INFOSYS LTD-SP ADR (INFY) Stock Fundamental Analysis
NYSE:INFY - New York Stock Exchange, Inc. - US4567881085 - ADR - Currency: USD
INFY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 81 industry peers in the IT Services industry. INFY gets an excellent profitability rating and is at the same time showing great financial health properties. INFY has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
INFY had positive earnings in the past year.
In the past year INFY had a positive cash flow from operations.
INFY had positive earnings in 4 of the past 5 years.
INFY had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
INFY has a Return On Assets of 19.82%. This is amongst the best in the industry. INFY outperforms 98.77% of its industry peers.
With an excellent Return On Equity value of 31.32%, INFY belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
INFY has a Return On Invested Capital of 24.72%. This is amongst the best in the industry. INFY outperforms 98.77% of its industry peers.
The Average Return On Invested Capital over the past 3 years for INFY is significantly above the industry average of 10.72%.
The last Return On Invested Capital (24.72%) for INFY is above the 3 year average (24.61%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.82% | ||
| ROE | 31.32% | ||
| ROIC | 24.72% |
ROA(3y)18.98%
ROA(5y)18.54%
ROE(3y)30.36%
ROE(5y)28.35%
ROIC(3y)24.61%
ROIC(5y)22.98%
1.3 Margins
Looking at the Profit Margin, with a value of 17.28%, INFY belongs to the top of the industry, outperforming 92.59% of the companies in the same industry.
In the last couple of years the Profit Margin of INFY has declined.
With an excellent Operating Margin value of 20.92%, INFY belongs to the best of the industry, outperforming 96.30% of the companies in the same industry.
INFY's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 30.30%, INFY perfoms like the industry average, outperforming 41.98% of the companies in the same industry.
In the last couple of years the Gross Margin of INFY has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.92% | ||
| PM (TTM) | 17.28% | ||
| GM | 30.3% |
OM growth 3Y-5.66%
OM growth 5Y-2.17%
PM growth 3Y-3.94%
PM growth 5Y-1.73%
GM growth 3Y-4.81%
GM growth 5Y-2.88%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), INFY is creating value.
There is no outstanding debt for INFY. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
INFY has an Altman-Z score of 9.88. This indicates that INFY is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 9.88, INFY belongs to the best of the industry, outperforming 90.12% of the companies in the same industry.
The Debt to FCF ratio of INFY is 0.25, which is an excellent value as it means it would take INFY, only 0.25 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of INFY (0.25) is better than 90.12% of its industry peers.
INFY has a Debt/Equity ratio of 0.07. This is a healthy value indicating a solid balance between debt and equity.
INFY's Debt to Equity ratio of 0.07 is fine compared to the rest of the industry. INFY outperforms 74.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | 9.88 |
ROIC/WACC2.43
WACC10.18%
2.3 Liquidity
INFY has a Current Ratio of 2.13. This indicates that INFY is financially healthy and has no problem in meeting its short term obligations.
INFY's Current ratio of 2.13 is fine compared to the rest of the industry. INFY outperforms 69.14% of its industry peers.
INFY has a Quick Ratio of 2.13. This indicates that INFY is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.13, INFY is in the better half of the industry, outperforming 69.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.13 | ||
| Quick Ratio | 2.13 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.90% over the past year.
Measured over the past years, INFY shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.62% on average per year.
EPS 1Y (TTM)1.9%
EPS 3Y7.15%
EPS 5Y10.62%
EPS Q2Q%-11.13%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%6.52%
3.2 Future
The Earnings Per Share is expected to grow by 10.24% on average over the next years. This is quite good.
INFY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.24% yearly.
EPS Next Y13.65%
EPS Next 2Y12.07%
EPS Next 3Y10.24%
EPS Next 5YN/A
Revenue Next Year9.4%
Revenue Next 2Y9.39%
Revenue Next 3Y10.13%
Revenue Next 5Y8.24%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 21.24, the valuation of INFY can be described as rather expensive.
INFY's Price/Earnings ratio is a bit cheaper when compared to the industry. INFY is cheaper than 61.73% of the companies in the same industry.
INFY is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
INFY is valuated rather expensively with a Price/Forward Earnings ratio of 18.77.
Based on the Price/Forward Earnings ratio, INFY is valued a bit cheaper than the industry average as 65.43% of the companies are valued more expensively.
INFY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.24 | ||
| Fwd PE | 18.77 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, INFY is valued a bit cheaper than 65.43% of the companies in the same industry.
75.31% of the companies in the same industry are more expensive than INFY, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.31 | ||
| EV/EBITDA | 14.12 |
4.3 Compensation for Growth
INFY's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of INFY may justify a higher PE ratio.
PEG (NY)1.56
PEG (5Y)2
EPS Next 2Y12.07%
EPS Next 3Y10.24%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.90%, INFY has a reasonable but not impressive dividend return.
The stock price of INFY dropped by -23.83% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
INFY's Dividend Yield is rather good when compared to the industry average which is at 3.23. INFY pays more dividend than 95.06% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.57, INFY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
5.2 History
The dividend of INFY has a limited annual growth rate of 2.38%.
