Indian stock report - Infosys

INDIA

Infosys rises for a third consecutive day, a three-day rise of 2.5% July 25, 2017 15:30 IST

NEWS BITES - BRIC

Infosys Ltd. (NSE:INFY), India's 2nd largest IT consulting & software company by market cap, has risen Rs3.30 (0.3%) for a third consecutive day on Tuesday. This brought its three-day rise to Rs24.40 (2.5%), compared with the BSE SENSEX Index which rose 323.9 points (1.0%) in the three days for a relative price increase of 1.5%. Cumulative volume in the 3 days was 0.9 times the average 3-day volume of 3.8 million shares. The stock last traded at Rs993.85.

SECTION 1

INFOSYS BULLISH SIGNALS

1.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 2.6%, divided by average yield of dividend yielding stocks in the BSE SENSEX Index of 1.4% is 181.1%. This suggests the stock is undervalued in dividend yield terms.

+ Total Liabilities/EBITDA of 0.7 is comfortably below the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 21.3% in the last 3 years. This is considered superior and suggests a high margin of safety.

+ As per the Du Pont analysis, Return on Equity is high at 20.8%. This is computed as net profit margin of 20.1% times asset turnover [sales/assets] of 0.86 times leverage factor [total assets/shareholders' equity] of 1.2.

+ Revenue growth has shown signs of recovery in recent quarters. [Quarter ended, all figures in %]

QtrRevenue GrowthNet Profit GrowthNet Profit Margin
Mar 173.4-2.821
Dec 16-0.22.821.5

1.2 Undervaluation [compared with sector average]:

+ Return on Equity 20.8% [7.7%].

+ Return on Assets 17.2% [4.4%].

+ Return on Capital Employed 28.8% [8.2%].

1.3 Technicals:

Uptrend: The stock rose on high volatility today and expanding price range.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 976.81 minus the 26-day EMA of 966.44 is positive 10.37 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ The present value of INR1,000 (PV1000) invested twenty years ago in Infosys is Rs164,035, including a capital gain of Rs144,351 and dividend reinvested of Rs18,684.

+ 20 years Multiplier in INR = 164.035x

+ Compound Annual Growth Rate (CAGR) in INR = 29.1%

Present Value of USD1,000 invested 20 years ago:

+ The present value of USD1,000 (PV1000) invested twenty years ago in Infosys is $US90,805, including a capital gain of $US79,462 and dividend reinvested of $US10,343.

+ 20 years ago USD 1 equalled INR 35.7143

+ 20 years Multiplier in USD = 90.805x

+ Compound Annual Growth Rate (CAGR) in USD = 25.3%

Jul 25, 2017: USD 1 equals INR 64.52

1.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverRs3.7 billion (US$57 million)In Top 1%
Return on Assets [ROA] %17.2In Top 5%
Return on Capital Employed [ROCE] %28.8In Top 9%
Volatility %1.3In Top 9%
EBITDA Margin %30.3In Top Quartile

SECTION 2

INFOSYS BEARISH SIGNALS

2.1 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 2.7. Compared with the rest of the market the stock is overvalued and ranks in the bottom quartile of stocks by value of Q Ratio.

2.2 Overvaluation [compared with sector average]:

+ Price/Earnings of 15.8 [13.4].

+ Price/Sales of 3.3 [2.5].

+ Price to Book of 3.5 [1.1].

+ Year-on-Year Earnings Growth of 6.4% [42.2%].

+ Price/Earnings/Growth of 1.5 [0.3].

2.3 Low Performance Indicators:

DescriptionValueRank In Market
Price to Sales3.3In Bottom Quartile
EPS Growth %6.4In Bottom Quartile

SECTION 3

PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Infosys is at a discount of 7.0% to its 12-month high of Rs1,068.49 on July 27, 2016. It is also at a premium of 12.0% to the 12-month low of Rs887.40 on November 09, 2016.

+ The present value of Rs1,000 (PV1000) invested one year ago in Infosys is Rs968, comprising a capital loss of Rs56 and dividend reinvested of Rs25.

