4QFY2016 Result Update | IT
April 25, 2016
Infosys
ACCUMULATE
CMP
`1,214
Performance highlights
Target Price
`1,378
(` cr)
4QFY16
3QFY16
% chg (qoq) 4QFY15
% chg (yoy)
Investment Period
12 Months
Net revenue
16,550
15,902
4.1
13,411
23.4
EBITDA
4,589
4,328
6.0
3,716
23.5
EBITDA margin (%)
27.7
27.2
51bp
27.7
2bp
Stock Info
PAT
3,597
3,465
3.8
3,097
16.1
Sector
IT
Source: Company, Angel Research
Market Cap (` cr)
278,815
For 4QFY2016, Infosys posted revenues of US$2,454mn (V/s US$2,446mn
Net Debt (` cr)
(30,250)
expected), up 1.6% qoq. In constant currency (CC) terms, the growth is of
Beta
0.8
~1.9%. Volume growth during the period is of 2.4% qoq. On the operating
52 Week High / Low
1,268/933
front, the EBIT margin came in at 25.5% vs our expectation of 25.2% and vs
Avg. Daily Volume
224,062
24.9% in 3QFY2016, ie an expansion of 60bp qoq. The utilization levels
Face Value (`)
5
(including trainees) improved to 74.7% V/s 74.2% in 3QFY2016, while the
BSE Sensex
25,838
attrition rate was of 17.3% V/s 18.1% in 3QFY2016. The company posted a net
Nifty
7,899
profit of `3,597cr (V/s `3,634cr expected), up 3.8% qoq. For FY2017, the
Reuters Code
INFY.BO
company has given a revenue guidance at 11.5%-13.5% in CC terms and
Bloomberg Code
[email protected]
11.8%-13.8% in US$ terms at March 31, 2016 exchange rates. We maintain our
Accumulate rating on the stock with a target price of `1,378.
Quarterly highlights: For 4QFY2016, Infosys posted revenues of US$2,454mn
Shareholding Pattern (%)
(V/s US$2,446mn expected), up 1.6% qoq. In constant currency (CC) terms, the
Promoters
12.8
growth is of ~1.9%. Volume growth during the period is of 2.4% qoq. In terms of
MF / Banks / Indian Fls
18.0
geography, North America grew 0.5% sequentially and by 0.6% in CC terms,
FII / NRIs / OCBs
58.6
while Europe grew 2.4% sequentially and by 3.6% in CC terms. In terms of
Indian Public / Others
10.5
industries, FSI grew by 0.2%, MFG & Hi-Tech grew by 0.8%, RCL grew by 2.7%
and ECS grew by 4.9%, all in CC terms. On the operating front, the EBIT margin
came in at 25.5% vs our expectation of 25.2% and vs 24.9% in 3QFY2016, an
Abs.(%)
3m 1yr
3yr
expansion of 60bp qoq. The company posted a net profit of `3,597cr (V/s
Sensex
5.7
(7.4)
34.8
`3,634cr expected), up 3.8% qoq.
Infosys
6.9
13.5
116.3
Outlook and valuation: For FY2017, the company has given a revenue guidance
at 11.5%-13.5% in CC and 11.8%-13.8% in US$ terms at March 31, 2016
3-year price chart
exchange rates. It gave a guidance of achieving sales of US$20bn by FY2020.
We maintain our Accumulate rating on the stock.
