GDP-annual rate of 8.90% 3rd quarter of 2010

Inflation rate:-last reported 9.7 % in Oct-2010

Interest Rate:-reverse repo reported @5.5 %.

Trade deficit 9118.0 Millions in Sept-2010 Tax rate India 30% ,less than Spain ,

France etc Saving rate -35.7%

Macro Economic Indicator

YEARRATIOS

March 08 March 09 March 10

Current Ratio 4.28 4.71 3.30

Quick Ratio 4.20 4.67 3.28

Gross profit Ratio 31.04 30.66 28.23

Net profit Ratio 26.31 27.52 27.37

Asset turnover Ratio 5.59 3.39 3.47

Dividend per share ratio 25.00 23.50 33.25

Reported EPS 101.30 101.58 78.15

Infosys Ratio

Indian IT Industry The IT-BPO industry is estimated to

aggregate revenues of US$ 73.1 billion in FY2010, with the IT software and services industry accounting for US$ 63.7 billion of revenues.

Accounts for a 5.19% of the country's GDP Direct/indirect employment to 2.3 million

people 2.3 million employment India's outsourcing industry is expected to

increase to US$225 billion by 2020

Threat of Substitutes:(Medium)◦Other offshore locations e.g Philippines◦ Price of projects is a major differentiator, the

quality of products being same. RIVALRY AMONG FIRMS: High

◦ 'low-cost, little-differentiation‘ positioning.◦ high industry growth◦ Strong competitors◦ few numbers of large companies.

Porter 5 forces

Bargaining power of supplier:(high)◦Availability of vast talent pool – fresher's and

experienced.

Bargaining Power of Customers (very high)◦Large number of IT companies vying for IT projects –

resulting in high competition for projects.◦ Huge decline in IT expenditure :

Barriers to Entry(low)◦ Low capital requirements.◦ Large value chain

Intrinsic value =EPS*(P/E Ratio) EPS=101.30 P/E Ratio=32.42

◦ Intrinsic value=3284.14◦ Market Value=3254.10

-Market Value>Intrinsic value Buy shares of infosys

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