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8/10/2019 Market Wire
1/19
Marketwire
Selling cheapValuations seem to have reached a low of 2008-09 once again andconsidering the current levels of the market, its quite astonishing
By Research Desk | Sep 6, 2013
The Indian stock market crrently seems to !e nder"aled, e"en more than the !ad
times o# 200$%0&' The BS(%)00 inde*, +hich represents more than &0 per cent o# the
Indian stock market, is trading at a price to !ook "ale o# 2'2 +hich is st 1) per cent
a!o"e the lo+ o# 1'& dring the crisis o# 200$%0&' -t o# the )00 companies on the
inde*, 1&. are trading !elo+ their !ook "ale' This is signi#icantly higher considering the
crrent le"el o# the market +hich is the highest nm!er at this le"el o# the inde* /as
Stock Analyst Choice
strong !ackingIndraprastha as will !enefit from competitive prices, wide distri!ution
network and e"pertise from its parent companies
By arn ha!!a | Sep 6, 2013
Incorporated in 1&&$ throgh a oint "entre !et+eenI4, Bharat 5etrolem and the
Delhi o"ernment, Indraprastha as 4imited /I4 is engaged in retail gas distri!tion
!siness #or spply o# 7 to transport sector and 57 to domestic, indstrial andcommercial sectors in Delhi and 7ational apital Region' It is also engaged in the
man#actre o# 7' rrently, I4 has 2&0 7 stations, o"er 3,&0,000 residential
cstomers, &22 commercial cstomers and 801 indstrial cstomers'
Strengths
gas prchase agreement +ith its promoter, I4, ensres a constant spply o# gas at
http://www.valueresearchonline.com/story/archive.asp?sec=53http://www.valueresearchonline.com/story/archive.asp?sec=76http://www.valueresearchonline.com/stocks/snapshot.asp?code=1263http://www.valueresearchonline.com/stocks/snapshot.asp?code=1263http://www.valueresearchonline.com/stocks/snapshot.asp?code=525http://www.valueresearchonline.com/stocks/snapshot.asp?code=15728http://www.valueresearchonline.com/story/archive.asp?sec=53http://www.valueresearchonline.com/story/archive.asp?sec=76http://www.valueresearchonline.com/stocks/snapshot.asp?code=1263http://www.valueresearchonline.com/stocks/snapshot.asp?code=525http://www.valueresearchonline.com/stocks/snapshot.asp?code=157288/10/2019 Market Wire
2/19
competiti"e prices that is essential #or the gro+th o# the company' This agreement also
ensres priority spply o# gas in case o# any disrption in spply'
*9irm allocation o# gas #or the region allo+s I4 to sell 7 at one o# the lo+est retail
price in the contry and still protect its margins
*The company does not ha"e any competition and enoys a premim position in the
region it operates in' It is the sole spplier o# 7 and 57 in Delhi, 7oida, reater
7oida and ha:ia!ad, and plans to promote +ider sage o# gas #or "arios applications
throgh co%generation, gas geysers, gensets, etc'
*The price di##erence !et+een 7 and petrol +ill contine to dri"e the large scale
con"ersion o# petrol%dri"en "ehicles to 7 mode' s o# no+, 7 o##ers arond 11%1)
per cent sa"ings o"er other #els, ths making it a pre#erred choice
*9rther, more and more atomo!ile companies are introdcing 7 "ariants +ith
pre%#itted kits to tap the gro+th opportnity +hich is !ond to increase the demand #or
7
*57 is emerging as a key sorce o# energy #or commercial and indstrial sage' ;ith
increasing prices o# 45 and restrictions on the nm!er o# cylinders, more and more
hoseholds are no+ keen to shi#t on to 57' This pro"ides ample opportnity #or I4 in
#tre
Growth drivers
I4 has a ro!st in#rastrctre o# 7 stations and pipeline net+orks that ensres easy
a"aila!ility to its cstomers' The company has already sho+n its e*pertise in de"elopingand rolling ot city gas distri!tion net+orks in 7R and this gi"es it an edge to tap any
#rther gro+th opportnities in ne+er areas'
*I4 has a long%term gas sale contract +ith its largest cstomer Delhi Transport
orporation, +hich acconts #or nearly 20 per cent o# I4
8/10/2019 Market Wire
3/19
commercial segment #or #rther e*panding its 57 net+ork
*R47 prices are at its peak' ny #rther correction in the prices or crrency
appreciation +ill make 57 competiti"e as compared to #rnace oil
Financials
7 is the maor component that contri!tes to I4
8/10/2019 Market Wire
4/19
e"ident #rom the graph
!elo+ and the highlighted
line representing the
crrent le"el'
#lick the image to e"pand$
Equity Student
6 hours ago
The +rite%p has not toched pon the DamocleAs S+ord hanging o"er the heads o# all