PV10001-week1-month1-year
INFY.NSE1,0081,072968
BSE SENSEX Index1,0171,0331,147

3.2 Moving Annual Return

INFYClose (INR)Dividends (INR)Capital Gain / (Loss) %% YieldAnnual Return %
July 25993.8525.75(5.6)2.4(3.2)
1 Yr ago1,053.2424.251.52.33.8
2 Yrs ago1,038.073733.64.838.4

3.3 Beta:

+ Beta: the Beta of Infosys stock is 0.7. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.4 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ National Stock Exchange: INFY.NSE 3,572,807 [VI of 1.0] volume 96.537% of aggregate. Price: Rs993.85.

+ Bombay Stock Exchange: 500209.BSE 128,162 [VI of 0.5] volume 3.463% of aggregate. Day trader volume: 88.1% for the day; 11.9% for the trailing week and 57.4% for the trailing month. Price: Rs994.15.

+ Aggregate volume: there were 3.7 million shares of Infosys worth Rs3.7 billion traded today. The aggregate volume equalled average trading of 3.8 million shares.

The turnover rate in the 12 months to date was 43.3% (or a turnover period of 2 years 3 months). This average length of ownership of the stock at 0.8 times the average holding period of 2 years 9 months for stocks in the BSE SENSEX Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.

SECTION 4

RANKING

4.1 Global Rank [out of 47,590 stocks] and Rank in the Asia Region [out of 22,100 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)35.2B38677
Total Assets (US$)12.9B2,226753
Revenue (US$)11.1B1,197359
Net Profit (US$)2.2B441105
Return on Equity %20.83,8691,752
Net Profit Margin %20.15,6392,316
Price to Book3.523,69612,814
Price/Earnings15.88,5594,008
Yield %2.69,3763,857
PV$1000 (1Year) US$*1,00724,40211,680
US$* Change (1Year) %-12.629,13314,358

* 1 year ago USD 1 = INR 67.57

Jul 25, 2017: USD 1 equals INR 64.52

4.2 Independent Ratings

Infosys Ltd. is the 323rd largest by revenue in the FT Global 500.

It is the 1055th largest by revenue in the Forbes Global 2000.

It is placed 1883/2527 in BSS News Bites' ranking of Indian performers in the past year, a percentile ranking of 26.

SECTION 5

INFOSYS FINANCIALS

5.1 Financials Summary

Year endedMar 2017Mar 2016Mar 2015
Sales (USD B)11.110.28.8
Pretax (USD B)3.12.92.7
Net (USD B)2.22.11.9
EPS (INR)62.7759.0254.13

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (Rs)
25 Jul 201725.75
25 Jul 201624.25
25 Jul 201537

SECTION 6

INFOSYS PROFILE

6.1 Activities

Infosys is a global leader in the "next generation" of IT and consulting with revenues of over US$ 4 billion. Infosys defines, designs and delivers technology-enabled business solutions that help Global 2000 companies win in a Flat World. Infosys also provides a complete range of services by leveraging it's domain and business expertise and strategic alliances with leading technology providers. Infosys' service offerings span business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing

6.2 Industry & Sector

Classification LevelName of Sector
Industry GroupSoftware & IT Services
IndustryIT Services & Consulting
ActivityIT Services & Consulting - NEC*
Economic SectorTechnology
Business SectorSoftware & IT Services

* NEC: Not elsewhere classified

6.3 Top Management

The chief executive officer is Vishal Sikka.

6.4 Issued Capital

Based on 2,285,650,000 issued shares the market capitalisation is Rs2,271.6 billion (US$35.2 billion).

SECTION 7

STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

July 21: Infosys: Updates

July 21: Infosys: Shareholding for the Period Ended June 30, 2017

July 14: Infosys: Statement Of Investor Complaints For Quarter Ended June 30, 2017

July 14: Infosys: Outcome of Board Meeting

July 14: Infosys: Standalone & Consolidated Financial Results for June 30, 2017

Contact: 080-28520261

Physical Address: Electronics City Plot 44 and 97A Hosur Road Bangalore, 560100 India

State/Province/Country: India

Country of Incorporation: India

Exchange: National Stock Exchange

ISIN: INE009A01021

NSE:INFY; BSE:INFY; NS:INFY; IN:INFY; INFY.NS

PermID: 4295872682

Infosys Limited, Infosys Ltd

Source: www.BuySellSignals.com