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GDP-annual rate of 8.90% 3rd quarter of 2010
Inflation rate:-last reported 9.7 % in Oct-2010
Interest Rate:-reverse repo reported @5.5 %.
Trade deficit 9118.0 Millions in Sept-2010 Tax rate India 30% ,less than Spain ,
France etc Saving rate -35.7%
Macro Economic Indicator
YEARRATIOS
March 08 March 09 March 10
Current Ratio 4.28 4.71 3.30
Quick Ratio 4.20 4.67 3.28
Gross profit Ratio 31.04 30.66 28.23
Net profit Ratio 26.31 27.52 27.37
Asset turnover Ratio 5.59 3.39 3.47
Dividend per share ratio 25.00 23.50 33.25
Reported EPS 101.30 101.58 78.15
Infosys Ratio
Indian IT Industry The IT-BPO industry is estimated to
aggregate revenues of US$ 73.1 billion in FY2010, with the IT software and services industry accounting for US$ 63.7 billion of revenues.
Accounts for a 5.19% of the country's GDP Direct/indirect employment to 2.3 million
people 2.3 million employment India's outsourcing industry is expected to
increase to US$225 billion by 2020
Threat of Substitutes:(Medium)◦Other offshore locations e.g Philippines◦ Price of projects is a major differentiator, the
quality of products being same. RIVALRY AMONG FIRMS: High
◦ 'low-cost, little-differentiation‘ positioning.◦ high industry growth◦ Strong competitors◦ few numbers of large companies.
Porter 5 forces
Bargaining power of supplier:(high)◦Availability of vast talent pool – fresher's and
experienced.
Bargaining Power of Customers (very high)◦Large number of IT companies vying for IT projects –
resulting in high competition for projects.◦ Huge decline in IT expenditure :
Barriers to Entry(low)◦ Low capital requirements.◦ Large value chain
Intrinsic value =EPS*(P/E Ratio) EPS=101.30 P/E Ratio=32.42
◦ Intrinsic value=3284.14◦ Market Value=3254.10
-Market Value>Intrinsic value Buy shares of infosys
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