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7/29/2019 Infosys Final 8 September
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Scenarios
Base case 1
management case 2
upside case 3
downside case 4
Base case 1
GROSS ADDS 2009A 2010A 2011E 2012E
Base case 40000 45000
management case 0 0
upside case 0 0
downside case 0 0
Base case 40000 45000
ATTRITION RATE 2009A 2010A 2011E 2012E
Base case 18% 19%
management case 0% 0%
upside case 0% 0%
downside case 0% 0%
Base case 18% 19%
Technical staff as % of total staff 2009A 2010A 2011E 2012E
Base case 93% 93%
management case 0% 0%upside case 0% 0%
downside case 0% 0%
Base case 93% 93%
Support staff as % of total staff 2009A 2010A 2011E 2012E
Base case 7% 7%
management case 0% 0%
upside case 0% 0%
downside case 0% 0%
Base case 7% 7%
ON SITE EFFORT MIX 2009A 2010A 2011E 2012E
Base case 23% 23%
management case 0% 0%
upside case 0% 0%
downside case 0% 0%
Base case 23% 23%
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OFF SITE EFFORT MIX 2009A 2010A 2011E 2012E
Base case 77% 77%
management case 0% 0%
upside case 0% 0%
downside case 0% 0%
Base case 77% 77%
UTILISTION RATE 2009A 2010A 2011E 2012E
Base case 74.0% 74.0%
management case 0.0% 0.0%
upside case 0.0% 0.0%
downside case 0.0% 0.0%
Base case 74.0% 74.0%
HOLIDAYS IN INDIA 2009A 2010A 2011E 2012E
Base case 25 25
management case 0 0
upside case 0 0
downside case 0 0
Base case 25 25
AVAILABLE HOURS PER DAY 2009A 2010A 2011E 2012E
Base case 8 8
management case 0 0upside case 0 0
downside case 0 0
Base case 8 8
AVAILABLE rate on site growth 2009A 2010A 2011E 2012E
Base case 1% 2%
management case
upside case
downside case
Base case 1% 2%
AVAILABLE rate offsite growth 2009A 2010A 2011E 2012E
Base case 1% 2%
management case
upside case
downside case
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Base case 1% 2%
RS./$ 2009A 2010A 2011E 2012E
Base case 46 46
management case
upside casedownside case
Base case 46 46
Software & BP expenses as % of revenue 2009A 2010A 2011E 2012E
Base case 53.5% 53.5%
management case
upside case
downside case
Base case 53.5% 53.5%
Selling and marketing as % of revenue 2009A 2010A 2011E 2012E
Base case 5.1% 5.1%
management case
upside case
downside case
Base case 5.1% 5.1%
General and administration as % of revenue 2009A 2010A 2011E 2012EBase case 7.2% 7.2%
management case
upside case
downside case
Base case 7.2% 7.2%
Effective Tax rate as % of revenue 2009A 2010A 2011E 2012E
Base case 22.0% 23.0%
management caseupside case
downside case
Base case 22.0% 23.0%
Pay out ratio as % of revenue 2009A 2010A 2011E 2012E
Base case 23.0% 24.0%
management case
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upside case
downside case
Base case 23.0% 24.0%
sundry debtors as % of revenue 2009A 2010A 2011E 2012E
Base case 15.0% 15.0%
management caseupside case
downside case
Base case 15.0% 15.0%
current liabilities as % of opex 2009A 2010A 2011E 2012E
Base case 15.5% 15.5%
management case
upside case
downside case
Base case 15.5% 15.5%
CAPEX as % of revenue 2009A 2010A 2011E 2012E
Base case 5.0% 4.5%
management case
upside case
downside case
Base case 5.0% 4.5%
Depreciation % of opening fixed assets 2009A 2010A 2011E 2012E
Base case 23.0% 23.0%
management caseupside case
downside case
Base case 23.0% 23.0%