Key financials (Consolidated, IFRS)
Y/E March (` cr)
FY2015
FY2016
FY2017E
FY2018E
Net sales
53,319
62,441
70,558
79,731
% chg
6.4
17.1
13.0
13.0
Adj. net profit
12,330
13,491
14,999
16,657
% chg
13.5
9.4
11.2
11.1
EBITDA margin (%)
27.9
27.4
27.5
27.5
EPS (`)
53.7
59.0
65.3
72.5
Source: Company, Angel Research
P/E (x)
22.6
20.6
18.6
16.7
P/BV (x)
5.1
4.5
4.1
3.8
RoE (%)
22.5
21.8
22.2
22.4
RoCE (%)
20.8
20.7
22.3
23.2
Sarabjit kour Nangra
EV/Sales (x)
4.6
3.9
3.4
3.0
+91 22-39357800 Ext: 6806
EV/EBITDA (x)
16.6
14.4
12.4
10.8
[email protected]
Source: Company, Angel Research; Note: CMP as of April 22, 2016
Please refer to important disclosures at the end of this report
1
Infosys | 4QFY2016 Result Update
Exhibit 1: 4QFY2016 performance (IFRS, consolidated)
(` cr)
4QFY16
3QFY16
% chg (qoq)
4QFY15
% chg (yoy)
FY2016
FY2015
% chg (yoy)
Net revenue
16,550
15,902
4.1
13,411
23.4
62,441
53,319
17.1
Cost of revenue
9,893
9,621
2.8
7,907
25.1
37,689
32,081
17.5
Gross profit
6,657
6,281
6.0
5,504
20.9
24,752
21,238
16.5
SG&A expenses
2,068
1,953
5.9
1,788
15.7
7,723
6,604
16.9
EBITDA
4,589
4,328
6.0
3,716
23.5
17,029
14,634
16.4
Depreciation
369
369
-
267
38.2
1,409
802
75.7
EBIT
4,220
3,959
6.6
3,449
22.4
15,620
13,832
12.9
Other income
771
802
(3.9)
880
(12.4)
3,122
3,427
PBT
4,991
4,761
4.8
4,329
15.3
18,742
17,259
8.6
Income tax
1,394
1,296
7.6
1,232
13.1
5,251
4,929
6.5
Exceptional item
-
-
-
(3)
(1)
Reported PAT
3,597
3,465
3.8
3,097
16.1
13,494
12,329
9.4
Adjusted PAT
3,597
3,465
3.8
3,097
16.1
13,491
12,329
9.4
EPS
15.7
15.2
3.8
13.6
16.2
59.0
54.0
9.4
Gross margin (%)
40.2
39.5
73bp
41.0
(82)bp
39.6
39.8
(19)bp
EBITDA margin (%)
27.7
27.2
51bp
27.7
2bp
27.3
27.4
(17)bp
EBIT margin (%)
25.5
24.9
60bp
25.7
(22)bp
25.0
25.9
(93)bp
PAT margin (%)
21.7
21.8
(6)bp
23.1
(136)bp
21.6
23.1
(152)bp
Source: Company, Angel Research
Exhibit 2: 4QFY2016 - Actual Vs Angel estimates
(` cr)
Actual
Estimate
% Var.
Net revenue
16,550
16,568
(0.1)
EBITDA margin (%)
27.7
27.4
30
PAT
3,597
3,634
(1.0)
Source: Company, Angel Research
Revenues just in line of expectation
For 4QFY2016, Infosys posted revenue of US$2,454mn (V/s US$2,446mn
expected), up 1.6% qoq. In rupee terms, revenues grew by 4.1% qoq to `16,550cr
(V/s `16,568cr expected), led by rupee deprecation. In CC terms, growth is of
~1.9%. Volume growth during the period is of 2.4% qoq.
In terms of geography, North America grew 0.5% sequentially and 0.6% in CC,
Europe grew 2.4% sequentially and 3.6% in CC, India grew 9.1% sequentially and
11.1% in CC, while RoW grew by 4.0% sequentially and 3.2% in CC.
In terms of industries, FSI declined by 0.3% sequentially and grew by 0.2% in CC,
MFG & Hi-Tech grew by 1.0% sequentially and 0.8% in CC, RCL grew by 2.4%
sequentially and 2.7% in CC and ECS grew by 4.6% sequentially and 4.9% in CC.
