Indian stock report - Infosys
Infosys keeps rising, up 13.9% in 9 days January 18, 2018 15:30 IST
NEWS BITES - BRIC
Infosys Ltd. (NSE:INFY), India's 2nd largest IT consulting & software company by market cap, extended its gains on Thursday, rising an additional Rs0.60 (0.1%) to close at Rs1,152.70. The shares have soared Rs140.70 (13.9%) over the past nine trading days, compared with the BSE SENSEX Index which rose 1,106.4 points (3.2%) in the nine days for a relative price increase of 10.7%. The 9-day rise was fuelled by a cumulative volume of 1.5 times the average 9-day volume of 5.3 million shares.
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS
Fundamentals, Undervaluation [compared with sector average], Technicals, Open Interest, High Performance Indicators
SECTION 2 BEARISH SIGNALS
Fundamentals, Overvaluation [compared with sector average], Technicals, Overbought/Bearish/Resistance Signals, Low Performance Indicators, Moving Annual Return, Beta, Aggregate Volumes, Prices and Turnover Period
SECTION 3 RANKING
Global, Independent Ratings
SECTION 4 FINANCIALS
Financials Summary, Annual Report for the year ended March 31, 2017 (year-on-year comparisons with previous corresponding period)-, Trailing 12 Months Dividends
SECTION 5 PROFILE
Activities, Industry & Sector, Top Management, Issued Capital
SECTION 6 STOCK BUZZ
Latest Buzz, Corporate Wire
SECTION 1 INFOSYS BULLISH SIGNALS
+ The relative yield of the stock, defined by its yield of 2.4%, divided by average yield of dividend yielding stocks in the BSE SENSEX Index of 1.3% is 181.2%. 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.
1.2 Undervaluation [compared with sector average]:
+ Price to Book of 4.1 [5.2]. We estimate Infosys stock is trading at a current year Price to Book of 3.5 and a forward year Price to Book of 3.
+ Price/Earnings/Growth of 1.8 [2.3].
+ Dividend yield of 2.4% [1.7%].
Uptrend: The stock continues its significant uptrend.
+ The price jumped 7.1% in the last week and soared 13.4% in the last month.
+ Compared with the BSE SENSEX Index which rose 2.2% for the week and 4.9% for the month, this represented a relative price increase for Infosys stock of 5.0% for the week and 8.4% for the month.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 1,086.95 minus the 26-day EMA of 1,053.75 is positive 33.2 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.
+ The stock has seen a rally of 28% in less than 4 months.
+ The present value of Rs1,000 (PV1000) invested one year ago in Infosys is Rs1,285, comprising a capital gain of Rs248 and dividend reinvested of Rs37.
|BSE SENSEX Index||1,022||1,040||1,294|
+ The present value of INR1,000 (PV1000) invested twenty years ago in Infosys is Rs172,211, including a capital gain of Rs151,544 and dividend reinvested of Rs19,667.
+ 20 years Multiplier in INR = 172.211x
+ Compound Annual Growth Rate (CAGR) in INR = 29.4%
Present Value of USD1,000 invested 20 years ago:
+ The present value of USD1,000 (PV1000) invested twenty years ago in Infosys is $US108,667, including a capital gain of $US95,257 and dividend reinvested of $US12,410.
+ 20 years ago USD 1 equalled INR 40.3226
+ 20 years Multiplier in USD = 108.667x
+ Compound Annual Growth Rate (CAGR) in USD = 26.4%
Jan 18, 2018: USD 1 equals INR 63.9
1.4 Open Interest:
+ Open interest hit a two-month high.
Open Interest Trend
Same day trend: The price increased 0.1% from Rs1,152.10 to Rs1,152.70; Open interest has increased 0.1% from 46,587,600 to 46,645,800. A price rise combined with an increase in open interest suggests there is new money coming into the market from existing or new buyers. This is a bullish signal.
|Duration||Open Interest change %||Price change %||Interpretation|
Top three traded call options [1 contract is 500 shares]
|Exercise Price||Exercise Date||Option Price||Change %||Contracts Traded|
|Rs1,100.0||January 25, 2018||Rs50.30||1.0||471|
|Rs1,080.0||January 25, 2018||Rs69.50||1.0||101|
|Rs1,060.0||January 25, 2018||Rs88.90||2.4||75|
1.5 High Performance Indicators:
|Description||Value||Rank In Market|
|Today's Turnover||Rs8 billion (US$124.6 million)||In Top 1%|
|Return on Assets [ROA] %||17.2||In Top 5%|
|Return on Capital Employed [ROCE] %||28.8||In Top 9%|
|Volatility %||2.9||In Top Quartile|
|Price/MAP50||1.13||In Top Quartile|
|EBITDA Margin %||30.3||In Top Quartile|
SECTION 2 INFOSYS BEARISH SIGNALS
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 3.2. 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]:
+ Return on Equity 20.8% [23.2%].
