Mehabe score: 3 G Factor: 3 Piotski Score: 8 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 8.
Description
Infosys Limited is a provider of consulting, technology, and next-generation digital services, enabling clients to execute strategies for their digital transformation. They help their clients in the digitization of processes, migration to cloud-based technologies, workplace transformation, business model transformation, enhanced cybersecurity controls, and cost structure optimization in IT. It was incorporated in Pune, their head office is in Karnataka. It has a presence in 46 countries across 220 locations.[1][2][3] Site:INFY Main Symbol:INFY
Stock trades at 1749.0, below its 50dma 1810.23. However it is trading above its 200dma 1699.23. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 1810.23.
The 52 week high is at 1953.90 and the 52week low is at 1311.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 27.24%
– has been maintaining a healthy dividend payout of 54.29%
Weakness
– Stock is trading at 9.63 times its book value
-Promoter holding is low: 13.12%
Competition
– The industry trades at a mean P/E of 34.8x. L & T Infotech trades at the industry’s max P/E of 49.62x. INFY trades at a P/E of 33.3x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 8.0. INFY has a G-Factor of 3 and Piotski scoreof 8.
– Average 1 month return for industry is -4.4%. The max 1- month return was given by TCS: a return of 0.52 %
Quarterly Results
Sales for period ended Mar 2022 is Rs 32276.0 cr compared to Rs 26311.0 cr for period ended Mar 2021, a rise of 22.7% .
vis-vis 7271.0 for period ended Mar 2021 .
Operating Margins contracted -332.6 bps for period ended Mar 2022 vis-vis Mar 2021.
Company reported operating profit of Rs 7846.0 cr for period ended Mar 2022 and operating profit margin at 24.3 % for same period.
The EPS for quarter ended Mar 2022 is Rs 13.52 compared to Rs 13.81 for previous quarter ended Dec 2021 and Rs 11.91 for Mar 2021.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 121641.0 cr for period ended Mar 2022 vis-vis sales of Rs 100472.0 cr for the period ended Mar 2021, a healthy growth of 17.4%. The 3 year sales cagr stood at 13.7%.
Operating margins shrank to 26.0% for period ended Mar 2022 vis-vis 28.0% for period ended Mar 2021, contraction of 200.0 bps.
Net Profit reported at Rs 22110.0 cr for period ended Mar 2022 vis-vis sales of Rs 19351.0 cr for the period ended Mar 2021, rising 12.5%.
Company recorded a healthy Net Profit CAGR of 12.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 29.0% compared to 27.0% over the last 3 Years. – The stock has given a return of 25% on a 1 Year basis vis-vis a return of 33% over the last 3 Years. – The compounded sales growth on a TTM bassis is 21% vis-vis a compounded sales growth of 14% over the last 3 Years. – The compounded profit growth on a TTM basis is 15% vis-vis a compounded profit growth of 13% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 33.17% vis-vis 33.46% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 37.06% vis-vis 37.41% for Sep 2021
Conclusion
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 27.24%
– has been maintaining a healthy dividend payout of 54.29% – Stock is trading at 9.63 times its book value
-Promoter holding is low: 13.12%
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 1810.23 and is trading at 1749.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