INFY has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of INFY decreased recently.
Dividend Growth(5Y)2.38%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
73.36% of the earnings are spent on dividend by INFY. This is not a sustainable payout ratio.
INFY's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP73.36%
EPS Next 2Y12.07%
EPS Next 3Y10.24%
16.14
-0.44 (-2.65%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners49.75%
Inst Owner Change0%
Ins Owners13.51%
Ins Owner ChangeN/A
Market Cap66.87B
Analysts77.39
Price Target23.6 (46.22%)
Short Float %2.86%
Short Ratio9.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
Yearly Dividend0.42
Dividend Growth(5Y)2.38%
DP73.36%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.55%
Min EPS beat(2)-5.96%
Max EPS beat(2)-1.14%
EPS beat(4)1
Avg EPS beat(4)4.68%
Min EPS beat(4)-5.96%
Max EPS beat(4)25.93%
EPS beat(8)1
Avg EPS beat(8)-0.04%
EPS beat(12)1
Avg EPS beat(12)-1.25%
EPS beat(16)3
Avg EPS beat(16)-1.38%
Revenue beat(2)0
Avg Revenue beat(2)-1.17%
Min Revenue beat(2)-1.53%
Max Revenue beat(2)-0.81%
Revenue beat(4)0
Avg Revenue beat(4)-1.76%
Min Revenue beat(4)-3.74%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-2.07%
Revenue beat(12)1
Avg Revenue beat(12)-1.86%
Revenue beat(16)2
Avg Revenue beat(16)-1.64%
PT rev (1m)-6.01%
PT rev (3m)-4.25%
EPS NQ rev (1m)-0.31%
EPS NQ rev (3m)-0.65%
EPS NY rev (1m)-0.09%
EPS NY rev (3m)-0.01%
Revenue NQ rev (1m)0.55%
Revenue NQ rev (3m)0.52%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.24 | ||
| Fwd PE | 18.77 | ||
| P/S | 3.57 | ||
| P/FCF | 17.31 | ||
| P/OCF | 16.29 | ||
| P/B | 6.47 | ||
| P/tB | 7.58 | ||
| EV/EBITDA | 14.12 |
EPS(TTM)0.76
EY4.71%
EPS(NY)0.86
Fwd EY5.33%
FCF(TTM)0.93
FCFY5.78%
OCF(TTM)0.99
OCFY6.14%
SpS4.52
BVpS2.5
TBVpS2.13
PEG (NY)1.56
PEG (5Y)2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.82% | ||
| ROE | 31.32% | ||
| ROCE | 34.03% | ||
| ROIC | 24.72% | ||
| ROICexc | 36.42% | ||
| ROICexgc | 45.17% | ||
| OM | 20.92% | ||
| PM (TTM) | 17.28% | ||
| GM | 30.3% | ||
| FCFM | 20.62% |
ROA(3y)18.98%
ROA(5y)18.54%
ROE(3y)30.36%
ROE(5y)28.35%
ROIC(3y)24.61%
ROIC(5y)22.98%
ROICexc(3y)33.44%
ROICexc(5y)32.07%
ROICexgc(3y)38.4%
ROICexgc(5y)37.07%
ROCE(3y)33.88%
ROCE(5y)31.63%
ROICexcg growth 3Y1.22%
ROICexcg growth 5Y-0.55%
ROICexc growth 3Y1.89%
ROICexc growth 5Y-0.96%
OM growth 3Y-5.66%
OM growth 5Y-2.17%
PM growth 3Y-3.94%
PM growth 5Y-1.73%
GM growth 3Y-4.81%
GM growth 5Y-2.88%
F-Score6
Asset Turnover1.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.25 | ||
| Debt/EBITDA | 0.15 | ||
| Cap/Depr | 44.24% | ||
| Cap/Sales | 1.29% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 91.89% | ||
| Profit Quality | 119.31% | ||
| Current Ratio | 2.13 | ||
| Quick Ratio | 2.13 | ||
| Altman-Z | 9.88 |
F-Score6
WACC10.18%
ROIC/WACC2.43
Cap/Depr(3y)56.75%
Cap/Depr(5y)69.81%
Cap/Sales(3y)1.66%
Cap/Sales(5y)2.14%
Profit Quality(3y)89.5%
Profit Quality(5y)94.84%
High Growth Momentum
Growth
EPS 1Y (TTM)1.9%
EPS 3Y7.15%
EPS 5Y10.62%
EPS Q2Q%-11.13%
EPS Next Y13.65%
EPS Next 2Y12.07%
EPS Next 3Y10.24%
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%6.52%
Revenue Next Year9.4%
Revenue Next 2Y9.39%
Revenue Next 3Y10.13%
Revenue Next 5Y8.24%
EBIT growth 1Y3.61%
EBIT growth 3Y8.7%
EBIT growth 5Y10.75%
EBIT Next Year21.21%
EBIT Next 3Y13.48%
EBIT Next 5Y11.37%
FCF growth 1Y71.02%
FCF growth 3Y1.48%
FCF growth 5Y11.42%
OCF growth 1Y61.38%
OCF growth 3Y1.47%
OCF growth 5Y9.73%