April 25, 2016
2
Infosys | 4QFY2016 Result Update
Exhibit 3: Trend in volume growth qoq (Effort wise)
8
6.6
6
5.4
4.9
4.4
3.7
4
3.7
3.5
3.1
2.5
2.7
2.3
2.4
2.1
2
0.9
0.4
0
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Offshore
Onsite
Total volume growth
Source: Company, Angel Research
Exhibit 4: Trend in volume and USD revenue growth (qoq)
8
6.9
7
6
5.4
5
4.4
4
3.1
3
2.4
3.7
2
1.9
1
1.1
0
0.9
(1)
(0.4)
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Revenue growth (constant currency)
Volume growth
Source: Company, Angel Research
Industry-wise, revenue from FSI, the company’s anchor vertical which contributed
by 32.8% to revenues, grew by 0.3% qoq; in CC terms, revenue from FSI grew by
0.2% qoq. The Manufacturing industry vertical, which contributed by 22.7% to
revenues, grew by 1.0% qoq. In CC terms, the revenue from this vertical grew by
0.8% sequentially.
The Retail, CPG and Logistics segment (RCL; contributed by 24.5% to revenues)
reported a 2.4% QoQ growth. In CC terms, the revenue from RCL grew by 2.7%
QoQ. The Energy Utilities and Communications & Services segment (contributed
by 20.0% to revenue) reported a growth of 4.6% QoQ in revenue, with Energy and
Utilities posting the biggest fall among verticals of 4.9% QoQ.
April 25, 2016
3
Infosys | 4QFY2016 Result Update
Exhibit 5: Growth trend in industry segments (Reported basis)
Particulars
% to revenue
% growth qoq
% growth yoy
FSI
32.8
(0.5)
10.6
Banking and financial services
27.4
0.9
14.1
Insurance
5.4
(7.0)
(4.4)
Manufacturing
22.7
1.2
8.1
RCL
24.5
2.5
18.1
Retail and CPG
15.0
3.7
12.5
Transport and logistics
1.8
(3.7)
27.5
Life Sciences
5.7
(0.1)
26.6
Healthcare
2.0
7.0
33.3
ECS
20.0
4.8
18.6
Energy and utilities
5.2
3.6
30.9
Communication and services
8.6
9.2
17.4
Others
6.2
0.0
11.5
Source: Company, Angel Research
In terms of geographies, revenue from North America grew by 0.6% qoq in CC
terms, while other geographies such as Europe grew by 3.6% qoq and RoW grew
by 3.2% qoq (both in CC terms). India posted a 11.1% qoq growth in CC terms.
Exhibit 6: USD growth trend in geographies qoq (CC basis)
12
9.7
10
8.3
8
7.1
6.2
6
5.1
3.9
3.6
4
3.2
2
1.2
0.5
0.6
0.1
0.3
0
(0.4)(0.3)
(2)
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
North America
Europe
Rest of the world
Source: Company, Angel Research
April 25, 2016
4
Infosys | 4QFY2016 Result Update
Hiring and utilization
Infosys added 9,034 gross employees in 4QFY2016, of which 5,266 were lateral
additions. The net addition number for the quarter stood at 8,372. Attrition (for
standalone entity) cooled off in 4QFY2016; it decreased to 17.3% (LTM) vs 18.1%
in 3QFY2016. The level of attrition in the company which had been on a continues
rise, came down during the quarter. The company is trying to inch up its utilization
level, which could act as one of the margin levers.
Exhibit 7: Employee metrics
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Gross addition
14,471
11,889
17,595
14,027
9,034
Net addition
6,549
3,336
8,453
8,620
8,372
Gross lateral emp. addition
8,334
5,886
7,452
6,115
5,266
Attrition - LTM basis (%)*
18.4
19.2
19.9
18.1
17.3
Source: Company, Angel Research, Note-* excluding subsidiaries
With the company focusing on improving its utilization level, the utilization rate
including trainees grew by 50bp qoq to 74.7% (higher than 74.2% as in
3QFY2016); while excluding trainees, it de-grew by 50bp qoq to 80.1%.
Exhibit 8: Trend in utilization (Services and Consulting + Projects)
83
81.3
80.6
80.2
80.1
81
78.6
79
77
75
75.7
75.4
73
74.7
74.2
72.8
71
69
67
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Including trainees
Excluding trainees
Source: Company, Angel Research
Margins expand
On the operating front, the EBIT margin came in at 25.5% (vs our expectation of
25.2%) vs 24.9% in 3QFY2016, up 60bp qoq, owing to Rupee deprecation and
lower subcontracting costs.
