Indian stock report - Infosys
Infosys put call ratio decreases 3.4%, stock increases September 19, 2018 15:30 IST
NEWS BITES - BRIC
Infosys Ltd. (NSE:INFY), India's 2nd largest IT consulting & software company by market cap, has increased Rs0.65 (0.1%) from its last trading session of September 18 to close at Rs719.75. Compared with the BSE SENSEX Index which fell 169.4 points (0.5%) in the day, the relative price increase was 0.5%. The volume was 0.5 times the average daily trading volume of 9.4 million shares. Open interest contracts on exchange traded options included 4,212,000 put contracts and 9,778,800 call contracts. The put:call ratio was 0.43, down 3.4% for the day. The decrease is a bullish indicator. Its MCap is Rs3,145.8 billion (US$43.4 billion).
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS incl. Open Interest
SECTION 2 BEARISH SIGNALS incl. Open Interest
SECTION 3 RELATED NEWS
SECTION 4 SUMMARY FINANCIALS
SECTION 5 PROFILE
SECTION 1 INFOSYS BULLISH SIGNALS
1.1 Open Interest:
+ % Change in Put Call Ratio
|Put Call Ratio||1 Day||1 Week||1 Month||Interpretation|
+ Put Call Contracts
Put/Call ratio has declined from 0.446 to 0.431 suggesting an uptrend.
|Put Contracts||Call Contracts||Put/Call ratio|
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 724.68 minus the 26-day EMA of 714.73 is positive 9.95 suggesting a bullish signal.
+ The 3.8% discount to 12-month high of Rs748.50 against the 68.4% premium to 12-month low of Rs427.46 suggests the stock continues to push for new highs.
+ In the last three months the stock has hit a new 52-week high fifteen times, pointing to a significant uptrend.
+ The present value of Rs1,000 (PV1000) invested one year ago in Infosys is Rs1,704, comprising a capital gain of Rs639 and dividend reinvested of Rs65.
|BSE SENSEX Index||984||954||1,146|
+ The present value of INR1,000 (PV1000) invested twenty years ago in Infosys is Rs110,447, including a capital gain of Rs97,666 and dividend reinvested of Rs11,780.
+ 20 years Multiplier in INR = 110.447x
+ Compound Annual Growth Rate (CAGR) in INR = 26.5%
Present Value of USD1,000 invested 20 years ago:
+ The present value of USD1,000 (PV1000) invested twenty years ago in Infosys is $US64,811, including a capital gain of $US56,898 and dividend reinvested of $US6,913.
+ 20 years ago USD 1 equalled INR 42.5532
+ 20 years Multiplier in USD = 64.811x
+ Compound Annual Growth Rate (CAGR) in USD = 23.2%
Sep 19, 2018: USD 1 equals INR 72.52
High Performance Indicators and rank of Infosys in the Indian market:
|Description||INFY Value||Rank In Market|
|Today's Trading Turnover||Rs3.6 billion (US$49.6 million)||In Top 1%|
|Return on Assets [ROA] %||20.1||In Top 4%|
|Return on Capital Employed [ROCE] %||30.8||In Top 6%|
|Price/MAP200||1.21||In Top 9%|
|Volatility %||1.9||In Top Quartile|
|EBITDA Margin %||28.7||In Top Quartile|
|Price/MAP50||1.04||In Top Quartile|
+ The relative yield of INFY, defined by its yield of 3%, divided by average yield of dividend yielding stocks in the BSE SENSEX Index of 1.1% is 267.3%. This suggests Infosys 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 21.1% 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 [ROE] is high at 25.0%; an improvement from 20.8% last year. ROE is computed as net profit margin of 22.7% times asset turnover [sales/assets] of 0.88 times leverage factor [total assets/shareholders' equity] of 1.2.
YOY Improvement in ROE and Profit Margin
|Du Pont Analysis||ROE||Profit Margin||Asset Turnover||Equity Multiplier|
Annual Trend in Revenue, EPS and EBITDA:
5-years average annualized earnings growth rate of 11.8%
+ Earnings per share growth rate is positive and has seen consecutive rises in recent years. [Year ended, all figures in %]
|Year||Revenue Growth||EPS Growth||EBITDA Growth|
1.4 Undervaluation [compared with sector average]:
+ Price/Earnings of 20 [24.4]. We estimate Infosys stock is trading at a current year P/E of 18 and a forward year P/E of 16.5.
+ Year-on-Year Earnings Growth of 14.7% [8.1%].
+ Return on Assets 20.1% [17.2%].
+ Return on Capital Employed 30.8% [8.2%].
+ Dividend yield of 3% [0.7%].
SECTION 2 INFOSYS BEARISH SIGNALS
2.1 Open Interest:
+ Open Interest Trend
Same day trend: The price increased 0.1% from Rs719.10 to Rs719.75; Open interest has dropped 2.3% from 59,958,000 to 58,597,200. A price rise combined with a decline in open interest suggests the rally is caused by short sellers covering their positions. This indicates money is leaving the market, a bearish signal.
|Duration||Open Interest change %||Price change %||Interpretation|
|1-day||-2.3||0.1||Market is Weakening|
Low Performance Indicators and rank of Infosys in the Indian market:
|Description||INFY Value||Rank In Market|
|% Prem to Vol Wtd Price||0.2||In Bottom 4%|
|Price to Sales||4.5||In Bottom Quartile|
|EPS Growth %||14.7||In Bottom Quartile|
|P/E * P/NTA||100.75||In Bottom Quartile|
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 3.9. Compared with the rest of the market the stock is overvalued and ranks in the bottom 9% of stocks by value of Q Ratio.