+ The 1.1% discount to 12-month high of Rs1,164.90 against the 35.9% premium to 12-month low of Rs848.16 suggests the climb might be peaking.
2.4 Overbought/Bearish/Resistance Signals:
+ At Rs1,152.70 the price has risen above the upper Bollinger band resistance of Rs1,140.44, indicating a downside risk for it to fall back within the band.
+ The Relative Strength Index (RSI) of 82.4 has penetrated the overbought line of 70, suggesting the price gain of 11.5% in the last 14 days is unusually high.
+ The stock is overbought according to the Williams % R indicator of -7.7, suggesting the price is close to its 14-day high of Rs1,164.90.
2.5 Low Performance Indicators:
|Description||Value||Rank In Market|
|EPS Growth %||6.4||In Bottom Quartile|
|Price to Sales||3.7||In Bottom Quartile|
2.6 Moving Annual Return
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 27.8%.
|INFY||Close (INR)||Dividends (INR)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||923.55||25.25||(14.7)||2.3||(12.4)|
|2 Yrs ago||1,082.87||39.5||12||4.1||16.0|
|3 Yrs ago||967.21||7.5||14.5||0.9||15.4|
|4 Yrs ago||844.98||6.75||35||1.1||36.1|
Close 5 years ago Rs625.70
+ 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.
2.8 Aggregate Volumes, Prices and Turnover Period:
[Volume Index or VI in brackets; 1 is average]
+ National Stock Exchange: INFY.NSE 6,602,485 [VI of 1.3] volume 95.229% of aggregate. Price: Rs1,152.70.
+ Bombay Stock Exchange: 500209.BSE 330,817 [VI of 0.9] volume 4.771% of aggregate. Day trader volume: 36.9% for the day; 64.0% for the trailing week and 72.2% for the trailing month. Price: Rs1,152.75.
+ Aggregate volume: there were 6.9 million shares of Infosys worth Rs8 billion traded today. The aggregate volume was 1.3 times average trading of 5.3 million shares.
The turnover rate in the 12 months to date was 48.5% (or a turnover period of 2 years 22 days). This average length of ownership of the stock at 0.7 times the average holding period of 2 years 9 months for stocks in the BSE SENSEX Index suggests a slightly larger number of speculators on the share register, making it less safe for long-term investors.
SECTION 3 RANKING
3.1 Global Rank [out of 47,421 stocks] and Rank in the Asia Region [out of 22,532 stocks]
|Description||Value||Global Rank||In Asia Region|
|Total Assets (US$)||13B||2,309||802|
|Net Profit (US$)||2.2B||474||110|
|Return on Equity %||20.8||4,005||1,822|
|Net Profit Margin %||20.1||5,754||2,422|
|Price to Book||4.1||25,972||15,106|
|PV$1000 (1Year) US$*||1,368||13,285||6,720|
|US$* Change (1Year) %||31.8||13,696||6,943|
* 1 year ago USD 1 = INR 68.03
Jan 18, 2018: USD 1 equals INR 63.9
3.2 Independent Ratings
+ FT 500:
Infosys Ltd. is the 323rd largest by revenue in the FT Global 500.
+ Newsweek 500:
It was ranked 185 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 9.4% in Energy productivity, 5.5% in Carbon productivity and.1% in Waste productivity.
+ Forbes 2000:
It is the 1055th largest by revenue in the Forbes Global 2000.
+ BSS/News Bites:
It is placed 1526/2769 in BSS News Bites' ranking of Indian performers in the past year, a percentile ranking of 45.
+ Vanguard Total World Stock ETF 7457:
The stock was one of 7457 global stocks selected by Vanguard Total World Stock ETF (VT). As at November 30, 2017, the Vanguard Total World Stock ETF held 199,807 shares worth $US2,991,135 or 0.02% by value of the ETF's portfolio [Ranked 851 out of 7457 by value and 8 out of 290 for India].
SECTION 4 INFOSYS FINANCIALS
4.1 Financials Summary
|Year ended||Mar 2017||Mar 2016||Mar 2015|
|Sales (USD B)||11.2||10.3||8.9|
|Pretax (USD B)||3.1||2.9||2.7|
|Net (USD B)||2.3||2.1||1.9|
Net profit was up 6.4% from US$2.1 billion in 2016 to US$2.3 billion in 2017. Earnings Per Share (EPS) was up 6.4% from Rs59.02 to Rs62.77.