listednlisted D entities in the contryC the reglatory o"erhang' rnning !attle is on
!et+een I4 and 57RB and the Spreme ort is yet to gi"e its #inal "erdict' =y sincere
ad"ice to all potential in"estors in this other+ise one%o#%its kind D player, +hose sccess
+old !e di##iclt to replicate in other parts o# the contry, is to +ait #or the dgment
!e#ore making the mo"e'
Interview
ood Time to In"estVina% &aharia of 'eligare Invesco shares his investment philosoph% and the
rationale !ehind his picks
http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528#comment-1034070475http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/archive.asp?sec=62http://www.valueresearchonline.com/story/images/fullscreen/20130906_selling%20cheap_big.pnghttp://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528#comment-1034070475http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/archive.asp?sec=628/10/2019 Market Wire
5/19
By arn ha!!a | g 2&, 2013
inay 5aharia, 9nd =anager, Religare In"esco =tal 9nd, shares his in"estment
philosophy and the rationale !ehind his picks' ?e e*plains +hy the mid% and small%cap
space is still attracti"e and ho+ in"estors shold approach in the crrent scenario'
Your funds Religare Invesco Mid Capand Religare Invesco Mid N Small
Caphave performed etter than the categor!" #hich stoc$s or strateg!
would !ou attriute to this and the rationale ehind those pic$s%
-r strategy is consistent %% +e #ollo+ a !ottom%p in"estment approach' The retrns
are a #nction o# the stocks +e o+n !t the identi#ication o# stocks and consistency is a
reslt o# the in"estment process' sing or in"estment process +e identi#y companies
+ith !etter gro+th traectory and healthy capital retrn ratios' These #orm the core o#
the port#olio +hich has a gro+th !ias'
#hat is !our investment philosoph!% &re there an! sectors !ou prefer
investing in and what do !ou generall! avoid%
;e only in"est in companies that meet the stock selection principles as laid ot in or
in"estment process' ;e look at !oth @alitati"e and @antitati"e #actors' key
@antitati"e parameter +hich +e tend to #ollo+ is retrn on capital' ;e tend to !y into
companies +hich ha"e demonstrated long%term retrn on capital signi#icantly higher
than the cost o# capital +hich +e internally ha"e set at 1) per cent' To that e*tent, +e
emphasise more on historical per#ormance and less on #orecasts' -# corse, +e do look
at the #tre i# +e think that the #tre is going to !e materially di##erent than the past
and there is potential #or change' Bt or process and e*perience emphasise on the #act
http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=4280http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=6675http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=6675http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=4280http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=6675http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=66758/10/2019 Market Wire
6/19
that history pro"ides s "ala!le insight +hich #rther helps s a"oid or redce
mistakes'
Secondly, a corollary o# high retrns to capital is that the company shold ha"e less
le"erage on its !alance sheet' This scenario is an atomatic reslt o# high retrn on
capital' I# yo ha"e high retrns on capital, the !siness +old atomatically generate
high cash #lo+ and as a reslt o# that yo +old ha"e lo+er le"erage'
In case o# the @alitati"e parameters, +e tend to look at the management @ality' ;e
also look at a company
8/10/2019 Market Wire
7/19
in"estment argment on a #actal !asis rather than getting opinions #rom the
management'
#hat advice would !ou give to an investor% Should the! invest in the mid(
and small(cap space right now%
I +old say that #or an in"estor +ho +ants to in"est in e@ity, the in"estment in case o#
mid%caps is al+ays a!ot asset allocation' I# yo +ere in"esting in e@ity, yo +old
enter into the asset +ith the e*pectation that o"er a long period o# time this asset class
shold deli"er retrns in line +ith the nominal D5 gro+th rate' 7o+ +ithin e@ity,
depending on the in"estor
8/10/2019 Market Wire
8/19
they isse de!it cards that yo can se to !y goods yo +ant to !y' >o may not ha"e
realised, thogh, that yo can also sa"e money !y !anking smartly'
There are se"eral types o# !ank acconts that yo can opt #or depending on yor needsE
#or instance, a !sinessman +ill pre#er a crrent accont compared to a salaried