Dividend received as % of investment 2009A 2010A 2011E 2012E
Base case 3.0% 3.0%
management case
upside case
downside caseBase case 3.0% 3.0%
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2013E
50000
0
0
0
50000
2013E
19%
0%
0%
0%
19%
2013E
93%
0%0%
0%
93%
2013E
7%
0%
0%
0%
7%
2013E
23%
0%
0%
0%
23%
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2013E
77%
0%
0%
0%
77%
2013E
74.0%
0.0%
0.0%
0.0%
74.0%
2013E
25
0
0
0
25
2013E
8
00
0
8
2013E
2%
2%
2013E
2%
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2%
2013E
46
46
2013E
53.5%
53.5%
2013E
5.1%
5.1%
2013E7.2%
7.2%
2013E
23.0%
23.0%
2013E
25.0%
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25.0%
2013E
15.0%
15.0%
2013E
15.5%
15.5%
2013E
4.0%
4.0%
2013E
23.0%
23.0%
2013E
3.0%
3.0%
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MODEL
March y/e 2009A 2010A 2011E
Opening headcount 91,187 104,850 113,796
Gross adds 28,231 27,639 40,000
Attrition 14,568 18,693 22,095Attrition Rate 14.9% 17.1% 18%
Net adds 13,663 8,946 17,905
closing headcount 104,850 113,796 131,701
% growth
Average headcount 98,019 109,323 122,749
Of which
Technical staff 97349 106864 122482
% of total headcounts 92.8% 93.9% 93%
Support staff 7501 6932 9219
% of total headcounts 7.2% 6.1% 7%
Average technical staff 97349 102107 114673
Effort mix
onsite 23.60% 22.60% 23%
off site 76.40% 77.40% 77%
Utilisation - including trainees (not on payroll) 68.60% 68.10% 74.0%
Days in year 365 365 365sat/sun 104 104 104
Holidays in india 25 25 25
Available days in a year 236 236 236
Available hours per day 8 8 8
Available hours per year 1888 1888 1888
Avearge rate onsite $ hour 73.2 74.6 75.4
% growth 2.0% 1%
Avearge rate offsite $ hour 25.8 25.5 25.7
% growth -1.20% 1%
Onsite revenue (mn $) 2178 2215 2778
% of total revenue 46.70% 46.10% 46.67%
off site revenue ( $mn) 2485 2589 3175
% of total revenue 53.30% 53.90% 53.33%
Total revenue ( $mn) 4663 4804 5953
% growth 3.02% 23.92%
Total revenue ( rs .cr) 21693 22742 27384
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% growth 4.84% 20.41%
INR / USD 46.52 47.34 46
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2012E 2013E
131,701 149,945
45,000 50,000
26,756 30,35619% 19%
18,244 19,644
149,945 169,589
140,823 159,767
139449 157718
93% 93%
10496 11871
7% 7%
130965 148583
23% 23%
77% 77%
74.0% 74.0%
366 365104 104
25 25
237 236
8 8
1896 1888
76.9 78.4
2% 2%
26.3 26.8
2% 2%
3250 3745
46.67% 46.67%
3714 4280
53.33% 53.33%
6964 8025
16.99% 15.23%
32036 36916
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16.99% 15.23%
46 46
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Profit & Loss statement
March Y/E - Rs crores 2009A 2010A 2011E 2012E 2013E
Total Revenue 21693 22742 27384 32036 36916
% growth 4.8% 20.4% 17.0% 15.2%
software & BP expenses 11765 12071 14651 17139 19750
% of revenue 54.2% 53.1% 53.5% 53.5% 53.5%
Selling and Marketing expenses 1104 1184 1397 1634 1883
% of revenue 5.1% 5.2% 5.1% 5.1% 5.1%
General and administration expenses 1629 1626 1972 2307 2658
% of revenue 7.5% 7.1% 7.2% 7.2% 7.2%
Opex 14498 14881 18019 21079 24290
% margin 66.8% 65.4% 65.8% 65.8% 65.8%
% growth 2.6% 21.1% 17.0% 15.2%
EBITDA 7195 7861 9365 10956 12625
% margin 33.2% 34.6% 34.2% 34.2% 34.2%
% growth 9.3% 19.1% 17.0% 15.2%
D & A 761 905 927 1029 1124
