AMA Final Project Proposal

E q u i t y I n v e s t m e n t O p p o r t u n i t y A n a l y s i s : C a s e o f I T S e c t o r

1 | P a g e D i p l o m a i n F i n a n c i a l M a n a g e m e n t

(A Case of IT Sector)

Diploma in Financial Management

(Batch – 24)

January – 2011 to June - 2011

Submitted By

Pranab Nanda Pratik Parikh

Ankit Iyer Jaydeep Kalaria



Diploma in Financial Management (Batch 24)

The Proposal

Group Members:

1. Pranab Nanda 2. Pratik Parikh

3. Ankit Iyer 4. Jaydeep Kalaria

Project Title: Equity Investment Opportunity Analysis: Case of IT Sector

I. Background

People now days are going ahead in investing in Equity markets since it is considered as one of the best

asset classes for investment all over the world. The equity market offers more returns to an investor

compare to the traditional meagre returns offered by banks for deposits for a specific period of time.

Though the equity market offers better returns, it is associated with certain risks also. The higher the

return, the higher the risk associated is. The equity market is driven by supply and demand. Most of the

investors invest in equity market based on hot tips from friends, phone calls from a broker or

recommendations from a TV analyst. They buy equities when the market is hot. But when the market

gets cold, they panic, sell equities and bear huge loss. The primary concern of the study is to estimate

the return from a particular investment, mainly for long term investment purpose, not for speculation

purpose. So the basic idea of conducting this project is to prepare a method which can guide a common

man how to identify potential equities for investment purpose.

II. Objectives:

1. To study three potential public limited companies in a particular Sector

2. To conduct comparative analysis of financial ratios from investment point of view

3. To identify, analyse and evaluate factors that affect equity investment

4. To select the best stock in a particular Sector

III. Scope:

1. The project covers sectoral analysis and equity analysis of three potential public limited companies

of a particular sector;



2. The following components of the Equity market will be studied and presented:

A. Prevailing policies as per Reserve Bank of India

B. Balance Sheet and Profit & Loss Analysis include Changes in Capital Structure, Returns on

Investment, Return on Equity, Changes in Capital Structure, Bonus given by Company, Profit

relativity, Market Price, Volume Analysis, Dividend Pattern;

C. Fundamental analysis of selected companies in a particular sector;

IV. Methodology:

The entire project is based on exploratory design and the process of the project shall be executed into

the following modules:

Module Particulars

1 Quick review of 14 sectors of equity market and Selection of a particular sector

2 Selection of three companies of a particular sector and review of history and past

performance of three companies

3 Assessment of Profit & Loss Account and Balance Sheet of 3 selected companies for the

past five years

4 Analysis of Financial Ratios related to Equity Investment, Dividend Pattern, Volume

Analysis of that particular company

Project Review and Presentation 1

5 Incorporation of Inputs from Project Review 1

6 Analysis of Financial Ratios related to Equity Investment, Dividend Pattern, Volume

Analysis of other two companies

Project Review and Presentation 2


8 Preparation of recommendations, strategies and guidelines for selection of Best Stock, its

price tend and target of a particular Sector

9 Submission of Final Project Report along with recommendations and strategies

Presentation on Final Report

V. Relevance/ Significance:

1. To prepare a guideline for a Investor for investing in potential equity;

2. To enhance wealth of Investors and guide them through report;

3. An Investor can assess and determine whether investment in any of the proposed security is worth

or not;

VI. Limitations:

1. The project is based on secondary data available on public domain;

2. Investment in Equity Market is subject to Market risk. The Investor should read our

recommendations and the documents of the company carefully before investing;



VII. Project Study Timeframe

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8 Preparation of Recommendations and Drafting

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Acknowledgements

First and foremost, we take this opportunity to express our deep sense of gratitude to Dr. P. V. Desai for

his invaluable guidance and encouragement making sure that this project work stayed on track. Under

his guidance this project work was a great learning experience itself.

Further we are grateful to our faculty members Mr. Snehal Desai and Mr. Divyesh Desai for their

important inputs and for augmenting our knowledge in Equity Sector.

