Infosys Technologies

November 30, 2008

Ticker: INFY

Infosys Technologies is a global IT services firm that develops custom software and provides business process outsourcing for large corporations. The Company provides end-to-end business solutions that leverage technology for its clients, including technical consulting, design, development, product engineering, maintenance, systems integration, package-enabled consulting, and implementation and infrastructure management services.

Infosys primarily serves the following industries:

• Manufacturing
  
• Banking and financial services
  
• Insurance
  
• Telecom
  
• Retail
  
• Energy
  
• Transportation
  

Of the industries that Infosys serves, banking and financial services are the largest accounting for 30.2% of the company's revenue, followed by Telecom at 19.3% (Numbers from Wikinvest)

Infosys has been a prime beneficiary of the outsourcing boom that has taken place in India throughout the 2000s. The company's revenue and employees grew approximately 400% and 500%, respectively, from 2003 to 2007. Dow Jones reported that Infosys Technologies Ltd. said it is maintaining its guidance for the third quarter of 2009 and fiscal 2009. For fiscal 2009, the Company expects its earnings at $2.24 per American Depository Share, on revenue of $4.72-$4.81 billion. For the third quarter of 2009, the Company expects revenue of $1,175-$1,220 million

Rated 5-Star by "The Motley Fool"

In an article on 11/28/2008 the Motley Fool wrote that based on their "aggregated intelligence of 120,000-plus investors" Infosys has earned a five-star ranking. Among their "All-Star" members 175 gave INFY a rating of outperform (while only 8 ranked it as underperform). Here's a link to the original article.

Recently, the Indian rupee has depreciated significantly against the US Dollar. Market analysts in India said that Infosys was gaining amid the overall subdued sentiment mainly due to this depreciation of the rupee against the US dollar. This is because Infosys's revenues are mainly generated from overseas assignments in USD, where as the costs incurred are mainly in the Indian Rupee.

Earnings

		Actual (USD)	Estimates (USD)	Surprise
Q2 2009	0.56	0.55	$0.01(1.27%)
Q1 2009	0.54	0.51	$0.03(5.06%)
Q4 2008	0.54	0.54	$0.00(0.19%)
Q3 2008	0.52	0.51	$0.01(1.76%)

Fundamentals

The Cash Flow per share (CPS) for Q2 2009 was at $0.68. The analyst estimates for CPS for FY 2009 are at $2.39 – and the cash flow seems fairly healthy.

View the full INFY chart at Wikinvest

INFY's P/E Ratio is at 11.5 - INFY seems inexpensive with a PEG value of 0.63, below the Software & Programming industry median PEG of 0.93.

Its Gross Margin is reasonably strong at 41.7%. The Operating Margin (@28.5% better than 95% of its peers) indicates that it controls its costs and expenses better than its peers in the software and programming industry. The Return on Equity (35.98%) shows that INFY is able to reinvest its earnings more efficiently than 93% of its competitors in the industry.

Analyst Research

INFY has been rated by Thomson Reuters to "Outperform"

It has been Included in the S&P 4 STAR Portfolio.

INFY's consensus score is higher than 96.2% of the Technical & System Software Industry

INFY's consensus score is higher than 91.2% of the Jaywalk Universe