2QFY2015 Result Update | IT October 11, 2014 Infosys BUY Performance highlights CMP Target Price (` cr) Net revenue EBITDA EBITDA margin (%) PAT 2QFY15 1QFY15 % chg (qoq) 2QFY14 % chg (yoy) 13,342 3,774 28.3 3,096 12,770 3,441 26.9 2,886 4.5 9.7 0.0 7.3 12,965 3,390 26.1 2,626 2.9 11.3 178bp 17.9 `3,889 `4,700 Investment Period 12 Months Stock Info IT Sector Source: Company, Angel Research Market Cap (` cr) 2,23,319 For 2QFY2015, Infosys posted a 3.1% sequential growth in USD revenues to Net debt (` cr) (30,250) US$2,201mn V/s an expected US$2,193mn. In USD constant currency (CC) terms, Beta the company posted a strong 3.9% qoq growth in revenue. On the operating front, 52 Week High / Low the EBIT margins came in at 26.1% V/s an expected 24.6% (and V/s 25.1% in Avg. Daily Volume 1QFY2015) on account of improved productivity. Consequently, the PAT came in at Face Value (`) `3,096cr V/s an expected `2,948.9cr, a rise of 7.3% qoq. Going forward, the BSE Sensex company has maintained its future USD revenue growth guidance for FY2015 at Nifty 7-9% and EBIT margins to be sustained at these (2QFY2015) levels. Thus, we Reuters Code INFY.BO maintain our Buy rating on the stock with a target price of `4,700. Bloomberg Code INFY@IN 0.4 3,909/2,894 84,739 5 26,297 7,860 Quarterly highlights: The company posted a 3.1% sequential growth in USD revenues to US$2,201mn V/s an expected US$2,193mn. In USD constant currency (CC) terms, Shareholding Pattern (%) the company posted a strong 3.9% qoq revenue growth V/s an 1.5% qoq growth in Promoters 15.9 MF / Banks / Indian Fls 14.7 FII / NRIs / OCBs 43.3 Indian Public / Others 26.1 revenue in 1QFY2015. Among key geographies, Europe grew by 6.5% qoq in USD CC terms, while USA grew by 3.2% qoq in USD CC terms. The ECS (Electricity, Communications and Services) domain posted the highest growth of 8.8% qoq in USD CC terms. On the operating front, the EBIT margins came in at 26.1% V/s an expected 24.6% (and V/s 25.1% in 1QFY2015) on account of improved productivity. Consequently, the PAT came in at `3,096cr (V/s an expected `2,948.9cr), a rise of 7.3% qoq. Abs. (%) 3m 1yr 3yr Outlook and valuation: Going forward, the company has maintained its future USD revenue growth guidance for FY2015 at 7-9% and EBIT margins to be sustained at these (2QFY2015) levels. Over the next 2-3 years, the company has guided towards moving into a trajectory of 15-18% sales growth rate with EBIT margin of 26%-28%. In terms of valuation, the stock currently trades cheap at 16.5x FY2016E earnings, ie at a discount to its peer like TCS, which we believe can narrow down once the growth picks up in Infosys. We maintain our Buy rating on the stock. Sensex 3.6 29.7 58.8 Infosys 18.1 24.5 50.1 Key financials (Consolidated, IFRS) Y/E March (` cr) FY2013 FY2014 FY2015E FY2016E Net sales 40,352 50,133 55,347 61,546 % chg Adj. net profit % chg EBITDA margin (%) 19.6 24.2 10.4 11.2 9,421 10,867 12,204 13,465 13.3 15.4 12.3 10.3 28.6 27.2 27.3 27.8 EPS (`) 164.9 186.4 213.4 235.4 P/E (x) 23.6 20.9 18.2 16.5 P/BV (x) 5.6 4.7 4.0 3.4 RoE (%) 23.7 22.9 22.0 20.8 RoCE (%) 22.5 21.5 20.5 20.1 5.0 3.9 3.4 2.9 17.3 14.3 12.3 10.5 EV/Sales (x) EV/EBITDA (x) Source: Company, Angel Research Please refer to important disclosures at the end of this report Sarabjit kour Nangra +91 22-39357800 Ext: 6806 [email protected] 1 Infosys | 2QFY2015 Result Update Exhibit 1: 2QFY2015 performance (IFRS, consolidated) (` cr) 2QFY15 1QFY15 % chg (qoq) 2QFY14 % chg (yoy) 1HFY2015 1HFY2014 % chg (yoy) 13,342 12,770 4.5 12,965 2.9 26,112 24,232 7.8 Cost of revenue 7,910 8,046 (1.7) 8,050 (1.7) 15,956 15,050 6.0 Gross profit 5,432 4,724 15.0 4,915 10.5 10,156 9,182 10.6 SG&A expenses 1,658 1,283 29.2 1,525 8.7 2,941 2,809 4.7 EBITDA 3,774 3,441 9.7 3,390 11.3 