Our sincere thanks to Mr. Janardan, Registrar, AMA Diploma Programmes and all the staff members of

AMA for all their support and help in this project work.

We would also like to thank our friends for all their help, support, interests and valuable hints without

that this project would never been completed.

It would be difficult to sum up in words our gratitude towards our families for being the pillar of

strength throughout the project work and compromising their time and the least we could do to

reciprocate that in our own way is dedicate this project work to our families.



Table of Contents

I. Introduction: ............................................................................................................................................................. 8

A. Financial Market- An Introduction................................................................................................................................. 8

B. Expenditures Vs Investment .......................................................................................................................................... 9

C. Why Equity Investment ................................................................................................................................................. 9

D. Investing Principles ........................................................................................................................................................ 9

E. FIIs and Indian Equity Market ...................................................................................................................................... 10

F. Rules and Regulations in the Indian Equity Market ..................................................................................................... 11

II. Selection of IT Sector ................................................................................................................................................13

A. Why IT Equity Sector ................................................................................................................................................... 13

B. IT Equity Sector Profile in India.................................................................................................................................... 13

C. Swot Analysis of Indian IT Sector ................................................................................................................................. 14

III. Company Profiles of IT Sector ...................................................................................................................................15

1. Tata Consultancy Services Limited........................................................................................................................15

A. Background:................................................................................................................................................................. 15

B. History: ........................................................................................................................................................................ 15

C. Board of Directors ....................................................................................................................................................... 16

D. Operations and acquisitions ........................................................................................................................................ 17

E. Innovation and R&D .................................................................................................................................................... 17

F. Employees ................................................................................................................................................................... 18

G. Awards & Recognitions................................................................................................................................................ 18

H. Subsidiaries .................................................................................................................................................................. 19

2. Infosys .................................................................................................................................................................21

A. Background .................................................................................................................................................................. 21

B. History ......................................................................................................................................................................... 21


D. Current share holding .................................................................................................................................................. 22

E. Initiatives ..................................................................................................................................................................... 22

F. Research ...................................................................................................................................................................... 23

G. Charity ......................................................................................................................................................................... 23

H. Global offices ............................................................................................................................................................... 23

I. Awards & Recognitions................................................................................................................................................ 24

3. Wipro Ltd .............................................................................................................................................................25

A. Background .................................................................................................................................................................. 25

B. History ......................................................................................................................................................................... 25


D. Innovations .................................................................................................................................................................. 26

E. Wipro BPO ................................................................................................................................................................... 26

F. Wipro Group Companies ............................................................................................................................................. 26

G. Awards & Recognitions................................................................................................................................................ 28

IV. Key Indicators for Stock Selection .............................................................................................................................29

A. Growth in Profit and Sales ........................................................................................................................................... 30

B. Earnings per Share ....................................................................................................................................................... 32

C. Price Earning (P/E) Ratio .............................................................................................................................................. 34

D. DPS (Dividend per Share)............................................................................................................................................. 36

E. Return on Net worth (Equity + Reserves) .................................................................................................................... 38

F. Dividend/ Net Profit .................................................................................................................................................... 40

G. Return on Long Term Funds (%) .................................................................................................................................. 42

H. Price Analysis ............................................................................................................................................................... 43

V. Conclusion & Recommendations ..............................................................................................................................45



VI. References................................................................................................................................................................47

VII. Appendices ...............................................................................................................................................................48

Appendix 1 Balance Sheet: Tata Consultancy Services .............................................................................................................. 49

Appendix 2 Profit & Loss Account Statement: Tata Consultancy Services ................................................................................. 50

Appendix 3 Cash Flow Statement: Tata Consultancy Services ................................................................................................... 51

Appendix 4 Balance Sheet: Infosys ............................................................................................................................................ 52

Appendix 5 Profit & Loss Account Statement: Infosys ............................................................................................................... 53

Appendix 6 Cash Flow Statement: Infosys ................................................................................................................................. 54

Appendix 7 Balance Sheet: Wipro Ltd ........................................................................................................................................ 55

Appendix 8 Profit & Loss Account Statement: Wipro Ltd .......................................................................................................... 56

Appendix 9 Cash Flow Statement: Infosys ................................................................................................................................. 57



I. Introduction:

A. Financial Market- An Introduction

A financial market is a mechanism that allows people to buy and sell (trade) financial securities (such as

stocks and bonds), commodities (such as precious metals or agricultural goods), and other fungible

items of value at low transaction costs and at prices that reflect the efficient-market hypothesis.

