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Fundamental

St ck

Infosys Target Price Rs: 1238 Finacle, its banking product, which offers solutions to
address core banking, mobile banking and e-banking
Buy 500209 needs of retail, corporate and universal banks globally,
Value Parameters INFOSYSTECH and areas, such as cloud computing, enterprise mobility
and sustainability. On January 4, 2012, Infosys BPO
BSE Code Rs 1144 Limited acquired Portland Group Pty Ltd. In October
NSE Symbol Rs 5 2012, it acquired Lodestone Holding AG..The company
CMP (As on 01st Feb, 2018) also in the business segment of Financial Services,
Face Value 1221/860 Energy and utilities, Life Sciences and Healthcare,
52 Week High/Low 249,953 Consumer packaged goods and Logistics.
Market Cap (Rs cr) 72.99
EPS (TTM) 15.06 Investment Rationale
PE Ratio (x)
Strong demand for digitalisation, 8 large wins, 79 client
Shareholding Pattern % (Dec’ 17) additions in Q3FY18 are very good positives for Infosys
going ahead. Growth is expected to pickup in FY19.
Promoters Dlls FIIs Other Utilization increased from 81.9% to 84.9%. Infosys has
concluded an Advance Pricing Agreement (APA) with
12.90% the U.S. Internal Revenue Service (IRS). Under the APA,
Infosys and the IRS have agreed on the methodology
30.30% to allocate revenues and compute the taxable income of
the Company’s U.S. operations. This agreement covers
35.00% financial years from 2011 to 2021. The APA will enhance
predictability of Infosys’ tax obligations in respect of its
21.80% U.S. operations. In accordance with the APA, Infosys
has reversed tax provisions of approximately Rs 1,432
Company Overview crore made in previous periods which are no longer
required (both under International Financial Reporting
Infosys Limited, formerly Infosys Technologies Limited, Standards and Indian Accounting Standards). Further,
provides business consulting, technology, engineering on account of the APA methodology, Infosys expects its
and outsourcing services. Its end-to-end business overall effective tax rate to be lower by about 100 basis
solutions include consulting and systems integration points for future periods covered under the APA. This
comprising consulting, enterprise solutions, systems will increase Net Profit for Infosys.
integration and advanced technologies; business
information technology (IT) services consisting Outlook & Valuation
application development and maintenance, independent
validation services, infrastructure management, Even in weak Q3FY18 and after lot of head winds,
engineering services comprising product engineering and new management of Infosys has maintained its good
life cycle solutions and business process management; and stable run by maintaining its margins. We expect
products, business platforms and solutions, including Infosys to perform well in the coming quarter under the
new management and have assigned a PE of 16.5x to its
6 ARIHANT CAPITAL ¡ february 2018 FY19E EPS of Rs 75 and have arrived at fair value of Rs
1,238 per share.