7,215 6,373 13.2 291 230 26.7 334 (12.8) 521 653 (20.2) 3,483 3,211 8.5 3,056 14.0 6,694 5,720 17.0 877 829 5.8 510 72.0 1,706 1,087 PBT 4,360 4,040 7.9 3,566 22.3 8,400 6,807 23.4 Income tax 1,264 1,154 9.5 940 34.5 2,418 1,807 33.8 - - - 219 Reported PAT 3,096 2,886 7.3 2,407 28.6 5,982 4,780 25.1 Adjusted PAT 3,096 2,886 7.3 2,626 17.9 5,982 5,000 19.6 EPS 54.2 50.5 7.3 46.0 17.9 104.7 87.5 19.6 Gross margin (%) 40.7 37.0 37.9 187bp 38.9 37.9 EBITDA margin (%) 28.3 26.9 26.1 178bp 27.6 26.3 EBIT margin (%) 26.1 25.1 23.6 193bp 25.6 23.6 PAT margin (%) 21.8 21.2 19.5 28bp 21.5 19.7 Net revenue Depreciation EBIT Other income Exceptional item 219 Source: Company, Angel Research Exhibit 2: 2QFY2015 – Actual vs Angel estimates (` cr) Net revenue Actual Estimate % Var. 13,342 13,279 0.5 28.3 27.4 89bp 3,096 2,949 5.0 EBITDA margin (%) PAT Source: Company, Angel Research Revenue in line with expectation The company posted a 3.1% sequential growth in USD revenues to US$2,201mn V/s an expected US$2,193mn. In INR terms, revenue came in at `13,342cr (V/s an expected `13,279cr), up 4.5% qoq. In USD constant currency (CC) terms, the company posted a strong 3.9% qoq growth in revenue V/s a 1.5% qoq revenue growth in 1QFY2015. Among key geographies, Europe grew by 6.5% qoq, while USA grew by 3.2% qoq, both in USD CC terms. India and ROW posted a 4.0% qoq decline and 4.2% qoq growth, both in USD CC terms, respectively. In terms of domains, the Financial Services industry grew by 2.0% qoq in CC terms while Manufacturing grew by 4.5% qoq in USD CC terms. Among domains ECS (Electricity, Communications and Services) posted the highest growth of 8.8% qoq during the period in USD CC terms. Overall, the IT services volume growth came in at 3.0% qoq, driven by 1.1% qoq on site volume growth, along with a 3.8% qoq offshore volume growth, which enabled a 3.9% qoq growth in USD terms. October 11, 2014 2 Infosys | 2QFY2015 Result Update Exhibit 3: Trend in volume qoq growth (Effort wise) Source: Company, Angel Research Exhibit 4: Trend in volume and USD revenue growth (qoq) Source: Company, Angel Research Industry-wise, the revenue from Financial Services and Insurance (FSI), the company’s anchor vertical contributing 32.8% to revenue, grew by 1.3% qoq, driven by the insurance vertical, which grew by 3.2% qoq. In CC terms, revenue from FSI grew by 2.0% qoq. The Manufacturing industry vertical (contributed 23.3% to revenue) registered a 3.6% qoq growth in revenues. In CC terms, the revenue from this vertical grew by 4.5% sequentially. The company is seeing IT spending coming in the Manufacturing industry segment from clients in terms of work related to harmonizing processes and transformation to gain cost efficiency and simplicity. The Management indicated that traction in Manufacturing sub-segments such as aerospace and auto is good for services like digitization, expansion and connected vehicles while the company expects budgets to decline for the hi-tech industry segment. In hi-tech, the Management believes that fall in PC sales and reduction in overall capex is likely to negatively impact spending in CY2014. The Retail, CPG and Logistics (RCL) segment (contributed 23.4% to revenue) reported a 1.5% qoq growth in revenue. The Life Sciences and Healthcare vertical October 11, 2014 3 Infosys | 2QFY2015 Result Update posted a qoq growth of 5.4% and 3.2% respectively. The growth in Retail & CPG de-grew by 0.1% qoq. In CC terms, the revenue from RCL grew by 2.0% qoq. The Energy Utilities, Communications & Services (ECS) segment (contributed 20.5% to revenue) reported a strong 7.9% qoq growth in revenue, with Energy and Utilities posting a robust performance. Other sub verticals like Communication & Services reported a robust growth of 