tag:blogger.com,1999:blog-7004453.post112906272024179316..comments2023-09-02T19:53:06.144+05:30Comments on Understanding and applying value investing principles: Infosys Technologies results – some thoughtsRohit Chauhanhttp://www.blogger.com/profile/00356455735241398199noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-7004453.post-1129387570292584532005-10-15T20:16:00.000+05:302005-10-15T20:16:00.000+05:30BTW, (fyi) Bajaj results are out - 30% topline yoy...BTW, (fyi) Bajaj results are out - 30% topline yoy, and 40% OP yoy!Value Architectshttps://www.blogger.com/profile/08725808087736481381noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-1129285867715807442005-10-14T16:01:00.000+05:302005-10-14T16:01:00.000+05:30I understand that! Whose bread I eat, his song I s...I understand that! Whose bread I eat, his song I sing.<BR/><BR/>However wat irks me the most in case of Infy is their indiscriminate issue of shares, and poor dividend payment (not many people will digest this - but if you look into cash flow statement closely, u will understand....) <BR/><BR/>If I am a shareholder in Infy, I will share the burden of expansion (entertaining campus/hotel/golf,etc), rather than reap the rewards of myshareholding. While all these entertaining campuses can be done with the internal accruals, Infy is indiscriminately issuing shares to FIIs - that too when their cash-kitty swells. Also, I dont understand their apathy towards debt - on one hand they proclaim themselves as a (stable business model) services company - on the other hand, they want to play like a product company and maintain riskless-debt-free books????<BR/><BR/>I think, Infy, in its bid to expand, is actually screwing small shareholder and keeping FIIs happy!Value Architectshttps://www.blogger.com/profile/08725808087736481381noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-1129227683368576892005-10-13T23:51:00.000+05:302005-10-13T23:51:00.000+05:30i agree with several of your points and which is w...i agree with several of your points and which is why i have said 'if' (which is a big if) infosys were to grow to the size of accenture , the current valuation may be justified. however that is a long term arguement. in the short term anything can go wrong. <BR/>i have not read bajaj/ HH annual report and would not be able to comment on that. The point worth noting for infosys is that it has huge cash flows and phenomenal return on equity ( > 100 % on tangible assets). sustainability of these returns is obviously a key point. not too many companies outside the IT services enjoy that kind of returns.<BR/>in addition when a company sells at a PE of > 20 - 25 , there is definitely an element of faith / optimism built into it. some companies may fullfil it (ex : microsoft, dell or IBM ), but most will not. <BR/>on a personal level, my analysis can never be completely rational as i have worked in the company for several years and have had very good association with it.Rohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-1129221234559560412005-10-13T22:03:00.000+05:302005-10-13T22:03:00.000+05:30The fact that Indian economy is 50% dependent on s...The fact that Indian economy is 50% dependent on services, makes hype about IT/Infy scary. Include into it the effects of effects - aka - job losses/salary drops/etc due to some goofup in US - it will lead to a big drop in consumerism in India, which will have an affect on other sectors in the economy.<BR/><BR/>Secondly - Checking out nos in other industries in the country, Infosys performance looks nothing exceptional, but OK. For ex-HH/Bajaj- they are generating better FCFs - but maybe Infy will always remain in hype b'cos of its strong shareholder orientation,etc vs these desi companies.<BR/><BR/>All said and done- we have a habit of extending the recent past into distant future. I dont see any reason, why Infy shouldnt CRASH big time with a whiff of problem in US/blore, etc - there is no margin of safety - there is no reason of holding it!<BR/>So enjoy "your" infy till the music lasts.Value Architectshttps://www.blogger.com/profile/08725808087736481381noreply@blogger.com