EBIT 6434 6956 8439 9928 11502
% margin 29.7% 30.6% 30.8% 31.0% 31.2%
% growth 8.1% 21.3% 17.6% 15.9%
Interest income 871 775 783 1110 1496
Dividend Received 5 106 111 111 111% of investments 2.9% 3.0% 3.0% 3.0%
Other income 38 23 0 0 0
Gains/(losses) on Fx -439 30 0 0 0
Provision for investments -2 9 0 0 0
income from sale on investments 0 48 0 0 0
Profit before tax 6907 7947 9333 11149 13109
TAX expense 919 1681 2053 2564 3015
% tax rate 13.3% 21.2% 22.0% 23.0% 23.0%
net income 5988 6266 7280 8585 10094
% margin 27.6% 27.6% 26.6% 26.8% 27.3%
Basic weighted avg shares (cr) 57.2 57.2 57.2 57.2 57.2
Diluted weighted avg shares (cr) 57.3 57.1 57.1 57.1 57.1
Basic EPS 104.6 109.5 127.3 150.1 176.5
% growth 4.7% 16.2% 17.9% 17.6%
DILUTED EPS 104.5 109.7 127.5 150.3 176.8
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% growth 5.0% 16.2% 17.9% 17.6%
Dividends 1345 1434 1674 2060 2523
Payout ratio 22.5% 22.9% 23.0% 24.0% 25.0%
Retained Earnings 4643 4832 5606 6524 7570
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Benchmarking
2011E 2012E 2013E
Revenue (Rsm)
Consensus 272945 327649.7 385467
IRFM estimates 273842 320355 369155Difference 0.3% -2.2% -4.2%
EBITDA ( rs m)
Consensus 91615 108212 127080
IRFM estimates 93654 109562 126251
Difference 2.2% 1.2% -0.7%
EBIT
Consensus 82192.3 97220.7 113833
IRFM estimates 84385.02 99275.24 115015
Difference 2.7% 2.1% 1.0%
Net Income
Consensus 70024 83663.3 99695
IRFM estimates 72799.01 85846.18 100939
Difference 4.0% 2.6% 1.2%
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TAKEN FROM BLOOMBERG
FACTSET
capitaline
thomson reuters
factiva
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Balance sheet
March y/e Rs crores 2009A 2010A 2011E 2012E 2013E
fixed asstes (PP&E) 6,404 6,923 8,292 9,734 11,210
Acc Dep 2,416 2,893 3,820 4,849 5,972
Work in progress 677 409 409 409 409Tangible assets 4,665 4,439 4,881 5,294 5,647
Goodwill 689 916 916 916 916
Investments 0 3,712 3,712 3,712 3,712
Deferred tax Assets 163 432 432 432 432
Sundry Debtors 3,672 3,494 4,108 4,805 5,537
Cash balance 9,695 10,556 15,555 21,444 28,427
Loans and advances 3,279 4,187 4,187 4,187 4,187
Current Assets 16,646 18,237 23,850 30,436 38,151
Total Assets (A) 22,163 27,736 33,791 40,790 48,858
Current Liabilities 2,004 2,343 2,793 3,267 3,765
Provisions 1,868 2,112 2,112 2,112 2,112
Short term borrowings / Revolver 0 0 0
Toatl Current Liabilities 3,872 4,455 4,905 5,379 5,877
Deferred tax liability 37 232 232 232 232
Share capital 286 286 286 286 286
Reserves and surplus 17,968 22,763 28,369 34,893 42,463Shareholders equity 18,254 23,049 28,655 35,179 42,749
Total liabilities + capital (B) 22,163 27,736 33,791 40,790 48,858
Difference 0 0 0 0 0
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Working Capital
March y/e Rs crores 2009A 2010A 2011E 2012E 2013E
Sundry debtors 3672 3494 4108 4805 5537
% of revenue 16.9% 15.4% 15.0% 15.0% 15.0%
Loans and Advances 3279 4187 4187 4187 4187Current liabilities 2004 2343 2793 3267 3765
% of OPEX 13.8% 15.7% 15.5% 15.5% 15.5%
Provisions 1868 2112 2112 2112 2112
Working capital (WC) 3079 3226 3390 3613 3847
Change in WC ( cash impact ) -147 -164 -223 -234
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Cash Flow Statement
March y/e RS crores 2009A 2010A 2011E 2012E