indi"idal +ho +ill need a sa"ings !ank accont'
Savings )an$ &ccount
Sa"ings !ank acconts are meant to promote the ha!it o# sa"ing among people +hile
allo+ing them to se their #nds +hen re@ired' The main ad"antage o# a sa"ings !ank
accont is its high li@idity, sa#ety and a moderate interest on the sa"ings'
Capital rotection
The capital in a sa"ings !ank accont is not completely sa#e' Balance in the accont
inclding interest earned, is insred p to a ma*imm o# Rs 1 lakh' This sm is insred
!y the Deposit Insrance and redit arantee orporation /DI #or all commercial
!anks, inclding the !ranches o# #oreign !anks #nctioning in India, local area !anks
and regional rral !anks' In case o# co%operati"e !anks, yo +ill need to check i# it is
co"ered nder the DI !ecase i# a !ank has not !een paying the premim #or the
insrance scheme #or three consecti"e years, it ceases to !e insred'
Investment +,ective and Ris$s
The sa"ings !ank accont is the traditional home #or cash sa"ings' Today, a sa"ings !ank
accont is a necessity and is an essential component o# an indi"idalAs #inances' The
most important reason to open an accont is the atomatic access that it o##ers to other#inancial instrments sch as in"estments, loans and sa"ings' The sa"ings !ank accont
o##ers se"eral other #acilities and #eatres that one shold e*plore to make optimm se
o# cash #lo+s'
Inflation rotection
sa"ings !ank accont does not pro"ide protection against in#lation, +hich means
+hene"er in#lation is a!o"e the rate that a sa"ings !ank accont earnsE the accont
earns no real retrns'
GuaranteesThe interest rate in a sa"ings !ank is garanteed p to the #irst Rs 1 lakh !alance in the
accont' This rate "aries across !anks since the Reser"e Bank o# India dereglated the
sa"ings !ank deposit interest rate on -cto!er 2), 2011' Banks are no+ #ree to determine
the interest on the !alance in a sa"ings !ank accont, +hich has to !e ni#orm #or all
8/10/2019 Market Wire
9/19
types o# acconts p to Rs 1 lakh in an accont !t "aries #or acconts +ith a higher
!alance'
-i.uidit!
The sa"ings !ank accont is highly li@id and one can +ithdra+ cash #rom oneAs accont
#rom the !ranch dring the !anking hors' Today, the T= allo+s 28%hor +ithdra+als
+ithin limits in a single day +hich "aries across !anks and also depending on the
accont type' ;hen settling payments throgh real time gross settlement /RTS
#eatreE transactions are possi!le #rom &'00 = to 8'30 5= on +eekdays and #rom &'00
= to 1'30 5= on Satrdays #or real time settlement'
/0it +ption
>o can close the !ank accont on any day +ithin the !anking hors'
+ther Ris$s
Balance, inclding interest in an accont a!o"e Rs 1 lakh, is e*posed to the risk o# a !ank
#olding p' 7one o# the p!lic sector !anks ha"e #olded p in India, +hich is not the case
#or co%operati"e !anks' =ake sre yo are choosing a !ank +hich has strong credentials
and is sa#e'
Credit Rating
-pening a sa"ings !ank accont does not entail credit rating'
1a0 Implications
Interest earned in the sa"ings !ank accont p to Rs 10,000 per annm is ta* e*empt
#rom 2012%13' Interest amont a!o"e this limit is treated as income and ta*edaccordingly' The interest earned is ta*a!le nder the head AIncome #rom other sorcesA'
Going +nline
It goes !y many names, sch asC online !anking, Internet !anking, 5 !anking, home
!anking, and electronic !anking' =ost allo+ yo to access yor accont online +hich is
con"enient and yo can control yor accont #rom any+here' -nline !anking permits
yo to pay !ills online, trans#er money !et+een acconts, online shopping, and access
accont in#ormation at any time and manage di##erent types o# acconts +ith a
particlar !ank'-nline !anking opens a ne+ +indo+ to yor #inancesE yo can in"est in stocks, !y
insrance, pay rene+al premims, and recharge yor mo!ile phone, pay credit card !ills
and e"en pay ta*es depending on the #acilities o##ered !y yor !ank'
Is online an$ing safe%
-nline !anking takes secrity "ery seriosly and ses encryption technology to protect
8/10/2019 Market Wire
10/19
8/10/2019 Market Wire
11/19
T= cm de!it card in most instances' -ne can isse mlti%city che@es at no
additional costs'
Sweep(in or Multiplier &ccountpro"ides the li@idity o# a sa"ings accont copled
+ith high interest earnings o# a #i*ed deposit +hich is achie"ed throgh a #i*ed%deposit
linked to the sa"ings accont' The !alance in this accont is ne"er idle' 9i*ed deposit/s
#rom the srpls #nds in yor sa"ings !ank accont s!ect to a minimm !alance as