Both general markets (where many commodities are traded) and specialized markets (where only one

commodity is traded) exist. Markets work by placing many interested buyers and sellers in one "place",

thus making it easier for them to find each other. An economy which relies primarily on interactions

between buyers and sellers to allocate resources is known as a market economy in contrast either to a

command economy or to a non-market economy such as a gift economy.

Financial market also performs an important function of mobilization of savings and channelling them

into the most productive uses. The participants in the financial markets are financial institutions, agents,

brokers, dealers, borrowers, lenders, savers and others who are inter-linked by the laws, contracts and

communication networks.

The financial markets facilitate:

� The raising of capital (in the capital markets)

� The transfer of risk (in the derivatives markets)

� The transfer of liquidity (in the money markets)

� International trade (in the currency markets)

– and are used to match those who want capital to those who have it.

Typically a borrower issues a receipt to the lender promising to pay back the capital. These receipts are

securities which may be freely bought or sold. In return for lending money to the borrower, the lender

will expect some compensation in the form of interest or dividends.

Financial markets consist of Primary and Secondary Markets. The Primary markets deal in new financial

claims and securities and hence are known as new issue markets. The secondary market deals in

securities already issued, existing or outstanding. Financial markets are also classified as Money and

Capital Markets. Money markets deals with transactions in short-term instruments (with period of

maturity one year or less, e.g. treasury bills), while capital market deals with transactions in long-term

instruments (with period of maturity above one year, e.g. corporate debentures and government

bonds). On the basis of the type of the financial claim, financial markets are classified as Debt and Equity

markets. By the timing of delivery, financial markets are classified as Cash or Spot markets and Forward

or Future market.



Equity is a term whose meaning depends very much on the context. In general, one can think of equity

as ownership in any asset after all debts associated with that asset are paid off. For example, a car or

house with no outstanding debt is considered the owner's equity since he or she can readily sell the

items for cash. Stocks are equity because they represent ownership of a company, whereas bonds are

classified as debt because they represent an obligation to pay and not ownership of assets.

B. Expenditures Vs Investment

“To earn money is my duty, but save money is my responsibility & responsibility is always more than

duty...” - Anonymous

C. Why Equity Investment

Equity is a term whose meaning depends very much on the context. In general, one can think of equity

as ownership in any asset after all debts associated with that asset are paid off. For example, a car or

house with no outstanding debt is considered the owner's equity since he or she can readily sell the

items for cash. Stocks are equity because they represent ownership of a company, whereas bonds are

classified as debt because they represent an obligation to pay and not ownership of assets.

Equity investment is preferred as one of the best investment because of the following reasons:

� the possibility of incredibly high returns and wealth creation.

� It will not only earn capital appreciation but also dividend yield also.

� Chances of getting bonus share.

� Entitle to have benefits of split share from corporate action of company.

� All dividends are tax free, one has to pay only a 10% short term capital gains tax on profits made

within a year, and all profits earned after a year are exempted of long term capital gain tax.

� the investment is perfectly liquid as one can sell your share and redeem the gains at any time.

D. Investing Principles

An investor should always remember the following investing principles:

1) Invest for Real Returns



2) Keep an Open Mind

3) Never Follow the Crowd

4) Everything Changes

5) Avoid the Popular

6) Learn from your Mistakes

7) Buy During Times of Pessimism

8) Hunt for Value and Bargains

9) Search Worldwide

10) No-one Knows Everything

The investor should bear in mind that while he makes investment decision, he should have idea of the

company’s break-even point and company’s position in the stock exchange.

E. FIIs and Indian Equity Market

The era of FIls investments in India originated in 1993 and the net investment during the year was

$827.20 million. FIls of different countries, mainly the US, started operating in India. The number of FIls

in India has grown over the year to nearly 500. The big names include Morgan Stanley, Templeton,

Capital International, CDC, Warburg, and JFAM.

