3QFY2012 Result Update | IT

January 12, 2012

Infosys
Performance highlights
(` cr) Net revenue EBITDA EBITDA margin (%) PAT 3QFY12 9,298 3,133 33.7 2,372 2QFY12 8,099 2,514 31.0 1,906 % chg (qoq) 14.8 24.6 265bp 24.5 3QFY11 7,106 2,363 33.3 1,780 % chg (yoy) 30.8 32.6 44bp 33.3

BUY
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code IT 153,325 1.0 3,388/2,169 146,052 5 16,038 4,831 INFY.BO INFY@IN

`2,589 `3,047
12 Months

Source: Company, Angel Research

For 3QFY2012, Infosys results came in lower than our as well as streets expectations on the USD revenue front; however, the company exceeded expectations on the INR revenue, margin and bottom-line fronts. The major disappointment came from the lowering of FY2012 USD guidance below our and consensus estimates to 16.4% from earlier 17-19% yoy. In addition, the company gave tepid revenue guidance for 4QFY2012 (almost flat qoq). We recommend a Buy rating on the stock. Quarterly highlights: For 3QFY2012, Infosys reported revenue of US$1,806mn, up 3.4% qoq, aided by 3.1% qoq volume growth and 0.8% qoq blended pricing growth. In INR terms, revenue came in at `9,298cr, up by whopping 14.8% qoq. The companys EBITDA and EBIT margin increased by 265bp and 302bp qoq to 33.7% and 31.2%, respectively, largely gaining from INR depreciation. PAT came in at `2,372cr, up 24.5% qoq. Outlook and valuation: Management commentary has turned cautious for the next years budgets and expects it to be flat to marginally negative. Also, the company is witnessing delays in ramp-ups of the deals being signed. This is clearly reflected in the muted 4QFY2012 and FY2012 guidance given by management. We believe this clearly indicates challenging visibility in business volumes and managements future expectation. We expect the company to record USD revenue growth of 16.4% and 13.1% yoy in FY2012 and FY2013, respectively. We have revised our INR assumption downwards for 4QFY2012 and FY2013 to `51.0 and `50.0, respectively, following a steep 15% depreciation against USD over the last four months. This has led to INR revenue growth to be higher than USD revenue growth at 24.1% and 16.5% yoy for FY2012 and FY2013, respectively. Over FY201113E, we expect a CAGR of 19.2% and 19.0% in EBITDA and PAT, respectively. We value the company at 18x FY2013E of `169.0 and recommend a Buy rating on the stock with a target price of `3,047. Key financials (Consolidated)
Y/E March (` cr) Net sales % chg Net profit % chg EBITDA margin (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 16.0 17.5 37.4 29.1

Abs. (%) Sensex Infosys

3m (5.4) (3.4)

1yr (17.9) (23.3)

3yr 76.0 123.8

FY2009 21,693 30.0 5,990 28.6 33.2 104.6 24.7 7.7 31.2 29.0 6.3 19.1

FY2010 22,742 4.8 6,219 3.8 34.5 109.5 23.6 6.2 25.8 25.0 5.8 16.8

FY2011 27,501 20.9 6,823 9.7 32.6 119.5 21.7 5.4 25.0 25.9 4.8 14.6

FY2012E 34,120 24.1 8,358 22.5 32.0 146.3 17.7 4.4 25.1 26.7 3.7 11.6

FY2013E 39,767 16.5 9,656 15.5 32.0 169.0 15.3 3.6 23.8 25.8 3.1 9.5

Ankita Somani
+91 22-39357800 Ext: 6819 ankita.somani@angelbrkoing.com

Please refer to important disclosures at the end of this report

Infosys | 3QFY2012 Result Update

Exhibit 1: 3QFY2012 performance (IFRS, consolidated)

(` cr) Net revenue Cost of revenue Gross profit SG&A expenses EBITDA Depreciation EBIT Other income PBT Income tax PAT EPS Gross margin (%) EBITDA margin (%) EBIT margin (%) PAT margin (%)
Source: Company, Angel Research