EBIT 6434 6956 8439 9928
ADD : Depreciation 761 905 927 1029
Add/Less: changes in WC 0 -147 -164 -223Net cash flow from operating activities 7195 7714 9202 10733
Interest income 871 775 783 1110
Dividend income 5 106 111 111
Servicing of financing 876 881 895 1221
Capex ( capital exp.) 0 0 1369 1442
Taxes paid 919 1681 2053 2564
Dividend Paid 1345 1434 1674 2060
Free cash flow 5807 5480 4999 5888
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2013E
11502
1124
-23412391
1496
111
1607
1477
3015
2523
6983
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30-Aug-12
FIXED ASSETS & CAPEX
March Y/e Rs. Crores 2009A 2010A 2011E
Capex ( excluding WIP) 1974 943 1369
% of revenue 4.1% 5.0%
Opening net FA (excl goodwill and WIP) 3,988 4030
Additions 943 1369
Depreciation charge 761 905 927
Closing net FA (excl goodwill and WIP) 3,988 4,030 4472
Acc Dep 2,416 2,893 3820
Closing gross FA (excl goodwill and WIP) 6,404 6,923 8292
Depreciation charge WDV 905 927
Depreciation % of opening fixed assets 22.7% 23.0%
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2012E 2013E
1442 1477
4.5% 4.0%
4472 4885
1442 1477
1029 1124
4885 5238
4849 5972
9734 11210
1029 1124
23.0% 23.0%
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Debt Schedule
March Y/e Rs crores 2009A 2010A 2011E 2012E
Short term borrowings
Beginning balance
(repayment)New Borrowings
Closing balance
Average
Interest Expense
Cash Balance
Beginning balance 10,556 15,555
Free cash flow generated 4999 5888
Movement in bank Overdraft / revolver 0 0
Closing balance 10,556 15,555 21,444
Average 13,056 18,500
Interest income 6% 783 1110
Minimun cash requirement 0 0
bank Overdraft / revolver
Beginning balance 0 0
(repayment) 0 0
New Borrowings 0 0
Closing balance 0 0 0
Average 0 0
Interest Expense 0% 0 0
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2013E
21,444
6983
0
28,427
24,935
1496
0
0
0
0
0
0
0
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DCF
(In INR cr.)
Fiscal Year End 31 December 2011E 2012E
Net Income 7,280 8,585
Allowable D&A 927 1029
Capital Expenditures -1369 -1442Change in Working Capital -164 -223
Free Cash Flow to Equity 6,674 7,948
Growth
Years Discounted 1 2
Discount Factors 0.88 0.78
Discounted Cash Flows 5906.103848 6224.743355
Valuation Parameters
Cost Of Equity 13%
Terminal Growth Rate 6%
2016E Normalized Free Cash Flow 9,860
Terminal Value 149303.5
Discounted Terminal Value 103474.8
Dicounted Cash Flows 18719.43
Equity Value 122194.2
Implied Share Price(INR) 2129.561
Shares Outstanding 57.38
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2013E norm assumption for normalized year:
10,094 10,094 capex and D&A are exactly same
1124 1477
-1477 -1477-234 -234
9,507 9,860
3 3
0.69 0.69
6588.583461
Implied Multiples Implied S
Growth Ra
EV/EBITDA 2129.561 4% 5% 6%
2011 2012 11% 2205.026 2537.078 3001.951
111,638 106,639 12% 1922.181 2166.793 2492.942
11.9x 9.7x 13% 1702.358 1889.26 2129.561
14% 1526.646 1673.555 1857.192
EV/EBIT 15% 1383.009 1501.126 1645.491
2011 2012
111,638 106,639
13.2x 10.7x
CostOfEquity
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ith opposite signs
are Prices
es
7% 8%
3699.26 4861.443
2949.551 3634.464
2449.963 2898.526
2093.296 2408.102
1825.948 2057.964
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