As per the definition of RBI, a FIl is an institution established or incorporated outside India, which

proposes to make investments in Indian securities. Such institutions have been permitted to invest in

Indian securities markets starting from September 1992 when the then authorities issued suitable

guidelines. The FIls are subject to stringent monitoring. They are required to register with RBI and the

SEBI before they commence their operations.

Foreign Institutional Investors (FIls) during the last one-decade have become an integral part of Indian

equity markets. They have been an incredible source of money ever since. The clout of the FIls is such

that the market players anticipate their arrival with breathless anxiety. This reputation of the FIls is a

well-earned status. The authority of these institutions is evident from the very fact that by the mere

news of their arrival it is sufficient for the market to supplement itself with a double-digit growth.

Truly, the FIls have emerged as a masculine unit in recent times. FIls support the markets by unlocking

their chests and rejuvenating the secondary markets. Performance of the secondary market brings cheer

to the new issues market thus allowing companies to raise fresh capital. As evident, a healthy FII activity

helps fund new projects and expansions, creating new jobs and triggering all positive things that come



as a surprise gift. From the Central Bank's point of view, FIls, investments impart confidence to the

economy by providing cushion in the form of forex reserves.

This trend of Indian equity markets to that of FIIs investment though encouraging, has to be treated

cautiously. Although the investments have provided with the much needed liquidity and depth in the

markets, the role played by the fly-by-night operators in creating panic is some of the Asian economies

do Indian markets face a risk. Portfolio flows are notoriously volatile compared to other forms of capital

flows, as FIls usually pull back portfolio investments at the slightest hint of trouble in the host country

often leading to disastrous consequences to its economy. FIls have been blamed for exacerbating small

economic problems in a country by making large and concerted withdrawals at the first sign of economic

weakness. However, RBI and SEBI has been prudent enough in enforcing strict guidelines for FIls

entering India and controlling the repatriation of the investment.

Ever since they entered India in 1993, the market has moved nowhere between 1993 and now. Despite

an over burdened economy and infrastructure bottlenecks, companies like RIL, HLL, HDFC, Infosys,

Ranbaxy, and Dr. Reddy's have given consistently excellent performance over the years and this has

encouraged FIls to invest in the stocks of these companies which holds a major weightage in sensex. For

global fund managers, top down is the preferred approach as their portfolios consist of securities across

many markets, which make it too cumbersome to follow a bottom-up strategy in each market.

F. Rules and Regulations in the Indian Equity Market

The Government of India has been trying to improve market efficiency, enhance transparency and bring

the Indian Equity Market up to international standards. Many reform measures have been initiated in

the 90s. The principal ones are the formation of Securities Exchange Board of India (SEBI), repeal of the

Capital Issues (Control) Act, 1947, introduction of screen-based trading, shortening of trading cycle,

demutualization of stock exchanges, establishment of depositories disappearance of physical share

certificates and better risk management systems in stock exchanges.

The formation of Sebi was the first attempt towards integrated regulation of the securities market. Sebi

regulates all market intermediaries and has the powers to impose monetary penalties for misconduct of

any intermediary. One of the major stumbling blocks in fair pricing of capital issues has been the Capital

Issues (Control) Act, 1947. The issuers were denied the opportunity to economically raise money from

the capital market. This is now a matter of the past thanks to the repeal of the Act itself. Sebi has also

issued Disclosure and Investor Protection (DIP) guidelines to ensure fair prices for the investors, though

however, many issuers in the 90s could unfairly price their capital issues at the cost of the poor common

investors.

The introduction of Screen Based Trading Systems (SBTS) by NSE is a major development in the capital

market. This made the markets more efficient. The geographical barriers to trade were dismantled

resulting in increased trading volumes. This was possible due to the great advancements in the area of



information technology. SBTS electronically matches orders cutting down time, cost and errors, and

minimizing the chances of fraud. Very long settlement cycle was another major hindrance in effecting

deliveries in the equity market. Often the securities were delivered after 30 days or more due to

weekly/fortnightly settlements and carry forward transactions. Sebi has enforced the discipline to

compulsorily settle trades in T+3 days since April 2002. This is slated to reduce to T+2 days from April

2003. All scrips are now under rolling settlement since December 2001.

The Equity Market is incomplete without products to manage risks in portfolio values. At long last,

derivatives trading appeared on Indian exchanges in June 2000. While the product range in derivatives is

still limited (futures and options on stocks and stock indices), it is certainly a major step forward in

broadening the financial markets.