3QFY12 9,298 5,054 4,244 1,111 3,133 234 2,899 422 3,321 949 2,372 41.6 45.6 33.7 31.2 24.4

2QFY12 8,099 4,511 3,588 1,074 2,514 233 2,281 387 2,668 762 1,906 33.4 44.3 31.0 28.2 22.5

% chg (qoq) 14.8 12.0 18.3 3.4 24.6 0.4 27.1 24.5 24.5 24.5 24.5 134bp 265bp 302bp 194bp

3QFY11 7,106 3,847 3,259 896 2,363 216 2,147 290 2,437 657 1,780 31.2 45.9 33.3 30.2 24.1

% chg (yoy) 30.8 31.4 30.2 24.0 32.6 8.3 35.0 36.3 44.4 33.3 33.3 (22)bp 44bp 96bp 34bp

9MFY12 24,882 13,918 10,963 3,141 7,822 691 7,132 1,252 8,384 2,384 6,000 105.0 44.1 31.4 28.7 23.0

9MFY11 20,251 11,042 9,209 2,569 6,640 640 6,000 796 6,796 1,791 5,005 87.6 45.5 32.8 29.6 23.8

% chg (yoy) 22.9 26.0 19.0 22.3 17.8 8.0 18.9 23.4 33.1 19.9 19.9 (141)bp (135)bp (97)bp (82)bp

Exhibit 2: 3QFY2012 Actual vs. Angel estimates

(` cr) Net revenue EBITDA margin (%) PAT
Source: Company, Angel Research

Actual 9,298 33.7 2,372

Estimate 9,222 32.6 2,197

% Var. 0.8 106bp 7.9

INR depreciation brings in cheer

For 3QFY2012, Infosys reported revenue of US$1,806mn, up 3.4% qoq, on the back of modest 3.1% qoq volume growth and 0.8% qoq blended pricing growth. However, cross-currency movement negatively affected the companys revenue by 1.0% qoq. Revenue in constant currency (CC) terms came in at US$1,823mn, up 4.4% qoq. Volume growth of 3.1% qoq was driven by 1.4% and 3.8% qoq growth in onsite and offshore volumes, respectively. In INR terms, revenue came in at `9,298cr, registering whopping 14.8% qoq growth; INR revenue was aided by steep INR depreciation qoq against the USD in 3QFY2012.

January 12, 201

Infosys | 3QFY2012 Result Update

Exhibit 3: Trend in volume growth (Effort wise)

8 6 4
(%)

6.8 4.7 4.5 4.5

3.5 2.3

4.0 3.1 2.7

3.8 3.1 1.4

2 0 (2) (4)

(0.2) (2.0) 3QFY11 (1.4)

4QFY11 Offshore

1QFY12 Onsite

2QFY12 Total volume growth

3QFY12

Source: Company, Angel Research

Exhibit 4: Trend in volume and revenue growth (qoq)

6 4.7 4
(%)

4.0

5.0 4.5

4.4

3.1 2 0.8 0 3QFY11 (2) 4QFY11 (1.4)

3.1

3.1

1QFY12

2QFY12

3QFY12

Revenue growth (constant currency)

Source: Company, Angel Research

Volume growth

Modest growth across industries and services

Service wise, revenue from business operations (contributed 64.3% to revenue) grew by 3.4% qoq, majorly led by 9.5% and 8.8% qoq growth in PES and IMS, respectively. Revenue from application development and application maintenance posted 3.4% and 4.4% growth, respectively. Revenue from consulting and system integration (contributed 30.6% to revenue) grew by 1.4% qoq. Revenue from products, platforms and solutions (contributed 5.1% to revenue), which had declined by 0.5% qoq in 2QFY2012, increased by 17.2% qoq due to an 18.2% qoq increase in revenue from products. This is one of the major focus areas of the company, and the total TCV of this service area currently stands at US$300mn.