April 25, 2016
5
Infosys | 4QFY2016 Result Update
Exhibit 9: Trend in EBIT margin
200
26
25.7
25.5
150
25.5
150
100
25
50
24.9
60
0
24.0
(60)
(50)
24
(100)
(100)
(170)
(150)
(200)
23
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
Margin movement (qoq)
EBIT margin (%)
Source: Company, Angel Research
Client pyramid
Infosys added 89 new clients (gross additions) during the quarter, taking its
total active client base to 1092. The client addition was across the board. The
company added 8 clients in the US$100-200mn bracket. Also, the company
bagged new deals with TCV of US$757mn, during the quarter. TCV of deal wins
for FY2016 is US$2.8bn, which is 42% higher than in FY2015.
Exhibit 10: Client metrics
Particulars
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Top client (% of revenue)
3.5
3.7
3.7
3.5
3.6
Gross Client addition
52
79
82
75
89
Active client
950
987
1011
1045
1092
US$1mn-5mn
285
287
284
294
290
US$5mn-10mn
85
87
89
90
91
US$10mn-20mn
76
78
84
82
89
US$20mn-50mn
36
34
35
23
32
US$50mn-100mn
18
21
19
15
17
US$100mn-200mn
14
14
17
7
8
US$200mn-300mn
11
8
8
5
5
US$300mn plus
0
1
1
1
1
Source: Company, Angel Research
Concall Highlights
Infosys won deals worth TCV of US$757mn during the quarter.
The Management guided for FY2017 yoy CC revenue growth of 11.5%-
13.5%. The guidance implies a qoq growth rate of 2.95-3.7% over the course
of FY2017 Vs 3.55% demonstrated in FY2016.
The Board recommended a final dividend of `14.25/share.
April 25, 2016
6
Infosys | 4QFY2016 Result Update
Investment arguments
Strong Revenue guidance for FY2017: The Management has guided towards
higher revenue growth for FY2017, ie of 11.5-13.5% in CC terms and 12.7-14.7%
in INR terms on the basis of exchange rate as on March 31, 2016. For FY2016,
the company posted a 13.3% growth in CC terms V/s a guidance of 12.8-13.2%
growth (in CC). We expect the company to post ~13.0% USD revenue growth in
FY2017. The company expects to lead industry growth and reach a milestone of
achieving sales of US$20bn by FY2020. Currently, we have factored in moderate
growth for FY2017 (INR and USD growth of 13.0%).
Aims to be US$20bn company by FY2020: The Management believes the
traditional IT services model is dying and a structural change is taking place in the
industry. Pricing pressure is being witnessed in commoditized services, thus
necessitating the company to pursue newer growth avenues including acquisitions
in areas like automation. The outsourcing services provider is therefore looking to
ramp up its productivity through automation and is looking for acquisitions to
boost growth. Infosys' cash and cash equivalents were at US$5.2bn as at the end
of March 2015.
The company expects its revenue to rise to US$20bn by FY2020, from US$8.7bn
now, as it focuses on acquisitions and on winning more new technology services,
implying a 14% CAGR over the period. Over the near term, we expect Infosys to
post a 13.0% USD revenue growth in FY2017. Over FY2016-18E, we expect USD
and INR revenue to grow at a CAGR of 13.0% and 13.0%, respectively.
Operating margin likely to be range bound in near term: Going ahead, given a
stable rupee, higher S&M spends, and wage hikes in FY2017, we expect the EBIT
margin to remain at 25.1% in FY2017 and FY2018 (V/s 25.0% in FY2016). Over
FY2016-18E, we expect an EBIT CAGR of 13.2%. However, as part of its `Vision
2020’ (target to have US$20bn revenues at
30% operating margins and
US$80,000 per employee revenue productivity by CY2020), the Management
expects acceleration in revenue growth and margin improvement to reflect ahead
of the increase in revenue productivity.
Outlook and valuation
The company has upgraded its USD revenue growth guidance for FY2017 to 11.5-
13.5% on CC basis. We expect the company to post ~13.0% USD revenue growth
in FY2017. It aims to reach a milestone of achieving sales of US$20bn by FY2020.
