Infosys Analysis

8/8/2019 Infosys Analysis

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SECURITY ANALYSISASSIGNMENT

SUBMITTED TO- SUBMITTED BY-

DR. KAPIL GUPTA JATIN

09BS0000950


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Company information

Infosys Technologies Limited

Type Public BSE: 500209

NASDAQ: INFY

Founded July 2, 1981

Headquarters Bangalore, India Electronics City, Hosur Road

Key people N. R. Narayana Murthy (Chairman and Chief Mentor)

Nandan Nilekani (Co-Chairman)

Kris Gopalakrishnan (Chief Executive Officer and ManagingDirector)

S. D. Shibulal (Chief Operating Officer and Director)

Industry Software services

Products Finacle (a universal banking product)

Services Information technology consulting services and solutions

Revenue Rs. 21,693 crore ($4.66 billion) (FY 2008-09)

Net income Rs. 5,988 crore ($1.28 billion) (FY 2008-09)

Employees 104,850Subsidiaries Infosys BPO

Infosys Consulting

Infosys Australia

Infosys China

Infosys Mexico

Infosys Sweden

Website www.infosys.com


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COMPANY NAME: INFOSYS TECHNOLOGIES LTD

INDUSTRY: IT SOFTWARE

LISTING: BSE, NSE, NASDAQ

INDICES: SENSEX, BSE 100, BSE 200, BSE 500, BSE IT, TECK, NIFTY, CNX

IT, CNX 500, CNX 100, CNX SERVICE

PERIOD OF ANALYSIS: 1ST

APR, 2005 31ST

MAR, 2010

Choosing the Index: The Index that is taken for analysis is CNX IT because of

the following reasons:

y Weightage of the stock in IndexThe stock has approximately 56.4158 % weightage in CNX IT

y Correlation among Stock & IndexAmong other indexes, CNX IT has more correlation with the stock

CORRELATION

CNX IT 0.885742

NIFTY 0.629355

BANKEX 0.49415BSE 100 0.624821

BSE 200 0.614394

BSE 500 0.604118

SENSEX 0.658771


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Calculation of Beta, R2, ADJUSTED R2

PERIOD BETA R2

ADJUSTED

R2

1 APR, 05- 31

MAR, 10 0.954107 0.784538843 0.784364381

1 APR, 05 - 30

SEP, 05 1.010754 0.71882802 0.716578644

1 OCT, 05 - 31

MAR, 06 0.997588 0.670592134 0.667869755

1 APR, 06 - 30

SEP, 06 0.944264 0.811623332 0.810116319

1 OCT, 06 - 31

MAR, 07 0.927039 0.756499692 0.754470523

1 APR, 07 - 30

SEP, 07 0.998041 0.737451263 0.735333934

1 OCT, 07 - 31

MAR, 08 1.027595 0.817828121 0.816347049

1 APR, 08 - 30

SEP, 08 1.024099 0.817622037 0.816139289

1OC

T, 08 - 31MAR, 09 0.833383 0.79840139 0.796663471

1 APR, 09 - 30

SEP, 09 0.964973 0.799782683 0.798127995

1 OCT, 09 - 31

MAR, 10 0.967666 0.814861768 0.813305984


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Annual General Meetings Dates

AGM/EGMAnnouncement

Date

Purpose Date Book Closure Remarks

From To

13-04-2010 AGM 12-06-2010 29-05-2010 12-06-2010 300% Dividend

15-04-2009 AGM 20-06-2009 06-06-2009 20-06-2009 270% Dividend

15-04-2008 AGM 14-06-2008 31-05-2008 14-06-2008 545% Dividend (Final

Dividend 145% + Special

Dividend 400%)

13-04-2007 AGM 22-06-2007 08-06-2007 22-06-2007 130% Final Dividend

11-10-2006 EGM 07-11-2006 - - To seek approval for theSecondary American

Depositary Share Offering

and expects the Offering to

be completed thereafter.

