-0.24 | -0.55%
INFOSYS LTD's gross profit margin for the fourth quarter of its fiscal year 2012 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. INFOSYS LTD is extremely liquid. Currently, the Quick Ratio is 5.26 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.
During the same period, stockholders' equity ("net worth") has increased by 11.48% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.
| Income Statement | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Net Sales ($mil) | 1938.0 | 1771.0 |
| EBITDA ($mil) | 0.0 | 578.0 |
| EBIT ($mil) | 457.0 | 529.0 |
| Net Income ($mil) | 444.0 | 463.0 |
| Balance Sheet | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Cash & Equiv. ($mil) | 4341.0 | 4121.0 |
| Total Assets ($mil) | 8539.0 | 7537.0 |
| Total Debt ($mil) | 0.0 | 0.0 |
| Equity ($mil) | 7331.0 | 6576.0 |
| Profitability | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Gross Profit Margin | 34.93 | 44.04 |
| EBITDA Margin | 0.0 | 32.63 |
| Operating Margin | 23.58 | 29.87 |
| Sales Turnover | 0.87 | 0.93 |
| Return on Assets | 20.2 | 22.76 |
| Return on Equity | 23.53 | 26.09 |
| Debt | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Current Ratio | 5.62 | 6.34 |
| Debt/Capital | 0.0 | 0.0 |
| Interest Expense | 0.0 | 0.0 |
| Interest Coverage | 0.0 | 0.0 |
| Share Data | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Shares outstanding (mil) | 571.4 | 571.4 |
| Div / share | 0.0 | 0.0 |
| EPS | 0.78 | 0.81 |
| Book value / share | 12.83 | 11.51 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 2183302.0 | 2139044.0 |
HOLD. The current P/E ratio indicates a significant discount compared to an average of 24.79 for the IT Services industry and a discount compared to the S&P 500 average of 19.08. Conducting a second comparison, its price-to-book ratio of 3.33 indicates a premium versus the S&P 500 average of 2.44 and a significant discount versus the industry average of 7.89. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, INFOSYS LTD proves to trade at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| INFY 14.15 | Peers 24.79 | INFY NA | Peers 24.32 | |||||||||||||||||||||
|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. INFY is trading at a significant discount to its peers. |
Neutral. The P/CF ratio is the stock’s price divided by the sum of the company's cash flow from operations. It is useful for comparing companies with different capital requirements or financing structures. Ratio not available. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| INFY 13.83 | Peers 17.46 | INFY NM | Peers 1.48 | |||||||||||||||||||||
|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. INFY is trading at a discount to its peers. |
Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. INFY's negative PEG ratio makes this valuation measure meaningless. |
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| Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
| INFY 3.33 | Peers 7.89 | INFY 0.66 | Peers 38.53 | |||||||||||||||||||||
|
Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. INFY is trading at a significant discount to its peers. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, INFY is expected to significantly trail its peers on the basis of its earnings growth rate. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| INFY 3.30 | Peers 4.23 | INFY 5.77 | Peers 5.98 | |||||||||||||||||||||
|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. INFY is trading at a discount to its industry on this measurement. |
Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share. INFY is keeping pace with its peers on the basis of sales growth. |
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