Also, the company plans to utilize cash properly through increased dividends and
acquisitions, so that it can increase its capital efficiency. The stock trades at current
valuations of 16.7x FY2018E earnings. We recommend an Accumulate on the
stock with a price target of `1,378.
April 25, 2016
7
Infosys | 4QFY2016 Result Update
Exhibit 11: Key assumptions
Parameters
FY2017E
FY2018E
Revenue growth - USD terms (%)
13.0
13.0
USD-INR rate
65.7
65.7
Revenue growth - INR terms (%)
13.0
13.0
EBITDA margin (%)
27.5
27.5
Tax rate (%)
28.0
28.0
EPS growth (%)
11.2
11.1
Source: Company, Angel Research
Exhibit 12: One-year forward PE (x)
2,000
1,750
1,500
1,250
1,000
750
500
250
0
Price
26x
22x
18x
14x
10x
Source: Company, Angel Research
Exhibit 13: Recommendation summary
Company
Reco
CMP Tgt. price
Upside
FY2017E FY2017E
FY2015-17E
FY2017E FY2017E
(`)
(`)
(%)
EBITDA (%)
P/E (x)
EPS CAGR (%)
EV/Sales (x)
RoE (%)
HCL Tech
Buy
845
1,038
22.8
21.5
14.6
5.9
2.0
18.8
Infosys
Buy
1,214
1,378
13.5
27.5
18.6
10.6
3.4
22.2
TCS
Buy
2,417
2,854
18.1
28.5
17.5
11.8
3.5
38.9
Tech Mahindra
Buy
480
530
10.4
17.0
14.3
10.8
1.3
19.1
Wipro
Buy
558
680
21.6
23.8
13.7
9.7
1.8
17.7
Source: Company, Angel Research
Company Background
Infosys is the second largest IT company in India, employing over
1,857,776
professionals (as of FY2016). The company services more than 1000 clients across
various verticals, such as financial services, manufacturing, telecom, retail and
healthcare. Infosys has the widest portfolio of service offerings amongst Indian IT
companies, spanning across the entire IT service value chain - from traditional
Application Development and Maintenance to Consulting and Package
Implementation to Products and Platforms.
April 25, 2016
8
Infosys | 4QFY2016 Result Update
Profit and loss statement (IFRS, consolidated)
Y/E March (` cr)
FY2013
FY2014
FY2015
FY2016
FY2017E FY2018E
Net sales
40,352
50,133
53,319
62,441
70,558
79,731
Cost of revenue
24,158
30,767
31,817
37,595
36,338
41,061
Gross profit
16,194
19,366
21,502
24,846
27,871
31,494
% of net sales
40.1
38.6
40.3
39.8
39.5
39.5
Selling and mktg exp.
2,034
2,625
2,941
3,431
3,881
4,385
% of net sales
5.0
5.2
5.5
5.5
5.5
5.5
General and admin exp.
