Financial Model

Company Name ---> Infosys

Year Ending ---> March

Select the Case base case

Infosys Limited is an Indian multinational informatio

technology company that provides business
Income statement consulting, information
technology and outsourcing services. The company
Balance sheet founded in Pune and is headquartered
in Bangalore.Infosys is the second-largest Indian IT
Cash flow company after Tata Consultancy Services by 2020
revenue figures.
Schedules

Assumptions
xxxx Inputs /
Assumptions
Discounted Cash flow model xxxx Formulae
xxxx Linking to other
Cost of equity tabs
Relative valuation

Blended TEV

Charts

Ratios
 multinational information
rovides business

g services. The company was

dquartered
second-largest Indian IT
ancy Services by 2020
INCOME STATEMENT - INFOSYS

All Figure are in INR Historical Data

Year ending 2017 2018 2019 2020

Revenue 68,484 70,522 82,675 90,791

% growth 3% 17% 10%

Cost of service 43,253 7,328 10,631 10,743

% margin 63% 10% 13% 12%

Gross profit 25,231 63,194 72,044 80,048

% margin 37% 90% 87% 88%

Employee expense - 38,893 45,315 50,887

%margin 0% 55% 55% 56%

SG& A 8,330 5,408 6,559 6,894

%margin 12% 8% 8% 8%

EBITDA 16,901 18,893 20,170 22,267

% margin 25% 27% 24% 25%

Depreciation and amortization - 1,863 2,011 2,893

EBIT 16,901 17,030 18,159 19,374

% Margin 25% 24% 22% 21%

Non operating Income 3,080 3,311 2,882 2,803

Interest expense - - - 170

PBT 19,981 20,341 21,041 22,007

% margin 29% 29% 25% 24%

Exceptional expenses/ income - - - -

PBT after exceptionals and foreign ex 19,981 20,341 21,041 22,007

Tax 5,598 4,241 5,631 5,368

PAT 14,383 16,100 15,410 16,639

Share of profit/loss of joint ventures (30) (71) - -

PAT (after MI) 14,353 16,029 15,410 16,639

% margin 21% 23% 19% 18%

Attributable to non controlling interest - - 6 45

Attributable to commom shareholders 14,353 16,029 15,404 16,594

 Forecast Data

2021 2022 2023 2024 2025 2026

100,472 114400 131019 150908 174776 203490

11% 14% 15% 15% 16% 16%

12,568 14310 16389 18877 21863 25454

13% 13% 13% 13% 13% 13%

87,904 100,090 114,630 132,031 152,913 178,035

87% 87% 87% 87% 87% 87%

55,541 64120 73434 84582 97959 114053

55% 56% 56% 56% 56% 56%

4,474 8687 9949 11459 13271 15452

4% 8% 8% 8% 8% 8%

27,889 27,284 31,247 35,990 41,683 48,531

28% 24% 24% 24% 24% 24%

3,267 2039 2335 2690 3115 3627

24,622 25,244 28,912 33,300 38,567 44,904

25% 22% 22% 22% 22% 22%

2,201 1728 1357 1066 837 657

195 195 195 195 195 195

26,628 26,778 30,074 34,171 39,209 45,366

27% 23% 23% 23% 22% 22%

- - - - - -

26,628 26,778 30,074 34,171 39,209 45,366

 7,205 7,230 8,120 9,226 10,586 12,249

19,423 19,548 21,954 24,945 28,623 33,117

19,423 19,548 21,954 24,945 28,623 33,117

19% 17% 17% 17% 16% 16%

72 72 72 72 72 72

19,351 19,476 21,882 24,873 28,551 33,045

BALANCE SHEET - INFOSYS

As of 2017 2018 2019 2020 2021

Current Assets

Cash & Cash Equivalents 22,625 19,818 19,568 18,649 24,714

Inventory(Assets held for sale) 0 2,060 0 0 0

Trade receivables 12322 13,142 14,827 18,487 19,294

Other Investments 9,970 6,407

6,627 4,655 2,342

loans 272 239

241 239 159

Other Assets 8,516 8351 11,615 12,546 14,224

Total Current Assets 53,705 50,017 52,878 54,576 60,733

Non Current Assets

PP&E (Including Intangibles) 11,892 11,969 13,558 19,457 20,348