5.6% qoq. Exhibit 5: Growth trend in industry segments (Reported basis) Particulars % to revenue % growth qoq % growth yoy FSI 32.8 1.3 4.6 Banking and financial services 26.8 0.9 5.4 6.0 3.2 1.5 Manufacturing 23.3 3.6 7.0 RCL 23.4 1.5 3.0 Retail and CPG 15.3 (0.1) 3.8 Transport and logistics 1.5 3.2 (11.2) Life Sciences 4.7 5.4 8.9 Healthcare 1.9 3.2 (3.6) Insurance ECS 20.5 7.9 13.7 Energy and utilities 5.5 11.3 14.9 Communication and services 8.9 5.6 14.2 Others 6.1 8.5 12.0 Source: Company, Angel Research In terms of geographies, revenues from North America grew 3.2% qoq in CC terms, while other geographies such as Europe and ROW grew 6.5% qoq and 4.2% qoq, both in CC terms, respectively. India’s performance was poor during the quarter, posting a 4.0% qoq dip in revenue in CC terms. Exhibit 6: QoQ USD Growth trend in geographies (CC basis) Source: Company, Angel Research October 11, 2014 4 Infosys | 2QFY2015 Result Update Hiring and utilization Infosys added 14,255 gross employees in 2QFY2015, of which 4,774 were lateral additions. The net addition number for the quarter stood at 4,127. Attrition (for standalone) remained persistently high in 2QFY2015, increasing to 20.1% (LTM), up from 19.5% in 1QFY2015 and at its highest in recent history. The attrition rate in the company has been on a continue rise. For 2QFY2015, the attrition rate is around 20.1%. We believe unless the company reins in high attrition rate, the recent measures undertaken by the company to improve employee productivity would not fructify fully. The Management indicated that hiring, going ahead, will be based on business needs and the company is currently more focused towards improving the utilization level. The company is trying to inch up its utilization level going forward, which could act as one of the margin levers. Exhibit 7: Employee metrics 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 12,168 6,682 10,997 11,506 14,255 Net addition 2,964 (1,823) 2,001 879 4,127 Gross lateral emp. addition 3,806 3,333 2,100 3,954 4,774 17.3 18.1 18.7 19.5 20.1 Gross addition Attrition – LTM basis (%)* Source: Company, Angel Research, Note-* excluding subsidaries With the company focusing on improving its utilization level, the utilization rate during the quarter, including trainees, grew by 40bp qoq to 75.2%, while excluding trainees it grew by 220bp qoq to 82.3%. Exhibit 8: Trend in utilization (Services and consulting + Projects) Source: Company, Angel Research Margins expand On the operating front, the EBIT margins came in at 26.1% V/s an expected 24.6% (and V/s 25.1% in 1QFY2015 and 23.6% in 2QFY2014). The same was led by operational efficiency with inch up in utilization level to 75.2% (V/s 73.1% in 2QFY2014) and sequential decline in employee costs. In addition, the Management indicated that the operating margin for FY2015 is expected to be in the same range as in FY2014. October 11, 2014 5 Infosys | 2QFY2015 Result Update Exhibit 9: Trend in EBIT margin Source: Company, Angel Research Client pyramid Infosys added 49 new clients (gross additions) during the quarter, taking its total active client base to 912. The client addition was across the board. The company had added 4 more clients in the US$50-100mn, while adding 5 more in the US$100-200mn and adding almost 8 more in the US$200-300mn group. The growth of the company during the quarter has been aided by the repeat business, whereas the rest of the accounts remained steady. Exhibit 10: Client metrics Particulars 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 Top client (% of revenue) 3.9 3.7 3.6 3.4 3.4 Gross Client addition 68 54 50 61 49 Active client 873 888 890 910 912 US$1mn–5mn 248 269 269 285 386 US$5mn–10mn 75 78 84 87 99 US$10mn–20mn 60 60 57 35 67 US$20mn–50mn 46 47 49 19 40 