January 12, 201

Infosys | 3QFY2012 Result Update

Exhibit 5: Growth trend in service verticals (Reported basis)

Particulars Business operations Application development Application maintenance Infrastructure management services (IMS) Testing services Business process management (BPO) Product engineering services (PES) Others Consulting and systems integration Products, platforms and solutions Products Others
Source: Company, Angel Research

% to revenue % growth qoq % growth yoy 64.3 17.1 21.8 6.1 7.9 5.2 3.6 2.6 30.6 5.1 4.8 0.3 3.4 3.4 4.4 8.8 (0.3) (0.4) 9.5 (4.0) 1.4 17.2 18.2 3.4 16.9 21.8 12.9 13.9 23.3 5.8 70.9 (1.2) 9.6 0.2 1.3 (14.5)

Industry wise, revenue of FSI, the companys anchor vertical contributing 35.3% to revenue, grew by 3.4% qoq, led by 7.8% qoq growth in revenue from insurance. Revenue from banking and financial services grew by 2.3% qoq. In CC terms, revenue from FSI grew by 4.0% qoq. Going ahead, the company is seeing traction in this vertical from risk compliance, fraud prevention and regulatory kind of work. Manufacturing (contributed 20.4% to revenue) emerged as the major growth driver for the company, recording 4.5% qoq revenue growth. In CC terms, revenue from this vertical grew by 5.7% qoq. The company is seeing IT spending coming in the manufacturing industry segment from clients in terms of work related to harmonising processes and transformation to gain cost efficiency and simplicity. The RCL segment (contributed 23.1% to revenue) registered 4.3% qoq revenue growth, led by whopping 21.7% and 11.6% qoq growth in transport and logistics and lifesciences, respectively. In CC terms, revenue from RCL grew strongly by 5.3% qoq. In this industry segment, retail is gaining good traction on account of spend related to digital commerce, digital marketing and clients targeting to go global. In addition, CPG companies are investing significantly in package implementation-related services. The ECS segment (contributed 21.2% to revenue) posted merely 1.5% qoq growth in its revenue, led by 8.9% qoq growth in revenue from energy and utilities. In CC terms, revenue from this segment increased by 2.8% qoq. Going ahead, the company expects its deal pipeline to pick up for the telecom industry segment, with more spend coming in from the wireless space during the quarter. The company closed five large deals in this quarter one was a transformational deal, while the others were all business operations deals.

January 12, 201

Infosys | 3QFY2012 Result Update

Exhibit 6: Growth trend in industry segments (Reported basis)

Particulars FSI Banking and financial services Insurance Manufacturing RCL Retail and CPG Transport and logistics Life Sciences Healthcare ECS Energy and utilities Communication and services Others
Source: Company, Angel Research

% to revenue 35.3 27.9 7.4 20.4 23.1 15.2 2.0 4.1 1.8 21.2 6.0 9.8 5.4

% growth qoq 3.4 2.3 7.8 4.5 4.3 0.8 21.7 11.6 3.4 1.5 8.9 (2.5) 1.6

% growth yoy 11.1 14.1 0.8 18.7 25.9 19.5 25.2 30.2 102.7 3.7 12.1 (10.5) 30.8

In terms of geographies, revenue growth was led by Europe, which posted 16.8% qoq growth in CC terms. Revenue from North America and Rest of the World grew by 1.1% and 2.5% qoq in CC terms, respectively. The company added 14 new clients in Europe in 3QFY2012 across industries, such as FSI, manufacturing and retail and logistics.

Exhibit 7: Growth trend in geographies (CC basis)

20 15 10 9.7 4.2 5.1 3.7 1.6 (0.5) (5) 3QFY11 4QFY11 North America
Source: Company, Angel Research

16.8

(%)

6.3 2.4 2.1

7.3 2.5

5 0

2.1

1.1

(2.6) 1QFY12 Europe 2QFY12 Rest of the world 3QFY12

Hiring intact
Infosys added 9,655 gross employees in 3QFY2012, of which only 3,863 were lateral additions. The net addition number for the quarter stood at 3,266. Attrition, on LTM basis, declined slightly to 15.4% in 3QFY2012 from 15.6% in 2QFY2012. The company maintained its gross hiring target of 45,000 employees in FY2012. In addition, the company made 23,000 campus offers for FY2013 (27,000 for FY2012).