Long Term Investments 6,453 5756 4,634 4,137 11,863

Financial assets 338 320 331 758 1173

Tax Assets (net) 6,256 7,352 7,692 7,128 6,909

Goodwill 3,652 2,211 3,540 5,286 6,079

Other Non Current Assets 1,059 2,265 2,105 1,426 1,281

Total Non Current Assets 29,650 29,873 31,860 38,192 47,653

Total Assets 83,355 79,890 84,738 92,768 108,386

Current Liabilities

Liabilities directly associated with ass 0 324 0 0 0

Lease liabilities 0 0 0 619 738

Other financial liablities 10639 9481 12,595 12,543 14,249

Payables 367 694 1,655 2,852 2,645

Other Short Term Liabilities 3007 3606 4,388 4,842 6,233

Total Current Liabilities 14,013 14,105 18,638 20,856 23,865

Non Current Liabilities

Lease liabilities 0 4,014 4,587

Financial liabilities 277 602 819 1,775 2,389

Other non current liabilities 83 259 275 279 763

Total Non-Current Liabilities 360 861 1094 6,068 7,739

Total Liabilities 14,373 14,966 19,732 26,924 31,604

Equity

Equity Share Capital 1,144 1,088 2,170 2,122 2,124

Other Equity 67,838 63,835 62,778 63,328 74,227

Non Controlling Interest 0 1 58 394 431

Total Equity 68,982 64,924 65,006 65,844 76,782

Total Liabilites and Equity 83,355 79,890 84,738 92,768 108,386

Check OK OK OK OK OK
 2022 2023 2024 2025 2026

25324 32654 42717 54125 70087

0 0 0 0 0

21927 25112 28924 33498 39002

4,541 3,846 3,576 3,988 3,804

213 204 192 203 199

14,224 14,224 14,224 14,224 14,224

66,229 76,040 89,634 106,038 127,316

23,605 27,495 30,778 34,389 38,145

11,863 11,863 11,863 11,863 11,863

754 895 941 863 900

6,909 6,909 6,909 6,909 6,909

6,079 6,079 6,079 6,079 6,079

1,281 1,281 1,281 1,281 1,281

50,491 54,522 57,851 61,384 65,176

116,720 130,562 147,484 167,422 192,492

0 0 0 0 0

0 0 0 0 0
 13,129 13,307 13,562 13,333 13,400

3,013 3,450 3,974 4,603 5,359

6,233 6,233 6,233 6,233 6,233

22,375 22,990 23,769 24,168 24,992

5160 5733 6306 6879 7452

2,389 2,389 2,389 2,389 2,389

763 763 763 763 763

8,312 8,885 9,458 10,031 10,604

30,687 31,875 33,227 34,199 35,596

2,124 2,124 2,124 2,124 2,124

83478 96131 111702 130668 154341

431 431 431 431 431

86,033 98,686 114,257 133,223 156,896

116,720 130,562 147,484 167,422 192,492

OK OK OK OK OK
CASH FLOW - INFOSYS
(All figures in INR cr)

Year ending 2022 2023 2024

Cash Flow from Operations

Net Income 19476 21882 24873

Add:Depreciation & Amortization 2039 2335 2690

Decrease / (Increase) in Working Capital Assets (2687) (3176) (3800)

(Decrease) / Increase in Working Capital Liabilities (1,490) 616 778

Cash Flow from Operations 17338 21657 24541

Cash Flow from Investing

Capital Expenditure (including intangibles) (2,399) (2,748) (3,165)

Purchase of Goodwill 0 0 0

Proceeds from Disposals 0 0 0

Investments (2,199) 695 270

Other (2,478) (3,619) (2,854)

Cash Flow from Investing (7,076) (5,671) (5,749)

Cash Flow from Financing

Long Term Debt (Net) 573 573 573

Common Equity 559 578 601

Dividends (10,783) (9,807) (9,903)

Cash Flow from Financing (9,651) (8,656) (8,729)

Total Cash Flow 610 7330 10063

Beginning Cash Flow 24,714 25,324 32,654

Ending Cash Flow 25324 32654 42717

 2025 2026

28551 33045

3115 3627

(4586) (5500)

399 824

27480 31996

(3,665) (4,267)

0 0

0 0

(411) 184

(2,984) (3,152)

(7,060) (7,235)

573 573

579 586

(10,164) (9,958)

(9,012) (8,799)