stiplated !y a !ank is created in mltiples o# sms stiplated !y the !ank #or tenre o#
one year or more as instrcted and pro"ides ma*imm retrns' The accont also
pro"ides ma*imm li@idity' ll linked #i*ed deposits are ena!led #or atomatic re"erse
s+eep in mltiples as stiplated !y the particlar !ank on a last%in%#irst%ot /4I9-
!asis +hen the !alance in the sa"ings accont #alls !elo+ the speci#ied minimm sm'
This +ay the amont that is re"ersed earns interest rates applica!le #or the period that
the deposit +as held +ith the !ank' 9eatres "ary across !anks and also depend on the
!ankAs relationship +ith the corporate client' Ser"ice ta* at 12'36 per cent is applica!le
on #acilities o##ered +ith this accont'
Miscellaneous &ccountscater to di##erent target grops !y !ndling #eatres likeC
5ri"ilege !ankingC o##ers additional ser"ices #or a #ee or on maintaining higher minimm
!alance
hildrenAs ccontC targeted at children, they can operate this accont !ased on pre%set
conditions !y the parent or gardian
ccont #or ;omenC Targeted at +omen +ith special #eatres sch as pri"ilege cardsand special disconts
Senior iti:en ccontC imed at those a!o"e 60 years, the accont o##ers access to
special conters in the !ank !ranch !esides additional interest on deposits and lo+ or
no minimm !alance maintenance re@irements
'ow to open an &ccount
-nce yo ha"e selected the !ank to open an accont yo +ill need the #ollo+ing
docmentsC
F n accont opening #orm +hich the !ank +ill pro"ideF T+o passport si:e photographs
F ddress and identity proo# sch as copy o# the passport, 57 /permanent accont
nm!er card or declaration in #orm 7o 60 or 61 as per the Income Ta* ct 1&61, dri"ing
license, "oterAs ID or ration card
8/10/2019 Market Wire
12/19
F arry original identity proo# #or "eri#ication at the time o# accont opening
F These days, yo can also also open an online accont +ithot "isiting the !ank !ranch
'ow to operate an &ccount%
>o need a pay%in slip +ith the initial accont opening sm to !e credited into yor
accont' >o get a sa"ing !ank pass!ook +ith yor photo a##i*ed stating the nominee'
?o+e"er, some !anks, especially pri"ate and #oreign !anks do not isse a pass!ook and
instead deli"er an accont statement' The Sa"ings !ank rles can also !e read in the
pass!ook'
1!pes of 1ransactions
ash, he@e, Demand dra#t, =oney trans#er and (S
The oint accont holders can gi"e any o# the #ollo+ing mandates #or the disposal o#
!alance, +hich can !e modi#ied !y the consent o# all the accont holders'
F (ither or Sr"i"orC I# the accont is held !y t+o indi"idals say, and B, the #inal
!alance along +ith applica!le interest +ill !e paid to the sr"i"or on death o# any one o#
the accont holders'
F nyone or Sr"i"or/sC I# the accont is held !y more than t+o indi"idals say, , B
and , the #inal !alance along +ith interest, i# applica!le, +ill !e paid to the sr"i"or on
death o# any t+o accont holders'
oints to onder
F 5enalties +hen the !alance #alls !elo+ the minimm stiplated sm
F 5enalty +hen che@es are retrnedF ollection #acilities o##ered and applica!le charges
Details o# charges, i# any #or isse o# che@e !ooks and limits #i*ed on nm!er o#
+ithdra+als and cash dra+ings
Stockwire
Do+n, !t not ot)ew stocks have witnessed e"cessive selling !ut ma% still offer a possi!le
opportunit% for investors
http://www.valueresearchonline.com/story/archive.asp?sec=13http://www.valueresearchonline.com/story/archive.asp?sec=138/10/2019 Market Wire
13/19
By Research Desk | g 30, 2013
=arkets, at least in the short%term, are anything !t rational' In"estors, or rather
speclators, go o"er!oard on !oth sides that is, either sending the share prices rocketing
or a!soltely crashing a stock' Bt these anomalies tend to e"en ot in the long%term aslong as the #ndamentals o# a company are intact'
;e ha"e a #e+ sch instances +hich ha"e
+itnessed e*cessi"e selling !t may still o##er a possi!le opportnity #or in"estors to
enter the stock'
1ata Coffee
The company is the largest co##ee prodcer and e*porter o# India'
rrent priceC R&3&
)2%+eek high priceC R1,6.))2%+eek lo+ priceC R$$0
Discont to )%year 5( /in GC 1)
Reasons for Fall
*The company #aced slo+do+n in 9>13 de to a #all in e*ports cased !y +eak glo!al
prices
*o##ee e*ports o# the company +ere 8,$31 tonnes in 9>13 as compared to ),.3) tonnes
in 9>12
*India
8/10/2019 Market Wire
14/19
)2%+eek high priceC R313
)2%+eek lo+ priceC R200
Discont to )%year 5( /in GC 1.
