Saturday, January 06, 2007

Infosys (INFY) Analysis

We looked at Infosys almost a year back. Since then, the stock has gained about 50% and has been added to the Nasdaq 100. Let us look at Infosys now and see how things look like for the next year.

Infosys (INFY) is a Indian multinational specializing in software services and off shoring. It is a top Indian company with a market cap of 30 billion. In this segment, we will look at the company and its financials. The overview of the company is as follows:

Infosys Technologies Limited (Infosys) has branches in China, Australia as well as in the U.S. The company provides services for every aspect of software development lifecycle from design and implementation as well as maintenance.

The revenue mix for Infosys for the first six months of 2006 is as follows. US contributed 64% to the revenues, Europe contributed 26% and India contributed 1.6%. Rest of the world contributed 8.7% to the revenue mix. This compares to 2005 mix of 64.6% for US, Europe 23.6%, India 1.9%, rest of the world 9%.

Infosys's net income increased 43% year over year and the share price has jumped by more than 50%. Our estimate of the revenue growth has been soundly been trounced - the strong revenue growth shows the continued strength in the outsourcing business.

The Infosys stock price has grown strongly on the back of strong Indian equity market. The stock price is a bit rich for ones taste at the moment and one can expect more sedate returns from the stock in 2007.


Anonymous said...

Thanks for the analysis, what do u hold currently?. What are looking to drop from the portfolio?. What are looking to add positions into?.

Keep up the great work !!!!

changpeng05 said...

I havent sold any of my positions. I added some at last years May/June bottom when the price seemed good.

I am not buying anything at the moment, just accumulating cash so it can be invested when the right opportunity arises.


Devyani said...

Why do you think INFY is/isn't better than WIT?

Anonymous said...

Havent looked at WIT in detail. Will do so soon.

Dan Menashi said...

I guess Infy is great buy at the $50 to $53 range.Look at the call options for Apr, Jul they look good for strike price $55 and $60 too.This means that people are optimistic about it in short term.

If you are interested in knowing more about outsourcing industry then click below.