NSE was established as a demutualized structure separating the roles of ownership, management and

trading to eliminate any conflict of interest among the stakeholders to improve market efficiency and to

focus on investor interest. Another notable development in the Indian equity market has been the

introduction of depositories to dematerialize the share certificates. This avoids physical movement of

certificates, bad deliveries and quicker transfer of ownership of shares. Presently all actively traded

shares are held, traded and settled in demat form. The setting up of National Securities Clearing

Corporation Ltd., (NSCCL) in April 1996 has been a major development in managing counterparty risks in

the equity market. This has helped in increasing trading volumes since traders are now more confident

about default-free settlements. While most of the above measures have helped in reinforcing

confidence in the Indian equity market by providing more transparent and efficient buying, selling and

transfer of shares.

The Government of India has recently released a comprehensive FDI policy document effective from

April 1, 2010. The Circular 1 of 2010 consolidates into one document all the prior policies/regulations on

FDI which are contained in FEMA, 1999, RBI Regulations under FEMA, 1999 and Press Notes/Press

Releases/Clarifications issued by DIPP and reflects the current ‘policy framework’ on FDI. The

government has also promised to bring out an updated FDI policy every six months as stated in a

comprehensive press note consolidating the entire regime for foreign investments in one place for easy

reference. Furthermore, the government has allowed the Foreign Investment Promotion Board (FIPB),

under the Ministry of Commerce and Industry, to clear FDI proposals of up to US$ 258.3 million. Earlier

all project proposals that involved investment of above US$ 129.2 million were put up before the

Cabinet Committee of Economic Affairs (CCEA) for approval. The relaxation would expedite FDI inflow,

according to the Union Home Minister, Mr P Chidambaram



II. Selection of IT Sector

A. Why IT Equity Sector

Information Technology (IT), a knowledge-based industry, has the tremendous potential of becoming an

engine of accelerated economic growth, productivity improvement for all sectors of the economy and

means of efficient governance. It enhances access to information, protects consumers, provides access

to government services, makes skill formation and training more effective, improves delivery health

services, and promotes transparency. It provides tremendous employment potential and linkages

between government and the people both at the rural and urban level. Investment in knowledge based

industries will determine the level of the country’s dominant position in the world economy in the next

two decades.

B. IT Equity Sector Profile in India

The Indian IT software and service industry has emerged as one of the fastest growing sectors in the

Indian economy, with a growth rate exceeding 50 per cent in exports and 40 per cent in the total IT

industry over the last five years. Table 1 shows the turnover of this industry including domestic and

exports.

Table 1

Indian Software and Service Industry (USb$)

Year Domestic Exports Total %Growth rate

(export)

% Growth rate (domestic

and export)

1994-95 0.35 0.485 0.835

1995-96 0.49 0.734 1.224 51.34 46.60

1996-97 0.67 1.085 1.755 47.82 43.40

1997-98 0.95 1.750 2.700 61.29 53.80

1998-99 1.25 2.650 3.900 51.43 44.40

1999-2000 1.70 4.000 5.700 50.94 46.10

2000-01 1.96 6.300 8.260 57.50 44.90

Source: Based on Hanna (1994), Heels (1995) and Masco (2001)

As per recent data net profit growth rate came from refineries, Information technology, mining,

automobile, pharmaceuticals, textile etc. reported above 50% growth.



From the above analysis, it can be observed that in 2000, the Private Equity Investments in India was

majorly dominated by IT & ITES. Subsequently the shift takes place to several other sectors esp.

manufacturing, financial services, and healthcare increasing significantly. Though the share of new areas

of investment takes place which include Engineering & Construction, Textiles, Logistics, Food and

Beverages have emerged, there are still substantial private equity investments in IT & ITES sector.