2,609
3,107
3,663
4,292
4,586
5,183
% of net sales
6.5
6.2
6.9
6.9
6.5
6.5
EBITDA
11,551
13,634
14,898
17,123
19,404
21,926
% of net sales
28.6
27.2
27.9
27.4
27.5
27.5
Dep and amortization
1,122
1,374
1,066
1,503
1,693
1,914
% of net sales
2.8
2.7
2.0
2.4
2.4
2.4
EBIT
10,429
12,260
13,832
15,620
17,710
20,012
% of net sales
25.8
24.5
25.9
25.0
25.1
25.1
Other income
2,359
2,669
3,427
3,122
3,122
3,122
Profit before tax
12,788
14,929
17,259
18,742
20,832
23,134
Provision for tax
3,367
4,062
4,929
5,251
5,833
6,478
% of PBT
26.3
27.2
28.6
28.0
28.0
28.0
PAT
9,421
10,648
12,330
13,491
14,999
16,657
Exceptional item
-
219
-
-
-
-
Adj. PAT
9,421
10,867
12,330
13,491
14,999
16,657
EPS (`)
41.0
47.3
53.7
59.0
65.3
72.5
April 25, 2016
9
Infosys | 4QFY2016 Result Update
Balance sheet (IFRS, consolidated)
Y/E March (` cr)
FY2013
FY2014
FY2015
FY2016
FY2017E FY2018E
Current assets
Cash and cash equivalents
21,832
25,950
30,367
32,697
38,252
42,626
Available for sale financial assets
1,739
2,197
874
75
75
75
Investment in certificates of deposit
-
859
93
103
103
103
Trade receivables
7,083
8,351
9,713
11,330
11,854
13,395
Unbilled revenue
2,435
2,811
2,845
3,029
3,029
3,029
Derivative financial instruments
101
215
101
116
116
116
Prepayments and other current assets
2,123
2,636
3,296
4,448
4,092
4,624
Total current assets
35,313
43,019
47,289
51,798
57,521
63,968
Non-current assets
Property, plant and equipment
6,468
7,887
9,125
10,530
10,730
10,930
Goodwill
1,976
2,157
3,091
3,764
2,157
2,157
Intangible assets
368
342
638
985
342
342
Available for sale financial assets
394
1,252
1,345
1,811
1,252
1,252
Deferred income tax assets
503
656
537
536
656
656
Income tax assets
1,092
1,522
4,089
5,230
5,230
5,230
Other non-current assets
237
220
238
735
1,632
1,632
Total non-current assets
11,038
14,036
19,063
23,591
21,999
22,199
Total assets
46,351
57,055
66,352
75,389
79,520
86,167
Current liabilities
Trade payables
189
173
140
386
173
173
Derivative financial instruments
-
-
3
5
-
-
Current income tax liabilities
1,329
2,187
2,818
3,410
3,787
3,787
Client deposits
36
40
27
28
40
40
Unearned revenue
823
660
1,052
1,332
660
660
Employee benefit obligations
614
954
1,069
1,341
954
954
Provisions
213
379
478
512
379
379
Other liabilties
3,082
4,745
5,796
6,225
5,545
5,545
Total current liabilities
6,286
9,138
11,383
13,239
11,538
11,538
Non-current liabilities
Deferred income tax liabilties
119
64
160
256
64
64
Employee benefit obligations
149
323
46
115
323
323
Other liabilities
-
-
-
-
-
-
Total non-current liabilities
268
387
206
371
387
387
Total liabilities
6,554
9,525
11,589
13,610
11,925
11,925
Equity
Share capital
286
286
572
1,144
1,144
1,144
Share premium
3,090
3,090
3,090
2,241
2,241
2,241
Retained earnings
36,114
43,584
50,531
57,655
63,640
70,286
Other components of equity
307
570
570
739
570
571
Total equity
39,797
47,530
54,763
61,779
67,595
74,242
Total liabilties and equity
46,351
57,055
66,352
75,389
79,520
86,167
April 25, 2016
10
Infosys | 4QFY2016 Result Update
Cash flow statement (IFRS, consolidated)
Y/E March (` cr)
FY2013
FY2014
FY2015
FY2016 FY2017E FY2018E
Pre tax profit from operations
10,429
12,260
13,832
15,620
17,710
20,012
Depreciation
1,122
1,374
1,066
1,503
1,693
1,914
Pre tax cash from operations
11,551
13,634
14,898
17,123
19,404
21,926
Other income/prior period ad
2,359
2,669
3,427
3,122
3,122
3,122
Net cash from operations
13,910
16,303
18,325
20,245
22,526
25,048
Tax
3,367
4,062
4,929
5,251
5,833
6,478
Cash profits
10,543
12,241
13,396
14,994
16,693
18,570
(Inc)/dec in current assets
(2,464)
(2,271)
(1,942)
(2,968)
(168)
(2,073)
Inc/(dec) in current liabilties
1,520
2,852
2,245
1,856
(1,701)
-
(Inc)/dec in net trade WC
(944)
581
303
(1,112)
(1,869)
(2,073)
Cashflow from operating actv.
