For the year ended March 31, 2014, Infosys' net profit grew 13 percent to Rs 10,648 crore and revenues jumped 24.2 percent to Rs 50,133 crore compared to last year. Net profit in dollar terms rose 1.5 percent to USD 1,751 million and revenues jumped 11.5 percent to USD 8,249 million in the year ended March 2014 that was inline with what the management has guided on March 11. Consolidated earnings before interest and tax (EBIT) increased 0.7 percent quarter-on-quarter to Rs 3,281 crore and EBIT margin rose 46 basis points to 25.48 percent during January-March quarter.
Source : www.moneycontrol.com
My 2 Cents on the current valuations :
My 2 Cents on the current valuations :
" The company has forecast revenue growth of 5.6% to 7.6% in rupee terms for FY 2015. "
The investors would be really pleased with 13% increase in net profits considering the last few years. The CAGR for the last 3 years is around 15% and Nasscom expects the software sector to grow around 15% for this year. It's currently trading at 17 times P/E based on TTM.
Even if the company turns around under the leadership of Mr.Narayanamurthy, i think a 15% growth rate would give an EPS of around 215 and PEG ratio of 1 gives a fair value of around Rs. 3200. So i believe the stock is fairly valued and should be added at lower levels unless there is huge change in the rupee post the election results.
EquityMaster View :
At the current price of Rs 3,174, the stock is trading at a price to earnings (P/E) multiple of about 17 times trailing 12 months earnings. We recommend investors to Buy the stock at current price from a perspective of 3 years. Our target price of Rs 4,736 implies average annual returns of 15% over this time period. However, we recommend that investors should not buy the stock if the stock price exceeds Rs 3,700.
Disclaimer : I don't own infosys.