January 12, 201

Infosys | 3QFY2012 Result Update

Exhibit 8: Employee metrics

3QFY11 Gross addition Net addition Lateral employees Attrition LTM basis (%)
Source: Company, Angel Research

4QFY11 8,930 3,041 3,591 17.0

1QFY12 9,922 2,740 4,044 15.8

2QFY12 15,352 8,262 2,318 15.6

3QFY12 9,655 3,266 3,863 15.4

11,067 5,311 5,212 17.5

Utilization rate, including trainees, declined by 30bp qoq to 69.9, while utilization rate, excluding trainees, increased by merely 10bp qoq to 77.4% during the quarter.

Exhibit 9: Trend in utilization

85 80.7 80 75.2
(%)

77.3 74.9

77.4

75 70 65 60 3QFY11 4QFY11 Including trainees 1QFY12 2QFY12 Excluding trainees 3QFY12 72.6 68.4 69.6 70.2 69.9

Source: Company, Angel Research

Margins enhance
The companys EBITDA and EBIT margins improved by 265bp and 302bp qoq to 33.7% and 31.2%, respectively, largely gaining from INR depreciation. EBIT margin gain of 302bp qoq came on the back of 1) a 440bp qoq gain from INR depreciation and 2) 140bp qoq negative impact due to cost increases on account of promotions given during the quarter.

January 12, 201

Infosys | 3QFY2012 Result Update

Exhibit 10: Trend in EBITDA margin

300 200 100 33.3 32.1 197 265 33.7 35 34 33 32 (120) 29.1 (298) 30 29 28 27 26 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 31

(BP)

(100) (200) (300) (400)

Margin movement (qoq)

Source: Company, Angel Research

EBITDA margin (%)

Client pyramid enhances

Infosys added 49 new clients during the quarter, of which six are Fortune 500 clients. The client pyramid of Infosys saw qualitative movement with two clients from US$20mn-50mn shifting to higher revenue brackets of US$50mn-100mn and US$100mn-200mn each. The companys client base in the US$10mn-20mn revenue bracket increased by six. The active client base of the company increased to 665 in 3QFY2012 from 647 in 2QFY2012.

Exhibit 11: Client metrics

Particulars Top client (% of revenue) Client addition Active client US$1mn5mn US$5mn10mn US$10mn20mn US$20mn50mn US$50mn100mn US$100mn200mn US$200mn-300mn 3QFY11 4.6 40 612 170 59 53 39 18 9 2 4QFY11 4.7 34 620 179 61 53 45 17 9 2 1QFY12 4.5 26 628 191 58 45 48 21 9 2 2QFY12 4.6 45 647 200 60 48 45 24 9 1 1 3QFY12 4.1 49 665 198 59 54 41 26 11 1 1

US$300mn plus
Source: Company, Angel Research

Guidance disappoints
Management has reduced its FY2012 USD revenue growth guidance to 16.4% yoy to US$7,029mn-7,033mn from 17.1-191% yoy, mainly on account of delays in decision making from the clients side. In addition, management has given tepid revenue guidance of almost flat qoq at US$1,806mn-1,1810mn for 4QFY2012. We believe this clearly indicates challenging visibility in business volumes and managements future expectation. In addition, the company decreased its USD EPS guidance to US$3.0 from US$3.023.06 given during 2QFY2012 results, 14.5% yoy growth vs. the previous guidance of 15.3-16.8% yoy growth.

January 12, 201

(%)

(7)

31.0

Infosys | 3QFY2012 Result Update

Exhibit 12: 4QFY2012 and FY2012 guidance

Guidance (IFRS) Revenue (` cr) EPS (`) Revenue (US$bn) Basic EPADS (US$)
Source: Company, Angel Research