9,599
12,822
13,699
13,882
14,823
16,497
(Inc)/dec in fixed assets
(2,181)
(2,793)
(2,304)
(2,908)
(1,893)
(2,114)
(Inc)/dec in investments
(1,362)
(1,317)
2,089
789
-
-
(inc)/dec in sale of financial assets
(382)
(858)
(93)
(466)
559
-
(Inc)/dec in deferred tax assets
(242)
(583)
(2,448)
(1,140)
(120)
-
Inc/(dec) in other non current liab.
147
119
(181)
165
16
-
(Inc)/dec in other non current ass.
(1,253)
(138)
(1,248)
(1,517)
1,353
-
Cashflow from investing actv.
(5,273)
(5,570)
(4,185)
(5,077)
(85)
(2,114)
Inc/(dec) in debt
-
-
-
-
-
-
Inc/(dec) in equity/premium
(280)
1,099
450
889
(1,489)
(1,486)
Dividends
2,805
4,233
5,547
7,364
7,695
8,523
Cashflow from financing actv.
(3,085)
(3,134)
(5,097)
(6,475)
(9,184) (10,010)
Cash generated/(utilised)
1,241
4,118
4,417
2,330
5,555
4,374
Cash at start of the year
20,591
21,832
25,950
30,367
32,697
38,252
Cash at end of the year
21,832
25,950
30,367
32,697
38,252
42,626
April 25, 2016
11
Infosys | 4QFY2016 Result Update
Key ratios
Y/E March
FY2013
FY2014
FY2015
FY2016
FY2017E
FY2018E
Valuation ratio (x)
P/E
29.6
25.6
22.6
20.6
18.6
16.7
P/CEPS
26.4
22.8
20.8
18.6
16.7
15.0
P/BVPS
7.0
5.9
5.1
4.5
4.1
3.8
Dividend yield (%)
0.9
1.3
1.5
2.0
2.7
3.0
EV/Sales
6.3
5.0
4.6
3.9
3.4
3.0
EV/EBITDA
22.1
18.3
16.6
14.4
12.4
10.8
EV/Total assets
5.5
4.4
3.7
3.3
3.0
2.7
Per share data (`)
EPS
41
47
54
59
65
73
Cash EPS
46
53
58
65
73
81
Dividend
11
16
19
25
33
36
Book value
173
207
239
269
294
323
Dupont analysis
Tax retention ratio (PAT/PBT)
0.7
0.7
0.7
0.7
0.7
0.7
Cost of debt (PBT/EBIT)
1.2
1.2
1.2
1.2
1.2
1.2
EBIT margin (EBIT/Sales)
0.3
0.2
0.3
0.3
0.3
0.3
Asset turnover ratio (Sales/Assets)
0.9
0.9
0.8
0.8
0.9
0.9
Leverage ratio (Assets/equity)
1.2
1.2
1.2
1.2
1.2
1.2
Operating ROE
23.7
22.4
22.5
21.8
22.2
22.4
Return ratios (%)
RoCE (pre-tax)
22.5
21.5
20.8
20.7
22.3
23.2
Angel RoIC
45.8
43.7
39.5
36.7
43.1
46.2
RoE
23.7
22.9
22.5
21.8
22.2
22.4
Turnover ratios(x)
Asset turnover (fixed assets)
3.7
3.6
2.8
2.6
3.2
3.6
Receivables days
86
81
86
84
77
75
April 25, 2016
12
Infosys | 4QFY2016 Result Update
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited and Metropolitan Stock Exchange of India Limited. It is also registered as a Depository Participant with
CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is
a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates including its relatives/analyst do not hold any financial interest/beneficial
ownership of more than 1% in the company covered by Analyst. Angel or its associates/analyst has not received any compensation /
managed or co-managed public offering of securities of the company covered by Analyst during the past twelve months. Angel/analyst
has not served as an officer, director or employee of company covered by Analyst and has not been engaged in market making activity
of the company covered by Analyst.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
Note: Please refer to the important ‘Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the
latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates may
have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement
Infosys
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors
Ratings (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
over 12 months investment period):
Reduce (-5% to -15%)
Sell (< -15)
April 25, 2016
13