11407 15962
42,717 54,125

54125 70087
SCHEDULE -INFOSYS
As of 2017 2018 2019 2020

Working Capital schedule

Accounts Payables 367 694 1655 2852

Accounts Payables Turnover 118 11 6 4

Days of Payables Outstanding 3 35 57 97

Accounts Receivables 12322 13142 14827 18487

Accounts Recievables Turnover 6 5 6 5

Days of Sales Outstanding 66 68 65 74

PP&E Schedule

Opening Balance 11,892 11,969 13,558

Add: Capex (Including Intangibles) 1998 2445 3307

as a % of Revenue 3% 3% 4%

Less: Depreciation & Amortization 1863 2011 2893

as a % of Capex 93% 82% 87%

Less: Disposal 0 0 0

Other Adjustments (58) 1155 5485

Closing Balance 11,892 11,969 13,558 19,457

Common Equity
Beginnning of Period 67838 63835 62778

Add: Net Income 16029 15404 16594

Add: Other Comprehensive Income 343 134 138

Less: Dividends 7,469 13,712 9,517

Other Adjustments (12,906) (2,883) (6,665)

Ending of Period 67838 63,835 62,778 63,328

Debt Schedule

Beginnning of Period - -

Add/less: debt taken - - 4,014

Closing balance - - 4,014

Interest expense 170

4%
 2021 2022 2023 2024 2025 2026

2645 3013 3450 3974 4603 5359

5 5 5 5 5 5

77 77 77 77 77 77

19294 21927 25112 28924 33498 39002

5 5 5 5 5 5

70 70 70 70 70 70

19,457 20,348 23,605 27,495 30,778 34,389

2107 2399 2748 3165 3665 4267

2% 2% 2% 2% 2% 2%

3267 2039 2335 2690 3115 3627

155% 85% 85% 85% 85% 85%

0 0 0 0 0 0

2051 2897 3478 2809 3061 3116

20,348 23,605 27,495 30,778 34,389 38,145

 63328 74,227 83478 96131 111702 130668

19351 19476 21882 24873 28551 33045

300 191 210 233 211 218

9,120 10783 9807 9903 10164 9958

368 368 368 368 368 368

74,227 83,478 96,131 111,702 130,668 154,341

4014 4587 5,160 5,733 6,306 6,879

573 573 573 573 573 573

4,587 5,160 5,733 6,306 6,879 7,452

195

4%
 ASSUMPTION - INFOSYS

Tax rate 27%

Assumptions

As of 2017 2018 2019 2020

Income Statement
Revenue Forecast

Financial services 26,477 28,625

8%

Retail 13,556 14,035

4%

Communication 10,426 11,984

15%

Energy resources, Utilities 10,390 11,736

13%

Manufacturing 8,152 9,131

12%

Hi tech 6,177 6,972

13%

Life sciences 5,203 5,837

12%

Others 2,294 2,471

8%
Total 82,675 90,792

10%

Financial services

Best case

base case

Worst case

Retail

Best case

base case

Worst case

Communication

Best case

base case

Worst case

Energy resources, Utilities

Best case

base case

Worst case

Manufacturing

Best case

base case

Worst case
Hi tech

Best case

base case

Worst case

Life sciences

Best case

base case

Worst case

Others

Best case

base case

Worst case

