Infosys Limited
Infosys Limited Fundamental Analysis
Infosys Limited (INFY) shows moderate financial fundamentals with a PE ratio of 17.09, profit margin of 16.16%, and ROE of 29.72%. The company generates $19.8B in annual revenue with moderate year-over-year growth of 3.85%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 65.3/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze INFY's fundamental strength across five key dimensions:
Efficiency Score
ExcellentINFY demonstrates superior asset utilization.
Valuation Score
ExcellentINFY trades at attractive valuation levels.
Growth Score
WeakINFY faces weak or negative growth trends.
Financial Health Score
ExcellentINFY maintains a strong and stable balance sheet.
Profitability Score
ExcellentINFY achieves industry-leading margins.
Key Financial Metrics
Is INFY Expensive or Cheap?
P/E Ratio
INFY trades at 17.09 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, INFY's PEG of -13.68 indicates potential undervaluation.
Price to Book
The market values Infosys Limited at 5.93 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 12.28 times EBITDA. This signals the market has high growth expectations.
How Well Does INFY Make Money?
Net Profit Margin
For every $100 in sales, Infosys Limited keeps $16.16 as profit after all expenses.
Operating Margin
Core operations generate 20.26 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $29.72 in profit for every $100 of shareholder equity.
ROA
Infosys Limited generates $20.10 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Infosys Limited produces operating cash flow of $4.08B, showing steady but balanced cash generation.
Free Cash Flow
Infosys Limited generates strong free cash flow of $3.79B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.92 in free cash annually.
FCF Yield
INFY converts 6.96% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
17.09
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-13.68
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.93
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.76
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.11
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.79
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.30
vs 25 benchmark
ROA
Return on assets percentage
0.20
vs 25 benchmark
ROCE
Return on capital employed
0.39
vs 25 benchmark
How INFY Stacks Against Its Sector Peers
| Metric | INFY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 17.09 | 34.43 | Better (Cheaper) |
| ROE | 29.72% | 1135.00% | Weak |
| Net Margin | 16.16% | -134808.00% (disorted) | Strong |
| Debt/Equity | 0.11 | 7.92 | Strong (Low Leverage) |
| Current Ratio | 1.79 | 5.77 | Neutral |
| ROA | 20.10% | -310795.00% (disorted) | Strong |
INFY outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Infosys Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
54.56%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
38.82%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
70.75%
Industry Style: Growth, Innovation, High Beta
High Growth