4.2 Annual Report for the year ended March 31, 2017 (year-on-year comparisons with previous corresponding period)-
+ Net profit up 6.4% from INR13,489.0 crores ($US2.0b) to INR14,353.0 crores ($US2.2b)
+ EPS up 6.4% from INR59.02 (US89.15c) to INR62.77 (US96.79c).
+ Total non-current assets to Total Assets up from 31.3% to 35.6%.
+ Total Liabilities to EBITDA of 0.7 compares favourably with the Joseph Piotroski benchmark of <5.
+ Total Liabilities to Operating Cash Flow of 1.2 compares favourably with the Joseph Piotroski benchmark of <4. This ratio has improved by 8.1% from the previous year's ratio of 1.4.
+ Net tangible assets per share up 13.2% from INR249.35 ($US3.8) to INR282.34 ($US4.4).
+ EBIT Margin down from 28.6% to 27.9%.
+ EBIT to total assets down from 24.9% to 23.9%.
+ Profit before tax to Sales down from 28.6% to 27.9%.
+ Current ratio down 2% from 3.9 to 3.8.
+ Working capital to total assets down from 51.1% to 47.6%.
+ Total current assets to Total Assets down from 68.7% to 64.4%.
+ Total revenue to total assets steady at 0.9.
+ Sales and marketing expenses to Sales down from 65.4% to 65.2%.
+ Tax expenses to Sales down from 8% to 7.8%.
+ Depreciation to Sales up from 2.2% to 2.4%.
+ Total liabilities to Total assets steady at 0.2.
+ Short-term investments to Total Assets up from 7% to 19.1%.
+ Current Debtors to Total Assets down from 15.4% to 15.1%.
+ Fixed Assets to Total Assets up from 11.5% to 11.7%.
4.3 Trailing 12 Months Dividends
|Trailing 12 Months To||Value (Rs)|
|18 Jan 2018||27.75|
|18 Jan 2017||25.25|
|18 Jan 2016||39.5|
|18 Jan 2015||7.5|
|18 Jan 2014||6.75|
SECTION 5 INFOSYS PROFILE
Infosys is a global leader in the "next generation" of IT and consulting with revenues of over US$ 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 Industry & Sector
|Classification Level||Name of Sector|
|Industry||IT Services & Consulting|
|Activity||IT Services & Consulting - NEC*|
|Business Sector||Software & IT Services|
|Industry Group||Software & IT Services|
* NEC: Not elsewhere classified
5.3 Top Management
The chief executive officer is U B Pravin Rao.
5.4 Issued Capital
Based on 2,285,650,000 issued shares the market capitalisation is Rs2,634.7 billion (US$41.2 billion).
SECTION 6 STOCK BUZZ
To view the Stock BUZZ on Infosys, click here
6.1 Latest Buzz
|Jan 15, 2018||Can Infosys Limited (NSE:INFY) Continue To Outperform Its||Yahoo Finance|
|Jan 15, 2018||Infosys Ltd (NSE:INFY) Technicals Stock Overbought||livetradingnews.com|
6.2 Corporate Wire
To view Recent Company Headlines, click here
January 16: Infosys Launches Infosys Business Assurance Store to Drive Productivity and Accelerate Business Agility
Infosys Ltd has informed BSE regarding a Press Release dated January 16, 2018 titled "Infosys Launches Infosys Business Assurance Store to Drive Productivity and Accelerate Business Agility".
January 12: Infosys: Financial Results For Dec 31, 2017
Outcome of the Board Meeting
January 12: Infosys: Statement Of Investor Complaints For Quarter Ended Dec 31, 2017.
Statement of investor complaints for quarter ended Dec 31, 2017.
January 09: Infosys: Shareholding for the Period Ended December 31, 2017
Infosys Ltd has submitted to BSE the Shareholding Pattern for the Period Ended December 31, 2017. For more details, kindly Click here
January 09: Infosys: Shareholding for the Period Ended January 08, 2018
Infosys Ltd has submitted to BSE the Shareholding Pattern for the Period Ended January 08, 2018. For more details, kindly Click here
Physical Address: Electronics City Plot 44 and 97A Hosur Road Bangalore, 560100 India
Country of Incorporation: India
Exchange: National Stock Exchange
NSE:INFY; BSE:INFY; NS:INFY; IN:INFY; INFY.NS
Infosys Limited, Infosys Ltd