Expenses Forecast

COGS Margin

Best Case

Base Case

Worst Case

Employee Expense
 Best Case

Base Case

Worst Case

SG&A

Best Case

Base Case

Worst Case

D&A

Best Case

Base Case

Worst Case

Other Income 7% -13% -3%

Best Case

Base Case

Worst Case

BALANCE SHEET

Days of Sales outstanding

Best Case
 Base Case

Worst Case

Days of Payables Oustanding

Best Case

Base Case

Worst Case
 Select the Case base case

2021 2022 2023 2024 2025

32,583 39751 48497 59166 72182

14% 22% 22% 22% 22%

14,745 15482 16256 17069 17923

5% 5% 5% 5% 5%

12,628 13259 13922 14618 15349

5% 5% 5% 5% 5%

12,539 13397 14314 15293 16339

7% 7% 7% 7% 7%

9,447 9730 10022 10323 10633

3% 3% 3% 3% 3%

8,560 10510 12903 15842 19451

23% 23% 23% 23% 23%

6,870 8381 10225 12475 15219

18% 22% 22% 22% 22%

3,100 3889 4879 6121 7679

25% 25% 25% 25% 25%

100,473 114,400 131,019 150,908 174,776

11% 14% 15% 15% 16%

14.0% 14.0% 14.0% 14.0%

12% 12% 12% 12%

10.0% 10.0% 10.0% 10.0%

7.00% 7.00% 7.00% 7.00%

5% 5% 5% 5%

3.00% 3.00% 3.00% 3.00%

7.00% 7.00% 7.00% 7.00%

5% 5% 5% 5%

3.00% 3.00% 3.00% 3.00%

8.00% 8.00% 8.00% 8.00%

6% 6% 6% 6%

4.00% 4.00% 4.00% 4.00%

5.00% 5.00% 5.00% 5.00%

3% 3% 3% 3%

1.00% 1.00% 1.00% 1.00%

22.00% 22.00% 22.00% 22.00%

20% 20% 20% 20%

18.00% 18.00% 18.00% 18.00%

17.00% 17.00% 17.00% 17.00%

15% 15% 15% 15%

13.00% 13.00% 13.00% 13.00%

22.00% 22.00% 22.00% 22.00%

20% 20% 20% 20%

18.00% 18.00% 18.00% 18.00%

13% 13% 13% 13%

15% 15% 15% 15%

13% 13% 13% 13%

11% 11% 11% 11%

55% 55% 55% 55%

 57% 57% 57% 57%

55% 55% 55% 55%

53% 53% 53% 53%

8% 8% 8% 8%

10% 10% 10% 10%

8% 8% 8% 8%

6% 6% 6% 6%

85% 85% 85% 85%

83% 83% 83% 83%

85% 85% 85% 85%

87% 87% 87% 87%

-21%

-19% -19% -19% -19%

-21% -21% -21% -21%

-23% -23% -23% -23%

65 65 65 65

70 70 70 70
65 65 65 65

60 60 60 60

57 57 57 57

60 60 60 60

57 57 57 57

54 54 54 54
2026

88062

22%

18819

5%

16117

5%

17457

7%

10952

3%

23881

23%

18568

22%

9634

25%
203,490

16%

14.0%

12%

10.0%

7.00%

5%

3.00%

7.00%

5%

3.00%

8.00%

6%

4.00%

5.00%

3%

1.00%
22.00%

20%

18.00%

17.00%

15%

13.00%

22.00%

20%

18.00%

13%

15%

13%

11%

55%
57%

55%

53%

8%

10%

8%

6%

85%

83%

85%

87%

-19%

-21%

-23%

65

70
65

60

57

60

57

54
Discounted cash flow technique of valuation - Infosys

Free cash flow to Firm (FCFF)

Operating cash profit calculation 2021

Revenues

Less: Operating expenses (COSS + SGA)

Less: Depreciation

Earnings before interest and tax (EBIT)

Less: Operating taxes

Post tax operating profit (NOPAT)