14-04-2006 AGM 10-06-2006 27-05-2006 10-06-2006 770% Dividend (Rs. 30/- for

Silver Jublee Special Dividen

and Rs 8.50/- for Final

Dividend)

14-04-2005 AGM 11-06-2005 03-06-2005 11-06-2005 Final dividend of Rs. 6.50 peshare (130% on an equity

share par value Rs. 5/-).


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Dividends Declared on Following Dates

Announcement

Date

Effective

Date

Dividend

Type

Dividend

(%)

Remarks

13-04-10 26-05-10 Final 300.00-

22-09-09 15-10-09 Interim 200.00-

15-04-09 04-06-09 Final 270.00-

25-09-08 16-10-08 Interim 200.00-

15-04-08 29-05-08 Final 545.00(Final Dividend 145% + Special Dividend

400%)

26-09-07 18-10-07 Interim 120.00-

13-04-07 06-06-07 Final 130.00AGM

28-09-06 19-10-06 Interim 100.00-14-04-06 25-05-06 Final 770.00Silver Jubilee special dividend of Rs. 30

per share (600% on par value of Rs. 5 pe

share) & final dividend of Rs. 8.50/- per

share (170% on an equity share par valu

Rs. 5/-).

23-09-05 17-10-05 Interim 130.00-

14-04-05 01-06-05 Final 130.00Final dividend of Rs. 6.50 per share

(130% on an equity share par value Rs.

5/-).


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NEWS Analysis

2005

-Information Technology Boom- Aspis Bank, one of the leading medium size retail and commercial

banks operating in Greece, signs up for Finacle universal banking

solution to power its core banking and treasury operations across 66

branches.

- The Shop Floor Control System developed by the Company and Arrow

Electronics, a global provider of electronic components and computer

products and services, has won the 2004 InfoWorld 100 award for being

one of the top 100 best IT projects of the year.

Inference: This lead to positive expectations regarding the stock as well as the

Sector and market prices of the stock started rising.

- On May 03, 2005 voluntarily furnished extensible Business Reporting

Language (XBRL) data to the United States Securities and Exchange

Commission (SEC) electronically in a 6-K exhibit.

-Infosys Technologies and B-Source on June 29, 2005, announcespartnership to provide `pay-as-you-transact' services, known as

Business Service Provisioning, to European banks in the private and

asset management sectors.

Inference: This Information resulted in a positive move in the Stock of the

Company and prices were rising continuously.

-Infosys Technologies and Microsoft Corp unveiled the Catalytic IT

concept centre at the Infosys campus in Bangalore on Nov 29.

- Infosys won the Global MAKE (Most Admired Knowledge Enterprises) award, for

the years 2003, 2004 and 2005, being the only Indian company to win this award

and is inducted into the Global Hall of Fame for the same.


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-India's second largest exporter of software and services, Infosys Technologies

Ltd, has announced a strong set of results for

Inference: this also added to the reputation of the company and its prices were

continuously rising with little fluctuations into it.

2006

- Infosys & Microsoft Share Vision for Effective Enterprise

Information Management

- Croatianbank chooses Infosys for tech revamp

- Infosys Implements PeopleSoft Enterprise Applications at Nissan

North America

Inference: The overall effect on Infosys Share price was positive. In this year the

prices rose sharply from the level of 1500 in Jan - 06 to the level of 2450 in Dec -

06 with some variations due to other factors.

2007

-Infosys and Capgemini stock rises on merger reports

- Microsoft and Infosys expand relationship 26 November 2007 | By CBR Staff

Writer

Infosys Technologies, a provider of consulting and information technology

services, has announced several strategic efforts directed toward deepening

services delivered to Microsoft Corporation, including a new dedicated Vendor

Offsh

ore Facility and aM

icrosoft DynamicsC

onceptC

enter.

- Infosys' profit soars 52% in Q3 11 January 2007 | By CBR Staff Writer

Infosys Technologies, India's second-largest IT services vendor, kicked off earnings

season with strong growth in its third fiscal quarter, although its forecasts

received a cool response from the market.