4QFY2012 9,391-9,412 42.12 1.806-1.810 0.81

FY2012-Previous (As on 2QFY2012) 33,501-34,088 143.02-145.26 7.08-7.20 3.02-3.06

FY2012-Revised (As on 3QFY2012) 34,273-34,294 147.13 7.029-2.033 3.0

Outlook and valuation

Management commentary has turned cautious for the next years budgets and expects it to be flat to marginally negative. Also, the company is witnessing delays in ramp-ups of the deals being signed. This is clearly reflected in managements 4QFY2012 guidance. In addition to this, cross-currency volatility has increased over the past few months. During 3QFY2012, currencies such as AUD, GBP and Euro depreciated by 3.6%, 2.4% and 4.6%, qoq, respectively, against USD. Hence, taking all this into account, management has cut the annual revenue guidance for FY2012 to 16.4% yoy from 17.1-19.1% yoy previously. Hence, we have assumed moderation in demand going forward in FY2013 and have built in a revenue CQGR of 3.0% over 4QFY2012-4QFY2013 vis--vis 4.1% in 9MFY2012, owing to the expected deferment in IT spending. We expect the company to record USD revenue growth of 16.4% and 13.1% yoy in FY2012 and FY2013, respectively. We have revised our INR assumption downwards for 4QFY2012 and FY2013 to `51.0 and `50.0, respectively, following a steep 15% depreciation against USD over the last four months. This has led to INR revenue growth to be higher than USD revenue growth at 24.1% and 16.5% yoy for FY2012 and FY2013, respectively. On the EBIT margin front, for FY2012, we have revised our expectations upwards for FY2012 and FY2013 to 29.3% and 29.1%, respectively, majorly due to INR depreciation. Over FY2011 13E, we expect a CAGR of 19.2% and 19.0% in EBITDA and PAT, respectively. At the CMP of `2,589, the stock is trading at 17.7x FY2012E and 15.3x FY2013E EPS. We value the company at 18x FY2013E (10% discount to its five-year average of 20x and at a PEG of 0.95x) of `169.0 and recommend a Buy rating on the stock with a target price of `3,047.

Exhibit 13: Key assumptions

Parameters Revenue growth USD terms (%) USDINR rate Revenue growth INR terms (%) EBITDA margin (%) Tax rate (%) EPS growth (%)
Source: Company, Angel Research

FY2012 16.4 48.5 24.1 32.0 28.5 22.5

FY2013 13.1 50.0 16.5 32.0 28.5 15.5

January 12, 201

Infosys | 3QFY2012 Result Update

Exhibit 14: Change in estimates

FY2012 Parameter (` cr) Net revenue EBITDA Other income PBT Tax PAT Earlier estimates 34,327 10,807 1,549 11,336 3,223 8,113 Revised estimates 34,120 10,933 1,680 11,683 3,324 8,358 Variation (%) (0.6) 1.2 8.5 3.1 3.1 3.0 Earlier estimates 40,726 12,769 1,933 13,481 3,775 9,706 FY2013 Revised estimates 39,767 12,732 1,946 13,505 3,849 9,671 Variation (%) (2.4) (0.3) 0.7 0.2 2.0 (0.5)

Source: Company, Angel Research

Exhibit 15: One-year forward PE (x)

4,700 4,100 3,500

(`)

2,900 2,300 1,700 1,100 500

Apr-07

Apr-08

Apr-09

Apr-10

Oct-07

Oct-08

Oct-09

Oct-10

Apr-11

Price
Source: Company, Angel Research

26x

22x

18x

14x

10x

Exhibit 16: Recommendation summary

Company HCL Tech Hexaware Infosys Infotech Enterprises KPIT Cummins Mahindra Satyam MindTree Mphasis NIIT Persistent TCS Tech Mahindra Wipro Reco Buy Buy Buy Accumulate Accumulate Buy Accumulate Buy Buy Neutral Accumulate Buy Neutral CMP (`) 388 75 2,589 109 146 65 397 300 36 329 1,161 573 399 Tgt. price (`) 531 96 3,047 120 163 82 453 368 55 324 1,294 666 413 Upside (%) 36.9 28.0 17.7 10.1 11.6 26.2 14.1 22.7 52.8 (1.5) 11.5 16.2 3.5 Target P/E (x) 13.0 11.0 18.0 8.0 10.0 11.0 10.0 11.5 6.9 9.0 20.0 9.0 15.3 FY2013E EBITDA (%) 18.4 18.7 32.0 15.8 15.4 14.8 14.7 16.6 16.3 22.4 29.0 16.8 19.7 FY2013E P/E (x) 9.5 8.6 15.3 7.0 8.9 8.7 8.8 8.1 4.5 9.6 17.9 6.9 14.8 FY2011-13E EPS CAGR (%) 29.2 74.1 18.9 11.3 19.9 33.0 34.8 (3.1) 19.3 (1.1) 20.5 29.9 11.6 FY2013E RoCE (%) 21.7 21.4 25.8 15.6 19.5 11.7 20.3 14.0 11.0 20.0 31.1 14.6 14.6 FY2013E RoE (%) 23.2 19.8 23.8 12.9 16.9 13.8 16.4 14.2 15.6 14.0 31.9 20.0 20.0