Add: Depreciation

Post tax operating cash profit

Operating cash investments 2021

Capital expenditures investments

Working Capital 36,868

Increase in working capital

Operating cash investments

Free cash flow to firm 2021

FCFF

Cost of Capital calculation

Tax rate 27%

Cost of debt 8.50%

Cost of equity 11%

Target capital structure (debt to capital) 6%

WACC (Weighted average cost of capital) 10%

Present value of future cash flows

Years from current

Discount factor

Present value of FCFF

Terminal value calculation

Terminal growth

Terminal value

Present value of terminal value

Share price calculation

Enterprise value (EV) 2222137

Less: Short term debt 738

Less: Long term debt 4,587

Add: Cash and cash equivalents 24,714

Add/Less: Non-operating adj 0

Consolidated equity value 2241526

Less: Value of minority interest 431

Equity value 2241095

Total shares outstanding (mm) 420

Equity value per share 5336

Current market price 1713

Gap 211%
uation - Infosys

2022 2023 2024 2025 2026

114400 131019 150908 174776 203490

22997 26338 30336 35134 40906

2039 2335 2690 3115 3627

89364 102346 117882 136527 158956

7230 8120 9226 10586 12249

82134 94226 108656 125940 146708

2039 2335 2690 3115 3627

84173 96561 111346 129056 150335

2022 2023 2024 2025 2026

2399 2748 3165 3665 4267

43,855 53,049 65,865 81,870 102,323

6,987 9,195 12,815 16,005 20,454

9386 11943 15980 19670 24721

2022 2023 2024 2025 2026

74788 84619 95366 109385 125,614

 1 2 3 4 5

91% 82% 74% 67% 61%

67765 69473 70943 73731 76719

6%

3051172

1863507
 Working Note of Cost of Equity

Risk Free rate

(10 Yr Indian Govt Bond Yield) 6.1%

Equity Risk Premium (Damodaran) 6.85%

Beta of Infosys 0.66

Cost of equity 11%

Adjustment for infosys 0%

Cost of Equity for infosys 11%

 Relative valuation technique- Infosys
Particulars 2022 2023 2024 2025 2026

Net Profits 19548 21954 24945 28623 33117

Total shares outstanding (mm) 420 420 420 420 420

EPS 46.54 52.27 59.39 68.15 78.85

EBITDA 27284 31247 35990 41683 48531

P/E Multiple 114.65 102.08 89.84 78.30 67.67

EV/EBITDA 81.4 71.1 61.7 53.3 45.8

2021 EBITDA

EV(metric*multiple)
 Trading Comparables (IT Sector)

P/E TEV/EBITDA

Infosys 34.61 21.8

TCS 34.31 23.06

Tech mahindra 24.52 14.69

Wipro 28.07 17.7

HCL technologies 24.71 13.17

L &T Infotech 40.78 26.44

Mind tree 37.57 23.61

Average 32.08 20.07

27889

559653
Blended TEV - INFOSYS

Method Value Weight Weighted TEV

DCF 2222137 90% 1999924

Relative Valuation 559653 10% 55965

Blended TEV 2055889

 Analysis - INFOSYS
(All figures in INR cr)

Current Case base case

2017 2018 2019 2020 2021 2022 2023

Revenue 68484 70522 82675 90791 100472 114400 131019

Growth (%) 3% 17% 10% 11% 14% 15%

250000 0.2

17% 0.18
16%
16%
200000 15% 0.16
15%
14%
0.14

150000 11% 0.12

10%
0.1

100000 203490 0.08

174776
150908 0.06
131019
114400
50000 3% 90791 100472 0.04
82675
68484 70522
0.02

0 0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

2017 2018 2019 2020 2021 2022 2023

Revenue 68484 70522 82675 90791 100472 114400 131019

EBITDA Margin 25% 27% 24% 25% 28% 24% 24%

250000 29%

28% 28%
203490
200000
27% 27%
174776

150908 26%
150000
131019
25% 25% 114400 25%
24%
100472
100000 90791 24% 24% 24% 24% 24%
82675 24%
68484 70522
23%
50000
 174776

150908 26%
150000
131019
25% 25% 114400 25%
24%
100472
100000 90791 24% 24% 24% 24% 24%
82675 24%
68484 70522
23%
50000
22%

0 21%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
 2024 2025 2026

150908 174776 203490

15% 16% 16%

0.2

0.18
16%
16%
0.16

0.14

0.12

0.1 Revenue
Growth
203490 0.08
174776
0.06

0.04

0.02

0
2025 2026

2024 2025 2026

150908 174776 203490

24% 24% 24%

29%

28%
203490

174776 27%

26%

25% Revenue
EBITDA Margin
24% 24%
24%

23%
174776

26%

25% Revenue
EBITDA Margin
24% 24%
24%

23%

22%

21%
2025 2026
Ratio Analysis- Infosys

As of 2017 2018 2019 2020 2021 2022

Liquidity Ratio

Current Ratio 4 4 3 3 3 3

Cash ratio 2 1 1 1 1 1

Solvency Ratio

Debt to Equity ratio 0.01 0.01 0.02 0.09 0.10 0.10

Turnover Ratio
Asset Turnover Ratio 82% 88% 98% 98% 93% 98%

Profitability Ratio
Operating Profit margin 25% 24% 22% 21% 25% 22%

Net profit margin 21% 23% 19% 18% 19% 17%

ROCE 24% 26% 27% 27% 29% 27%

ROE 25% 26% 28% 29% 32% 29%

2023 2024 2025 2026

3 4 4 5

1 2 2 3

0.09 0.08 0.08 0.07

100% 102% 104% 106%

22% 22% 22% 22%

17% 17% 16% 16%

27% 27% 27% 27%

29% 29% 29% 29%