US$50mn–100mn 25 26 29 12 16 US$100mn–200mn 12 11 10 9 14 US$200mn-300mn 3 3 2 2 10 1 1 1 1 US$300mn plus - Source: Company, Angel Research October 11, 2014 6 Infosys | 2QFY2015 Result Update Investment arguments Guidance reinforced: Infosys has reinforced its USD revenue growth guidance of 7-9% which was given in 4QFY2014, which should result in revenue growth of 2.3-3.5% on a qoq basis for the rest of the quarters. We believe that this is a conservative number from the company and we expect the company to post ~10.4% USD revenue growth in FY2015. In INR terms, the company has given a revenue guidance of 5.6-7.6% (assuming USD/INR rate at `60). Over the next 2-3 years, the company has guided towards moving into a trajectory of 15-18% growth rate with EBIT margins at 26%-28%. Deal pipeline healthier: The Management commentary indicated that though the deal pipeline seems to be better than what it was the same time last year, the company continues to remain focused on reviving growth momentum. But the company is witnessing sporadic project cancellations or ramp downs in some of its deals. While the improvement in IT spending outlook for CY2014 does bode well for the FY2015E revenue outlook of the sector in general and Infosys in specific, we believe Infosys will continue to lag behind its tier-I peers like TCS and HCL Tech on revenue growth. During the quarter, Infosys signed 4-5 large deals with TCV worth US$700mn+ similar to 4QFY2014, and indicated a better spending trend in key verticals like Financial Services, Retail and Manufacturing although Telecom and Hi tech verticals continue to be challenging. We expect Infosys to post a 10.4% USD revenue growth in FY2015. Over FY2014-16E, we expect USD and INR revenue to grow at a CAGR of 10.8% and 10.8%, respectively. Operating margin likely to be range bound: The Management maintained its stance that the company is right now focused on growth (at least for the next couple of quarters) and this may lead to sacrifice in margins in the near term. The operating margin is subject to tailwinds on a stable rupee, further improvement in utilization rates and cost optimization drive running in the company, though it has headroom to increase its utilization level by ~300bp to be comparable with peers and this, in turn, will assist in increasing operating margins further. Going ahead, given a stable rupee, higher S&M spends, and wage hikes in FY2015, we expect the EBIT margin to remain at 24.5% in FY2015 and 25.0% in FY2016 from 24.5% in FY2014. Over FY2014–16E, we expect an EBIT CAGR of 12.0%. Dividend policy changed: Infosys stated that the company's current policy was to pay dividends up to 30% of post-tax profits. The board has decided to increase the dividend pay-out ratio to up to 40% of post-tax profits with effect from FY2014. The board of directors recommended a final dividend of `43 per share for FY2014. During the quarter the company has also declared an interim dividend of `30 and also 1:1 bonus for all shareholders of the company. Outlook and valuation Going forward, the company has maintained its future USD revenue growth guidance for FY2015 at 7-9% and EBIT margins to be sustained at these (2QFY2015) levels in a narrow band. Over the next 2-3 years, the company has guided towards moving into a trajectory of 15-18% growth rate with EBIT margins of 26%-28%. On the valuation front, the stock is cheap at current valuations of 16.5x FY2016E earnings, ie at a discount to its peer like TCS, which we believe October 11, 2014 7 Infosys | 2QFY2015 Result Update can narrow down once the growth picks up in Infosys. We recommend a Buy on the stock with a target price of `4,700. Exhibit 11: Key assumptions Parameters FY2015 FY2016 Revenue growth – USD terms (%) 10.4 11.2 USD–INR