Source: Company, Angel Research

January 12, 201

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Infosys | 3QFY2012 Result Update

Profit and loss statement (IFRS, consolidated)

Y/E March (` cr) Net sales Cost of revenue Gross profit % of net sales Selling and marketing expenses % of net sales General and admin expenses % of net sales EBITDA % of net sales Dep. and amortization % of net sales EBIT % of net sales Other income Profit before tax Provision for tax % of PBT PAT Minority interest Adj. PAT EPS (`) FY2009 21,693 11,765 9,928 45.8 1,104 5.1 1,629 7.5 7,195 33.2 761 3.5 6,434 29.7 475 6,909 919 13.3 5,990 5,990 104.6 FY2010 22,742 12,078 10,664 46.9 1,184 5.2 1,628 7.2 7,852 34.5 942 4.1 6,910 30.4 990 7,900 1,681 21.3 6,219 6,219 109.5 FY2011 27,501 15,054 12,447 45.3 1,512 5.5 1,971 7.2 8,964 32.6 862 3.1 8,102 29.5 1,211 9,313 2,490 26.7 6,823 6,823 119.5 FY2012E 34,120 18,900 15,220 44.6 1,776 5.2 2,510 7.4 10,933 32.0 931 2.7 10,002 29.3 1,680 11,683 3,324 28.5 8,358 8,358 146.3 FY2013E 39,767 21,936 17,831 44.8 2,177 5.5 2,922 7.3 12,732 32.0 1,173 2.9 11,559 29.1 1,946 13,505 3,849 28.5 9,656 9,656 169.0

January 12, 201

10

Infosys | 3QFY2012 Result Update

Balance sheet (IFRS, consolidated)

Y/E March (` cr) Current assets Cash and cash equivalents Available for sale financial assets Investment in certificates of deposit Trade receivables Unbilled revenue Derivative financial instruments Prepayments and other current assets Total current assets Non-current assets Property, plant and equipment Goodwill Intangible assets Available for sale financial assets Deferred income tax assets Income tax assets Other non-current assets Total non-current assets Total assets Current liabilities Trade payables Derivative financial instruments Current income tax liabilities Client deposits Unearned revenue Employee benefit obligations Provisions Other liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities Employee benefit obligations Other liabilities Total non-current liabilities Total liabilities Equity Share capital Share premium Retained earnings Other components of equity Total equity Total liabilities and equity 286 2,944 15,972 (8) 19,194 22,201 286 3,047 20,668 72 24,073 27,622 286 3,082 23,826 109 27,303 31,263 286 3,120 29,847 109 33,362 37,501 286 3,120 37,165 50 40,621 44,817 39 187 56 282 3,007 124 171 61 356 3,549 259 60 319 3,960 260 61 321 4,139 260 61 321 4,196 27 114 581 5 331 104 92 1,471 2,725 10 724 8 531 131 82 1,707 3,193 44 817 22 518 140 88 2,012 3,641 50 850 25 528 140 90 2,135 3,818 50 900 20 540 140 90 2,135 3,875 4,665 692 35 447 274 262 6,375 22,201 4,439 829 56 356 667 347 6,694 27,622 4,844 825 48 23 378 993 463 7,574 31,263 5,113 830 60 23 400 1,000 587 8,013 37,501 5,140 830 60 23 570 1,200 779 8,602 44,817 10,993 3,672 750 411 15,826 12,111 2,556 1,190 3,494 841 95 641 20,928 16,666 21 123 4,653 1,243 66 917 23,689 21,280 20 25 5,403 1,496 70 1,194 29,488 26,571 30 50 6,319 1,743 110 1,392 36,215 FY2009 FY2010 FY2011 FY2012E FY2013E