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- Infosys to Open Development Center in Mexico, its First in Latin

America

-Nadra Bank selects Infosys Finacle 10 September 2007 | By CBR Staff Writer

Nadra Bank has selected India-based Infosys's Finacle Universal Banking Solutionfor the bank's transformation initiative. The implementation will be based on the

Finacle bank-in-a-box approach to influence international best practices and

changing markets

- Infosys Receives the Highest Score in Strategy in Independent

Research Firm's Report on the Applications Outsourcing Market

Inference:

- Infosys shares fall as outlook disappoints 11 October 2007 | By CBR Staff WriterShares in Indian IT services vendor Infosys Technologies fell 7% after the

company's earnings forecast for the full year failed to meet expectations.

-Exchange Rate Variations- this added to the loss of return on Dollar-rupee and

hence the values ofBeta as well as R2fell as compared to the 1st

half of 2006 and

2nd

half of 2006

2008

-Infosys & Nihon Unisys sign MoU for Strategic Business Deployment &

Joint Development for Sales & Solution Service

- DSB Bank Partners with Finacle from Infosys for Core Banking-led

Transformation

-Fair Isaac teams with Infosys to leverage global delivery methodology 11November 2008 | By CBR Staff WriterFair Isaac, a provider of analytics and decision management technology, is

teaming with Infosys Technologies, a provider of consulting and IT services, to

leverage its global delivery methodology and integration network.

-


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Inference:

-Due to Global Recession the values of bothBETA and R2 fell and hence the same

effect was visible on the market price of the share as well.

- the same effect was seen in 2nd

half of 2008-09 as the values ofBETA and R2

fell

due to the global fear of recession and markets slowly started recovering form the

recession phase and as a result market prices in next quarter started rising.

2009

- Infosys Technologies has bagged a five-year outsourcing and support

agreement from BP where Infosys will manage and operate a largeportion of business systems for BP under the terms of the agreement.

The company has announced successful implementation of its first IT

enabled end-to-end business transformation program for Thermax.

- From December 2008 till April 2009, Infosys has fired over 2500 employees on

account of bad performance. The company has been hit hard by lower revenue

from a crisis hit European and North American market. On Aril 15, 2009 Infosys

reported its first ever sequential fall in its revenue in a decade during th

eM

arch

2009 quarter.

- In April 2009, Forbes rated Infosys among the 5 best performing companies in

the software and services sector in the world. In 2009, Infosys was considered one

of the Business Week's 50 Most Innovative Companies.

- Infosys eyes European firm; deal pegged at 300mn:

-V Balakrishnan, chief financial officer of Infosys, said: The global currency

markets continue to be extremely volatile, even though we have seen somestability in the rupee against the US dollar this quarter. We continue to focus on

high quality growth with superior margins. Our balance sheet has been further

strengthened with cash and cash equivalents reaching $2.8 billion.


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Inference:

The recovery from Global Recession helped company to gain its position again in

the market and it lead to increased value of bothBETA and R2.

2010

-Infosys Technologies finds itself in a sweet spot as recovery hopes take hold, with

customers showing a new urgency to outsource operations, its ChiefExecutive

said on 27TH

JAN.

-Aircel, Infosys team up to launchMobile Application Store 04 January 2010 | ByCBR Staff Writer

Claims to provide broad selection of relevant applications

-Infosys Offers Finacle Solutions For East African Banks 28 March 2010 | By CBR

Staff Writer

Infosys Technologies, a global provider of IT services, has offered Finacle 10 and

Finacle Financial Inclusion solution for banking transformation and power

innovation for banks inE

ast Africa.

-Finacle Joins Fincad Alliance Program 10 February 2010 | By CBR Staff Writer

Infosys Technologies, a global IT provider, revealed that its treasury solution

Finacle, has joined the Fincad Alliance Program, enabling it to access Fincads

derivatives analytics library for Finacle.

-Infosys Offers Finacle Solutions For East African Banks 28 March 2010 | By CBR

Staff Writer

Infosys Technologies, a global provider of IT services, has offered Finacle 10 andFinacle Financial Inclusion solution for banking transformation and power

innovation for banks in East Africa.


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Inference: This positive outlook from market has resulted in a increased value of

bothBETA and R2. This is also reflected by the increase in the value of market

price of the share.

Infosys Analysis

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