rate 60.0 60.0 Revenue growth – INR terms (%) 10.4 11.2 EBITDA margin (%) Tax rate (%) EPS growth (%) 27.3 27.0 12.3 27.8 27.0 10.3 Source: Company, Angel Research Exhibit 12: One-year forward PE (x) Source: Company, Angel Research Exhibit 13: Recommendation summary Company Reco CMP Tgt. price Upside FY2016E FY2016E FY2014-16E FY2016E FY2016E (`) HCL Tech Buy 1,739 (`) (%) EBITDA (%) P/E (x) EPS CAGR (%) EV/Sales (x) RoE (%) 1,968 13.2 24.0 15.9 11.7 2.5 23.6 Infosys Buy 3,889 4,700 20.8 27.8 16.5 11.3 2.9 20.8 TCS Buy 2,679 Tech Mahindra Buy 2,339 - - 29.8 21.4 13.4 4.6 36.0 2,788 19.2 22.8 14.3 14.7 1.8 23.0 Wipro Buy 585 697 19.1 23.7 14.3 14.0 2.0 20.3 Source: Company, Angel Research Company Background Infosys is the second largest IT company in India, employing over 1,60,000 professionals (as on FY2014). The company services more than 900 clients across various verticals, such as financial services, manufacturing, telecom, retail and healthcare. Infosys has the widest portfolio of service offerings amongst Indian IT companies, spanning across the entire IT service value chain - from traditional Application Development and Maintenance to Consulting and Package Implementation to Products and Platforms. October 11, 2014 8 Infosys | 2QFY2015 Result Update Profit and loss statement (IFRS, consolidated) Y/E March (` cr) FY2012 FY2013 FY2014 FY2015E FY2016E Net sales 33,733 40,352 50,133 55,347 61,546 Cost of revenue 18,877 24,158 30,767 37,051 42,034 Gross profit 14,856 16,194 19,366 21,475 24,003 % of net sales Selling and mktg exp % of net sales General and admin exp. % of net sales EBITDA 40.1 38.6 38.8 39.0 2,034 2,625 2,767 3,077 5.2 5.0 5.2 5.0 5.0 2,390 2,609 3,107 3,598 3,816 7.1 6.5 6.2 6.5 6.2 10,709 11,551 13,634 15,110 17,110 % of net sales 31.7 28.6 27.2 27.3 27.8 Dep. and amortization 931 1,122 1,374 1,550 1,723 2.8 2.8 2.7 2.8 2.8 9,778 10,429 12,260 13,560 15,386 % of net sales EBIT % of net sales 29.0 25.8 24.5 24.5 25.0 Other income 1,904 2,359 2,669 3,157 3,058 Profit before tax 11,683 12,788 14,929 16,717 18,445 Provision for tax 3,368 3,367 4,062 4,514 4,980 28.8 26.3 27.2 27.0 27.0 8,315 9,421 10,648 12,204 13,465 - - 219 - - Adj. PAT 8,315 9,421 10,867 12,204 13,465 EPS (`) 145.5 164.9 186.4 213.4 235.4 % of PBT PAT Exceptional item October 11, 2014 44.0 1,757 9 Infosys | 2QFY2015 Result Update Balance sheet (IFRS, consolidated) Y/E March (` cr) FY2012 FY2013 FY2014 FY2015E FY2016E 20,591 21,832 25,950 34,075 40,957 Current assets Cash and cash equivalents Available for sale financial assets 32 1,739 2,197 2,197 2,197 345 - 859 859 859 Trade receivables 5,882 7,083 8,351 8,275 10,122 Unbilled revenue 1,873 2,435 2,811 2,808 3,434 - 101 215 215 215 Investment in certificates of deposit Derivative financial instruments Other current assets 1,523 2,123 2,636 2,859 3,497 Total current assets 30,246 35,313 43,019 51,287 61,281 5,409 6,468 7,887 8,004 7,657 Goodwill 993 1,976 2,157 2,157 2,157 Intangible assets 173 368 342 342 342 12 394 1,252 1,252 1,252 Non-current assets Property, plant and equipment Available for sale financial assets Deferred income tax assets Income tax assets Other non-current assets Total non-current assets 316 503 656 656 656 1,037 1,092 1,522 1,622 1,722 162 237 220 926 1,632 8,102 11,038 14,036 14,959 15,418 38,348 46,351 57,055 66,247 76,699 Trade payables 23 189 173 173 173 Derivative financial instruments 42 - - - - 1,054 1,329 2,187 2,987 3,787 15 36 40 40 40 Unearned revenue 545 823 660 660 660 Employee benefit obligations 498 614 954 954 954 Provisions 133 213 379 379 379 Other liabilities 2,456 3,082 4,745 5,145 5,545 Total current liabilities 4,766 6,286 9,138 10,338 11,538 Non-current liabilities - - - - - Deferred income tax liabilities 12 119 64 64 64 Employee