Reasons for Fall
*Increase in the import dty to $ per cent
*The changes in gold importing norms dictate that all imports +ill ha"e to !e made on a
cash margin
*7o credit +ill !e allo+ed #or importing gold #or domestic se' This +old increase
costs #or importing #or the company' The changes came de to a high demand #or gold
+hich +as ad"ersely a##ecting India
8/10/2019 Market Wire
15/19
largest tyre man#actrer in the +orld, it +old also gi"e the company a +ider range o#
prodcts in the replacements market and +old psh its prodcts in di##erent
geographies
*The glo!al replacement market took a dip in 2012 !t is e*pected to gro+ this year and
+ith more strength in de"eloping markets
*7o+ e"en thogh pollo Tyres +ill ha"e greater reach, there are concerns that the
com!ined cash #lo+ #rom the companies +ill !e a!le to pay o## the interest costs !t not
pay o## the principal' It remains to !e seen +hether pollo Tyres can cope +ith the ne+
si:e and take ad"antage #rom the position
Infos!s
The company is one o# the #irst esta!lished and the second%largest IT company in the
contry' ItAs still !elo+ its median 5( and cold o##er opportnities #or in"estment'
rrent priceC R3,120
)2%+eek high priceC R3,123
)2%+eek lo+ priceC R2,1&0
Discont to )%year 5( /in GC 10
Reasons for Fall
*In#osys has !een #acing margin pressres o"er the past #e+ @arters
*5ro!lems #or the company started +hen it re"amped its !siness model +ith the 3'0
strategy +hich meant #or it to pro"ide !siness trans#ormational soltions and not st
so#t+are ser"ices' This thogh came at the +rong time as +ith the #inancial crisis,companies +ere more intent on sa"ing +hat they had than on #rther e*pansion
*The company +as also adamant to not chase lo+ margin contracts +hich at a time o#
+eak discretionary IT spends came to hit the company hard' Its ri"al, TS, thogh did
e*actly the opposite and :oomed ahead
*The #inal stra+ +as dra+n +hen it missed its 2013 re"ene estimates and the share
price reacted +ith a 21 per cent crash
Reasons to )u!
*Thogh the stock price reco"ered slightly +ith 7arayan =rthy coming !ack on the!oard, it is still trading at a 1) per cent discont to its )%year median 5( o# 20'. as +ell
as !elo+ the 5( o# its competitors sch as ?4 Technologiesand TS+hich are at
20')) and 28')$, respecti"ely
*In#osys has #aced pro!lems +ith its !siness model !t it seems to !e taking steps to
get !ack on track' 9or instance, the company hiked employee salaries recently to
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16/19
impro"e morale, redce attrition and retain the !est talent
*5ricing in#le*i!ility, +hich cased it to lose proects to companies sch as ?4 and
TS, is planned to !e recti#ied in the #tre
Stockwire
Do+n, !t not ot)ew stocks have witnessed e"cessive selling !ut ma% still offer a possi!le
opportunit% for investors
By Research Desk | g 30, 2013
=arkets, at least in the short%term, are anything !t rational' In"estors, or rather
speclators, go o"er!oard on !oth sides that is, either sending the share prices rocketing
or a!soltely crashing a stock' Bt these anomalies tend to e"en ot in the long%term as
long as the #ndamentals o# a company are intact'
;e ha"e a #e+ sch instances +hich ha"e
+itnessed e*cessi"e selling !t may still o##er a possi!le opportnity #or in"estors to
enter the stock'
1ata Coffee
The company is the largest co##ee prodcer and e*porter o# India'
rrent priceC R&3&
)2%+eek high priceC R1,6.)