C. Swot Analysis of Indian IT Sector

Based on the past performances, the SWOT analysis of Indian IT Sector can be categorised as follows:

STRENGTHS WEAKNESS

� Large no. of talented graduates

� Affordable and quality education as compared

to developed countries

� English language benefit

� Well-developed IT industry

� Strong customer base of well known

companies

� Powerful venture capital interest in investing

in growth opportunity

� Scarce foreign language skills other than

English.

� Lack of customer service culture

� Expensive and poor quality telecom

infrastructure

� Poor electricity supply

� Cultural differences

� High attrition rates, therefore less no. of

people with extensive call centre experience

OPPORTUNITIES THREATS

� Horizontal and vertical expansion of existing

customer base into new markets

� Time zone difference between India and target

markets

� Increasing awareness of outsourcing services

� High Billing rates

� Political instability

� India's competitors in Eastern Europe, Latin

America and the Asia Pacific regions offering

cheap BPO services

� Increasing technology automation



III. Company Profiles of IT Sector

1. Tata Consultancy Services Limited

A. Background:

Tata Consultancy Services Limited (TCS) (BSE: 532540, NSE: TCS) is an Indian IT services, business

solutions and outsourcing company headquartered in Mumbai, India. TCS is the largest provider of

information technology in Asia and second largest provider of business process outsourcing services in

India. TCS has offices in 42 countries with more than 142 branches across the globe. The company is

listed on the National Stock Exchange and Bombay Stock Exchange of India.

TCS is one of the operative subsidiary of one of India's largest and oldest conglomerate company, the

Tata Group or Tata Sons Limited, which has interests in areas such as energy, telecommunications,

financial services, manufacturing, chemicals, engineering, materials, government and healthcare.

B. History:

It began as the "Tata Computer Centre", for the company Tata Group whose main business was to

provide computer services to other group companies. F C Kohli was the first general manager. J. R. D.

Tata was the first chairman, followed by Nani Palkhivala.

One of TCS' first assignments was to provide punched card services to a sister concern, Tata Steel (then

TISCO). It later bagged the country's first software project, the Inter-Branch Reconciliation System (IBRS)

for the Central Bank of India. It also provided bureau services to Unit Trust of India, thus becoming one

of the first companies to offer BPO services.

In the early 1970s, Tata Consultancy Services started exporting its services. The company pioneered the

global delivery model for IT services with its first offshore client in 1974. TCS's first international order

came from Burroughs, one of the first business computer manufacturers. TCS was assigned to write

code for the Burroughs machines for several US-based clients. This experience also helped TCS bag its

first onsite project - the Institutional Group & Information Company (IGIC), a data centre for ten banks,

which catered to two million customers in the US, assigned TCS the task of maintaining and upgrading its

computer systems.

In 1981, TCS set up India's first software research and development centre, the Tata Research

Development and Design Center (TRDDC) in Pune. The first client-dedicated offshore development

center was set up for Compaq (then Tandem) in 1985.



In 1979, TCS delivered an electronic depository and trading system called SECOM for SIS SegaInterSettle,

Switzerland. It was by far the most complex project undertaken by an Indian IT company. TCS followed

this up with System X for the Canadian Depository System and also automated the Johannesburg Stock

Exchange (JSE). TCS associated with a Swiss partner, TKS Teknosoft, which it later acquired.

In the early 1990s, the Indian IT outsourcing industry grew tremendously due to the Y2K bug and the

launch of a unified European currency, Euro. TCS pioneered the factory model for Y2K conversion and

developed software tools which automated the conversion process and enabled third-party developers

and clients to make use of it.

In 1999, TCS saw outsourcing opportunity in E-Commerce and related solutions and set up its E-Business

division with ten people. By 2004, E-Business was contributing half a billion dollars (US) to TCS.

On 9 August 2004, TCS became a publicly listed company, much later than its rivals, Infosys, Wipro and

Mahindra Satyam.

During 2005, TCS ventured into a new area for an Indian IT services company - Bioinformatics.

In 2008, the company went through an internal restructuring exercise that executives claim would bring

about agility to the organization.