benefit obligations 109 149 323 323 323 Total assets Current liabilities Current income tax liabilities Client deposits Other liabilities Total non-current liabilities Total liabilities - - - - - 121 268 387 387 387 4,887 6,554 9,525 10,725 11,925 286 286 286 286 286 Equity Share capital Share premium 3,089 3,090 3,090 3,090 3,090 29,816 36,114 43,584 51,576 60,828 270 307 570 570 570 Total equity 33,461 39,797 47,530 55,522 64,774 Total Liabilities and Equity 38,348 46,351 57,055 66,247 76,699 Retained earnings Other components of equity October 11, 2014 10 Infosys | 2QFY2015 Result Update Cash flow statement (IFRS, consolidated) Y/E March (` cr) Pre-tax profit from operations Depreciation Pre tax cash from ops. Other income/prior period ad Net cash from operations FY2013 FY2014 FY2015E FY2016E 9,778 10,429 12,260 13,560 15,386 931 1,122 1,374 1,550 1,723 10,709 11,551 13,634 15,110 17,110 1,904 2,359 2,669 3,157 3,058 12,614 13,910 16,303 18,267 20,168 Tax 3,368 3,367 4,062 4,514 4,980 Cash profits 9,246 10,543 12,241 13,753 15,188 (2,399) (2,464) (2,271) (143) (3,112) Inc/(dec) in current liab. 1,125 1,520 2,852 1,200 1,200 (Inc)/dec in net trade WC (1,274) (944) 581 1,057 (1,912) (Inc)/dec in current assets Cashflow from operating actv. 7,972 9,599 12,822 14,810 13,276 (Inc)/dec in fixed assets (1,496) (2,181) (2,793) (1,667) (1,376) (Inc)/dec in investments (233) (1,362) (1,317) - - (inc)/dec in sale of financial assets 11 (382) (858) - - (Inc)/dec in deferred tax assets 18 (242) (583) (100) (100) Inc/(dec) in other non-current liab. (198) 147 119 - - (Inc)/dec in other non-current ass. 8 (1,253) (138) (706) (706) (1,890) (5,273) (5,570) (2,473) (2,182) Cashflow from investing activities Inc/(dec) in debt Inc/(dec) in eq./premium Dividends - - - - - (1,155) (280) 1,077 (0) - 1,002 2,805 4,211 4,212 4,212 (2,157) (3,085) (3,134) (4,212) (4,212) Cash generated/(utilized) 3,925 1,241 4,118 8,125 6,882 Cash at start of the year 16,666 20,591 21,832 25,950 34,075 Cash at end of the year 20,591 21,832 25,950 34,075 40,957 Cashflow from financing activities October 11, 2014 FY2012 11 Infosys | 2QFY2015 Result Update Key ratios Y/E March FY2012 FY2013 FY2014 FY2015E FY2016E P/E 26.7 23.6 20.9 18.2 16.5 P/CEPS 24.1 21.1 18.2 16.2 14.6 P/BVPS 6.6 5.6 4.7 4.0 3.4 Dividend yield (%) 0.4 1.1 1.6 1.6 1.6 Valuation ratio (x) EV/Sales 6.0 5.0 3.9 3.4 2.9 18.9 17.3 14.3 12.3 10.5 5.3 4.3 3.4 2.8 2.3 EPS 146 165 186 213 235 Cash EPS 162 184 214 240 266 Dividend 15 42 63 63 63 585 696 831 971 1132 Tax retention ratio (PAT/PBT) 0.7 0.7 0.7 0.7 0.7 Cost of debt (PBT/EBIT) 1.2 1.2 1.2 1.2 1.2 EBIT margin (EBIT/sales) 0.3 0.3 0.2 0.2 0.3 Asset turnover ratio (sales/assets) 0.9 0.9 0.9 0.8 0.8 EV/EBITDA EV/Total assets Per share data (`) Book value DuPont analysis Leverage ratio (assets/equity) 1.1 1.2 1.2 1.2 1.2 24.9 23.7 22.4 22.0 20.8 RoCE (pre-tax) 25.5 22.5 21.5 20.5 20.1 Angel RoIC 56.3 45.8 43.7 46.6 47.1 RoE 24.9 23.7 22.9 22.0 20.8 Asset turnover (fixed assets) 4.2 3.7 3.6 3.7 4.0 Receivables days 84 86 81 73 80 Operating ROE Return ratios (%) Turnover ratios (x) October 11, 2014 12 Infosys | 2QFY2015 Result Update Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com DISCLAIMER This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. 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Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates may have investment positions in the stocks recommended in this report. Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered Infosys No No Yes No Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors Ratings (Returns): October 11, 2014 Buy (> 15%) Reduce (-5% to -15%) Accumulate (5% to 15%) Sell (< -15%) Neutral (-5 to 5%) 13
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