)2%+eek lo+ priceC R$$0
Discont to )%year 5( /in GC 1)
Reasons for Fall
*The company #aced slo+do+n in 9>13 de to a #all in e*ports cased !y +eak glo!al
prices
*o##ee e*ports o# the company +ere 8,$31 tonnes in 9>13 as compared to ),.3) tonnes
in 9>12
*India
8/10/2019 Market Wire
17/19
Reasons to )u!
*o##ee prices are e*pected to increase in the second hal# o# the year de to short
spply' ietnam, a maor spplier o# ro!sta co##ee, is #acing droght and prodction is
proected to !e lo+' =oreo"er, the Roya attack on co##ee trees in the entral merican
region +ill also hamper spply
*Tata co##ee e*ports primarily ro!sta green !eans and instant co##ee' There is an
increasing demand #or instant co##ee, o# +hich ro!sta !eans are a large component
1itan Industries
Titan is India
8/10/2019 Market Wire
18/19
rrent priceC R62
)2%+eek high priceC R102
)2%+eek lo+ priceC R2,1&0
Discont to )%year 5( /in GC 2)
Reasons for Fall
*The company ac@ired S !ased ooper Tyres in a H2') !illion deal
*The large de!t taken p #or the deal cased the share price to crm!le' In"estors #elt
that the ac@isition may not pay o## as +as in the case o# Tata Steel, +hich is still
strggling to cope +ith the montain o# de!t it took to ac@ire ors rop !ack in
2006
Reasons to )u!
*7ot only the am!itios ac@isition +old make the com!ined entity the se"enth%
largest tyre man#actrer in the +orld, it +old also gi"e the company a +ider range o#
prodcts in the replacements market and +old psh its prodcts in di##erent
geographies
*The glo!al replacement market took a dip in 2012 !t is e*pected to gro+ this year and
+ith more strength in de"eloping markets
*7o+ e"en thogh pollo Tyres +ill ha"e greater reach, there are concerns that the
com!ined cash #lo+ #rom the companies +ill !e a!le to pay o## the interest costs !t not
pay o## the principal' It remains to !e seen +hether pollo Tyres can cope +ith the ne+
si:e and take ad"antage #rom the positionInfos!s
The company is one o# the #irst esta!lished and the second%largest IT company in the
contry' ItAs still !elo+ its median 5( and cold o##er opportnities #or in"estment'
rrent priceC R3,120
)2%+eek high priceC R3,123
)2%+eek lo+ priceC R2,1&0
Discont to )%year 5( /in GC 10
Reasons for Fall*In#osys has !een #acing margin pressres o"er the past #e+ @arters
*5ro!lems #or the company started +hen it re"amped its !siness model +ith the 3'0
strategy +hich meant #or it to pro"ide !siness trans#ormational soltions and not st
so#t+are ser"ices' This thogh came at the +rong time as +ith the #inancial crisis,
companies +ere more intent on sa"ing +hat they had than on #rther e*pansion
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19/19
*The company +as also adamant to not chase lo+ margin contracts +hich at a time o#
+eak discretionary IT spends came to hit the company hard' Its ri"al, TS, thogh did
e*actly the opposite and :oomed ahead
*The #inal stra+ +as dra+n +hen it missed its 2013 re"ene estimates and the share
price reacted +ith a 21 per cent crash
Reasons to )u!
*Thogh the stock price reco"ered slightly +ith 7arayan =rthy coming !ack on the
!oard, it is still trading at a 1) per cent discont to its )%year median 5( o# 20'. as +ell
as !elo+ the 5( o# its competitors sch as ?4 Technologiesand TS+hich are at
20')) and 28')$, respecti"ely
*In#osys has #aced pro!lems +ith its !siness model !t it seems to !e taking steps to
get !ack on track' 9or instance, the company hiked employee salaries recently to
impro"e morale, redce attrition and retain the !est talent
*5ricing in#le*i!ility, +hich cased it to lose proects to companies sch as ?4 and
TS, is planned to !e recti#ied in the #tre
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