Infosys Ltd

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INFY : NYSE : Technology
$15.82 -0.15 | -0.91%
Today's Range: 15.76 - 15.92
Avg. Daily Volume: 5,020,900
09/26/16 - 10:40 AM ET

Financial Analysis


INFOSYS LTD's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. INFOSYS LTD is extremely liquid. Currently, the Quick Ratio is 3.17 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 7.25% 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.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)2501.02256.0
EBITDA ($mil)664.0592.0
EBIT ($mil)604.0543.0
Net Income ($mil)511.0476.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)4681.04537.0
Total Assets ($mil)11317.010587.0
Total Debt ($mil)0.00.0
Equity ($mil)9076.08462.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin38.7438.61
EBITDA Margin26.5426.24
Operating Margin24.1524.07
Sales Turnover0.860.83
Return on Assets18.4418.95
Return on Equity22.9923.71
Debt Q1 FY16 Q1 FY15
Current Ratio3.543.54
Debt/Capital0.00.0
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)2285.632285.61
Div / share0.210.23
EPS0.220.21
Book value / share3.973.7
Institutional Own % n/a n/a
Avg Daily Volume4991586.03310534.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 27.47 for the IT Services industry and a discount compared to the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 4.09 indicates a premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 8.10. 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
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
INFY 17.86 Peers 27.47   INFY 18.86 Peers 20.56

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.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

INFY is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
INFY 15.48 Peers 21.95   INFY 2.68 Peers 2.41

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.

 

Premium. 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 trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
INFY 4.09 Peers 8.10   INFY 3.11 Peers 21.96

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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
INFY 3.81 Peers 5.57   INFY 10.32 Peers 22.90

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 significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

INFY significantly trails its peers on the basis of sales growth

 

 

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