Annual Report Analysis
The Infosys Annual Report 2007-08 contains a human touch with the key theme being various company initiatives towards attracting, training, retaining and empowering talent. FY08 was another watershed year for Infosys with robust business performance (industry-leading dollar growth), judicious expenditure management and strengthened financial position. Infosys, the behemoth, continues to move from strength to strength. Our analysis of the Annual Report revealed following interesting findings.
ä Income Statement – robust growth and unparalleled size and profitability
ä Special dividend and increase in payout ratio reflects company’s confidence in growth
ä Balance Sheet – strong, debt-free and highly liquid
ä Superior return ratios generate positive EVA
ä Cash Flows – more than sufficient to cover growth, dividends and contingencies
ä Corporate Governance – leading across industries
ä Re-organization to sustain competitiveness
However, we maintain SELL on Infosys as current valuations are above fair value. Our target price of Rs1,670 represents 10% downside.
The Infosys Annual Report 2007-08 contains a human touch with the key theme being various company initiatives towards attracting, training, retaining and empowering talent. FY08 was another watershed year for Infosys with robust business performance (industry-leading dollar growth), judicious expenditure management and strengthened financial position. Infosys, the behemoth, continues to move from strength to strength. Our analysis of the Annual Report revealed following interesting findings.
ä Income Statement – robust growth and unparalleled size and profitability
ä Special dividend and increase in payout ratio reflects company’s confidence in growth
ä Balance Sheet – strong, debt-free and highly liquid
ä Superior return ratios generate positive EVA
ä Cash Flows – more than sufficient to cover growth, dividends and contingencies
ä Corporate Governance – leading across industries
ä Re-organization to sustain competitiveness
However, we maintain SELL on Infosys as current valuations are above fair value. Our target price of Rs1,670 represents 10% downside.