Quarterly Trend in Revenue, Net Profit and Net Profit Margin:
+ Net Profit margin is positive but falling in recent quarters. [All figures in %]
|Qtr-ended||Revenue Growth||Net Profit Growth||Net Profit Margin|
|Jun 18 [Q1]||5.8||-2.1||18.9|
|Mar 18 [Q4]||-||-||20.4|
2.3 Overvaluation [compared with sector average]:
+ Price to Book of 5 [1.7].
2.4 Aggregate Volumes and Prices:
[Volume Index or VI in brackets; 1 is average]
+ National Stock Exchange: INFY.NSE 4,849,498 [VI of 0.5] volume 96.971% of aggregate. Price: Rs719.75.
+ Bombay Stock Exchange: 500209.BSE 151,490 [VI of 0.3] volume 3.029% of aggregate. Day trader volume: 36.9% for the day; 64.0% for the trailing week and 72.2% for the trailing month. Price: Rs720.40.
+ Aggregate volume: there were 5 million shares of Infosys worth Rs3.6 billion traded today. The aggregate volume was 0.5 times average trading of 9.4 million shares.
The turnover rate in the 12 months to date was 43.2% (or a turnover period of 2 years 3 months). This average length of ownership of the stock at 0.9 times the average holding period of 2 years 8 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.
2.5 Moving Annual Return (Past 5 years)
Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in INFY would have produced a return of 68.9%.
|INFY||Close (INR)||Dividends (INR)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||439.14||12.88||(11.7)||2.6||(9.1)|
|2 Yrs ago||497.3||12.12||(2.0)||2.4||0.4|
|3 Yrs ago||507.45||11.12||24.1||2.7||26.8|
|4 Yrs ago||408.81||-||22.5||-||22.5|
Close 5 years ago Rs333.64
+ Beta: the Beta of Infosys stock is 0.8. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
2.7 The Past Quarter
+ Infosys Ltd. (NSE:INFY), has climbed Rs98.95 (or 15.9%) in the past quarter to close at Rs719.75 today. Compared with the BSE SENSEX Index which rose 1,834.5 points (or 5.2%) in the past quarter, this represented a relative price increase of 10.7%. The stock is trading at a dividend yield of 3%. The dividend yield is 4.1 times the sector average of 0.7%; and is the 6th highest in the It Consulting & Software sector.
SECTION 3 INFOSYS RELATED NEWS
3.1 American Depository Receipts
+ Infosys Technologies ADR loses $US239.8 million in MCap, steepest heavyweight fall in Computers sector
Infosys Technologies Ltd. (N:INFY), the International Depository Receipt (IDR) market's 2nd largest Computers company by market cap, has decreased 11.0c (1.1%) from its last trading session of September 17 to close at $US10.14. Compared with the Bank of New York Mellon Composite ADR Index which rose 0.9 points (0.6%) in the day, the relative price change was -1.7%. The volume was 0.6 times the average daily trading volume of 10.8 million ADRs. It posted the steepest fall in MCap with the most influence on the Computers sector. Its MCap is $US22.1 billion.
3.2 Corporate Wires
Infosys (INFY) issued 3 new Releases this week.
September 19: Infosys: Disclosure
The arbitral tribunal has communicated its decision in the arbitration proceedings in relation to the severance agreement between the company and its former CFO, Mr. Rajiv Bansal. Per the award, Infosys is required to pay Mr. Bansal the outstanding severance amount of Rs.12.17 crores with interest. While the award acknowledges that Infosys had bona fide disputes, its' counter claim for refund of previously paid severance amount of Rs.
To view the previous 3 months' Releases in full, click here
3.3 Other News
+ BSS/News Bites:
Infosys Ltd. is placed 247/2570 in BSS News Bites' ranking of Indian performers in the past year, a percentile ranking of 90.
+ Vanguard Total World Stock ETF 7587:
The stock was one of 7587 global stocks selected by Vanguard Total World Stock ETF (VT) who sold 11,244 shares in the period Jun 30, 2018 to Jul 31, 2018 worth $US-14,982,574 at an estimated Volume Weighted Average Price (VWAP) of $US1332.495. As at Jul 31, 2018, the Vanguard Total World Stock ETF held 118,171 shares worth $US2,294,225 or 0.01% by value of the ETF's portfolio [Ranked 1213 out of 7587 by value and 12 out of 306 for India].
SECTION 4 INFOSYS SUMMARY FINANCIALS
4.1 Dividend History
+ Trailing 12 months dividend has improved from Rs11.12 in 2015 to Rs21.75 in 2018.
4.2 Financials Summary (Past 3 years)
|Year ended||Mar 2018||Mar 2017||Mar 2016|
|Sales (USD B)||9.7||9.9||9|
|Pretax (USD B)||2.8||2.8||2.6|
|Net (USD B)||2.2||2||1.9|
+ Net profit was up 11.7% from US$2 billion in 2017 to US$2.2 billion in 2018.
+ Earnings Per Share (EPS) was up 14.7% from Rs31.39 to Rs36.0.
SECTION 5 INFOSYS PROFILE
Infosys is a global leader in the "next generation" of IT and consulting with revenues of over US$ 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
5.2 Top Management
The chairman is Nandan Nilekani and the chief executive officer is Salil S. Parekh.
5.3 Issued Capital
Based on 4,370,630,848 issued shares the market capitalisation is Rs3,145.8 billion (US$43.4 billion).
Physical Address: Electronics City Plot 44 and 97A Hosur Road Bangalore, 560100 India
Country of Incorporation: India
Exchange: National Stock Exchange
Economic Sector: Technology
Business Sector: Software & IT Services
Industry Group: Software & IT Services
Industry: IT Services & Consulting
Activity: IT Services & Consulting - NEC*
* NEC: Not elsewhere classified
NSE:INFY; BSE:INFY; NS:INFY; IN:INFY; INFY.NS
Infosys Limited, Infosys Ltd