Infosys has consistently grown revenues and EPS at high double digit rates between 2002 and 2012, with revenues growing at a 32.7% CAGR and EPS growing at 28.2% CAGR. Infosys has also maintained a high return on equity of around 30% with no long term debt. Despite this strong financial performance, Infosys is currently trading at a discount to its peers Wipro and Cognizant based on its price-to-earnings ratio when adjusted for its higher cash balance per share.

1. Infosys

2. Consistently Growing Revenues at
High Double Digit Rates
$M Sales ($M)
8000
6,994
7000
6,041
6000
5000 4,663 4,804
4,176
4000
3,090
3000
2,152
2000 1,592
1,063
1000 754
414
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Revenues Grew 32.7% CAGR between 2002 and 2012
* - 2012 is TTM data

3. Earnings Per Share (EPS) Growing in
High Double Digits
EPS EPS
3.5
3.00
3
2.61
2.5 2.24 2.30
2.02
2
1.49
1.5
1.01
1 0.77
0.51
0.5 0.37
0.25
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
EPS Grew 28.2% CAGR between 2002 and 2012
* - 2012 is TTM data

4. Return on Equity is Close to 30% with No
Long Term Debt on the Balance Sheet
40 Return for Equity %
35 33.40 33.90
31.30 31.20
29.80 30.60 30.20 29.50
30 28.30
24.50 24.50
25
20
15
10
5
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Consistently High Return on Equity Over the Last Ten Years with
No Long Term Debt on the Books
* - 2012 is TTM data

5. Trading at Discount to Peers Wipro
and Cognizant
Infosys
Target Company Valuation Trading at a Discount to Peers

6. Adjusting for Cash, Target Company
Provides Margin of Safety
Infosys Wipro Cognizant Accenture IBM
Cash Per Share $6.51 $0.77 $8.1 $8.6 $10.6
PE 15.3 22.5 26.1 17.04 15.47
PE Adjusted for
13.16 19.14 22.74 14.2 14.53
Cash
ROE% 31.2% 21.2% 24.3% 51.6% 59%
Debt to Equity - 0.09 - - 1.54
ROA% 26.8% 13.5% 17.4% 16.3% 10.6%
Dividend Yield % 1.5% 1.3% - 1.7% 1.4%
Revenue Growth
CAGR (2002- 32.7% 26.1% 36.0% 12.7% 6.5%
2012)
EPS Growth
CAGR (2002- 28.2% 21.0% 35.4% 31.1% 20.4%
2012)
Stock Price (April
$46.92 $9.77 $74.18 $65.00 $207.55
27)
* - 2012 is TTM data