January 12, 201

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Infosys | 3QFY2012 Result Update

Cash flow statement (IFRS, consolidated)

Y/E March (` cr) Pre-tax profit from operations Depreciation Pre tax cash from operations Other income/prior period ad Net cash from operations Tax Cash profits (Inc)/dec in current assets Inc/(dec) in current liabilities (Inc)/dec in net trade WC Cashflow from operating activities (Inc)/dec in fixed assets (Inc)/dec in investments (inc)/dec in sale of financial assets (Inc)/dec in deferred tax assets Inc/(dec) in other non-current liab. (Inc)/dec in other non-current ass. Cashflow from investing activities Inc/(dec) in debt Inc/(dec) in equity/premium Dividends Cashflow from financing activities Cash generated/(utilized) Cash at start of the year Cash at end of the year FY2009 6,434 761 7,195 475 7,670 919 6,751 (664) 547 (117) 6,635 (1,372) 71 (213) 115 (77) (1,475) (758) 1,574 (2,331) 2,829 8,164 10,993 FY2010 6,910 942 7,852 990 8,842 1,681 7,161 (238) 468 230 7,391 (716) (3,746) (302) 74 (243) (4,933) 333 1,673 (1,340) 1,118 10,993 12,111 FY2011 8,102 862 8,964 1,211 10,175 2,490 7,685 (1,808) 448 (1,360) 6,325 (1,267) 3,602 (23) (348) (37) (104) 1,823 (1,256) 2,337 (3,593) 4,555 12,111 16,666 FY2012E 10,002 931 10,933 1,680 12,614 3,324 9,289 (1,284) 177 (1,107) 8,182 (1,200) 99 (29) 2 (141) (1,269) 38 2,337 (2,299) 4,614 16,666 21,280 FY2013E 11,559 1,173 12,732 1,946 14,677 3,849 10,828 (1,401) 57 (1,344) 9,484 (1,200) (35) (370) (192) (1,797) (59) 2,337 (2,396) 5,291 21,280 26,571

January 12, 201

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Infosys | 3QFY2012 Result Update

Key ratios
Y/E March Valuation ratio (x) P/E P/CEPS P/BVPS Dividend yield (%) EV/Sales EV/EBITDA EV/Total assets Per share data (`) EPS Cash EPS Dividend Book value DuPont analysis Tax retention ratio (PAT/PBT) Cost of debt (PBT/EBIT) EBIT margin (EBIT/sales) Asset turnover ratio (sales/assets) Leverage ratio (assets/equity) Operating ROE Return ratios (%) RoCE (pre-tax) Angel RoIC RoE Turnover ratios (x) Asset turnover (fixed assets) Receivables days 3.4 74 3.4 70 3.6 78 4.3 74 4.6 74 29.0 57.4 31.2 25.0 58.7 25.8 25.9 56.1 25.0 26.7 61.8 25.1 25.8 63.6 23.8 0.9 1.1 0.3 1.0 1.2 31.2 0.8 1.1 0.3 0.8 1.1 25.8 0.7 1.1 0.3 0.9 1.1 25.0 0.7 1.2 0.3 0.9 1.1 25.1 0.7 1.2 0.3 0.9 1.1 23.8 105 118 23.5 336 109 125 25.0 421 119 134 34.9 477 146 162 34.9 583 169 189 34.9 710 24.7 21.9 7.7 0.9 6.3 19.1 6.2 23.6 20.7 6.2 1.0 5.8 16.8 4.8 21.7 19.3 5.4 1.3 4.8 14.6 4.2 17.7 15.9 4.4 1.3 3.7 11.6 3.4 15.3 13.7 3.6 1.3 3.1 9.5 2.7 FY2009 FY2010 FY2011 FY2012E FY2013E

January 12, 201

13

Infosys | 3QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

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. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking 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 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 No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

January 12, 201

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