/FPI 34.60  
(C) DII/Insurance Companies 22.43  
(D) Public holding < 2 lakhs of cap. 5.24  
(E) Others 24.91  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 339 385 317 318 404 532 606 475 574 383 440 492 536 571  
Return on Equity 27% 26% 27% 25% 24% 24% 22% 21% 25% 19% 20% 20% 20% 20%  
Price to Earning  12.4 12.9 8.7 7.7 8.7 9.9 10.3 7.6 7.8 12.1 12.1 12.1 12.1 12.1  
EVTI 3.1 3.1 2.0 1.7 1.7 2.1 2.1 1.3 1.5 1.8 1.8 1.8 1.8 1.8  
EVTIFM 12.4 12.9 8.7 7.7 8.7 9.9 10.3 7.6 7.8 12.1 12.1 12.1 12.1 12.1  
Price to Book Value 3.4 3.4 2.3 1.9 2.1 2.4 2.2 1.6 1.9 2.3 2.4 2.5 2.4 2.4  
Debt to Equity  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0  
Dividend Yield 2% 4% 4% 3% 4% 6% 4% 5% 8% 4% 4% 4% 4% 4%  
Cash Flow to Firm 43% 11% 33% 45% 52% 14% 5% 28% 17% 8% 9% 10% 12% 12%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales     70,522.00     82,219.41     93,475.38  1,03,564.60  1,11,742.81  1,17,329.95  
EBITDA     22,133.00     23,180.99     26,354.50     29,199.06     31,504.83     33,080.07  
EBIT     20,270.00     21,008.97     24,154.92     27,035.27     29,438.93     31,330.61  
PBT     20,270.00     21,008.97     24,154.92     27,035.27     29,438.93     31,330.61  
NPAT     16,029.00     13,868.02     15,944.66     17,845.98     19,432.64     20,681.34  
Price to Earning               7.78            12.05            12.05            12.05            12.05            12.05  
Price to Book Value              1.92              2.34              2.44              2.47              2.43              2.35  
Debt to Equity                   -                0.00                  -                    -                    -                    -    
Return on Equity              0.25              0.19              0.20              0.20              0.20              0.20  
Enterprise Value to Total Income (EVTI)              1.53              1.81              1.83              1.84              1.81              1.78  
Enterprise Value to Total Income to Firm Margin(EVTIFM)              8.80            14.75            14.78            14.64            14.29            13.86  
Price or Est. Share Prices          574.03          382.55          439.85          492.30          536.10          570.55  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT     21,008.97     24,154.92     27,035.27     29,438.93     31,330.61  
Interest                  -                    -                    -                    -                    -    
Depreciation       2,172.01       2,199.59       2,163.79       2,065.90       1,749.46  
Cash Flow Before Tax     23,180.99     26,354.50     29,199.06     31,504.83     33,080.07  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax     15,301.77     17,396.61     19,274.30     20,796.34     21,836.15  
Terminal Cash Flow                                                                                      -    3,28,376.06  
Total Cash Flow     15,301.77     17,396.61     19,274.30     20,796.34  3,50,212.22  
Present Value of Cash Flow  2,29,033.23  
Debt                  -    
Value of Equity  2,29,033.23  
Fair Value Per Share          524.30  
Equity       2,98,597
Debt                   0
Beta Take from Reuters 0.987
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                  -  
Tax Benefit                  -  
Interest Net of Tax                  -  
Debt                   0
Cost of Debt 0%
Cost of Equity 15%
Debt Weight 0%
Equity Weight 100%
WACC 15%
Cash Flow of Mar-23 E     21,836.15
Growth 7.1%
Present Value of Terminal Cashflow  3,28,376.06
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  TCS        1,842.55       6,91,396          202.93            47.90            39.57              4.21            22.61              9.08            22.86                  -                1.38            30.19            79.50       1,54,004            69.93               100              1.31            20.82              2.58            24.10          602.37
   2  Infosys           683.50       2,98,597          148.75            27.21            29.52              3.01            22.54              4.60            19.95                  -                3.18            11.14            13.92          88,612            12.82               105              3.84            20.27           -12.19           -29.64          340.05
   3  HCL Technologies           940.05       1,30,914          294.67            35.10            31.02              2.06            13.46              3.19            14.13              0.02              1.27            28.39            30.19          60,576            60.17                 58              7.08            19.52              4.24            14.82          664.45
   4  Wipro           328.70       1,48,739          114.24            19.55            16.95              2.18            23.07              2.88            19.21              0.29              0.30            18.45            35.87          60,821            74.31               119              2.37              8.53           -10.93           -13.82          208.55
   5  Tech Mahindra           699.20          68,609          196.66            28.11            24.77              1.80            17.05              3.56            16.66              0.13              2.00            18.96            22.21          35,220            35.96                 78              4.27            13.46            17.60            26.29          454.48
   6  Oracle Fin.Serv.        3,637.35          31,192          548.91            37.59            46.14              5.65            22.67              6.63            24.38                  -                3.56              3.88              3.53            5,052            73.53               103             -9.78              2.00           -12.40              2.96       1,360.55

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