C. Board of Directors

The following are the Board of Directors:

a. Non-Executive Board Members

1) Ratan N Tata, Chairman

2) S Ramadorai, Vice Chairman

3) Laura Cha, Director

4) Prof. Clayton M Christensen, Director

5) Aman Mehta, Director

6) Dr. Ron Sommer, Director

7) Venkatraman Thyagarajan, Director

8) Dr. Vijay Kelkar, Director

9) Ishaat Hussain, Director

b. Executive Board Members

1) N Chandrasekaran, Chief Executive Officer and Managing Director

2) S Mahalingam, Chief Financial Officer and Executive Director

3) Phiroz A Vandrevala, Executive Director and Head, Global Corporate Affairs



D. Operations and acquisitions

a. Indian branches

TCS had development centres and/or regional offices in the following Indian cities: Ahmedabad, Baroda,

Bangalore, Bhubaneswar, Chennai, Coimbatore, Gurgaon, Kochi, Kolkata, Lucknow, Mumbai, Noida,

Pune, Thiruvananthapuram, Patna, Jaipur, Jamshedpur, Hyderabad.

b. Global units

1) Africa: South Africa, Morocco

2) Asia (Outside India): Bahrain, Beijing[17], Hong Kong, Hangzhou, Shanghai, Indonesia, Israel,

Japan, Malaysia, Saudi Arabia, Singapore, South Korea, Taiwan, Thailand, UAE (Dubai)

3) Australia: Australia

4) Europe: Belgium, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy,

Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom

5) North America: Canada, Mexico, USA

6) South America: Argentina, Brazil, Chile, Colombia, Ecuador, Uruguay, Peru

E. Innovation and R&D

a. Tata Research Development and Design Center

TCS established the first software research center in India, the Tata Research Development and Design

Center, in Pune, India in 1981. TRDDC undertakes research in Software Engineering, Process Engineering

and Systems Research.

Researchers at TRDDC also developed Master-Craft (now called TCS Code Generator Framework) a

Model Driven Development software that can automatically create code based on a model of a

software, and rewrite the code based on the user's needs.

Research at TRDDC has also resulted in the development of Sujal, a low-cost water purifier that can be

manufactured using locally available resources. TCS deployed thousands of these filters in the Indian

Ocean Tsunami disaster of 2004 as part of its relief activities. This product has been marketed in India as

Tata swach, a low cost water purifier.

b. Innovation

In 2007, TCS launched its Co-Innovation Network, a network of TCS Innovation Labs, startup alliances,

University Research Departments, and venture capitalists. In addition to TRDDC, TCS has 19 Innovation

Labs based in three countries.

� TCS Innovation Lab, Convergence: Content management and delivery, convergence engines,

networks such as 3G, WiMax, WiMesh, IP Testing for Quality of Service, IMS, OSS/BSS systems, and

others.



� TCS Innovation Lab, Delhi: Software Architectures, Software as a Service, natural language

processing, text, data and process analytics, multimedia applications and graphics.

� TCS Innovation Lab, Embedded Systems: Medical electronics, WiMAX, and WLAN technologies.

� TCS Innovation Lab, Hyderabad: Computational methods in life sciences, meta-genomics, systems

biology, e-security, smart card-based applications, Linux and open source, digital media protection,

nano-biotechnology, quantitative finance.

� TCS Innovation Lab, Mumbai: Speech and natural language processing, wireless systems and

wireless applications.

� TCS Innovation Lab, Insurance - Chennai: IT Optimization, Business Process Optimization, Customer

Centricity Enablers, Enterprise Mobility, Telematics, Text Analytics, 2D Barcodes, Mashups,

Innovation in Product Development and Management (PLM) for Insurance.

� TCS Innovation Lab, Chennai: Infrastructure innovation, green computing, Web 2.0 and next-

generation user interfaces.

� TCS Innovation Lab, Peterborough, England: New-wave communications for the enterprises, utility

computing and RFID (chips, tags, labels, readers and middleware).

� TCS Innovation Lab: Performance Engineering, Mumbai: Performance management, high

performance technology components, and others.

� TCS Innovation Lab, Cincinnati, United States: Engineering and Manufacturing IT solutions.

Some of the assets created by TCS Innovation Labs are DBProdem, Jensor, Wanem, Scrutinet

In 2008, the TCS Innovation Lab-developed product, mKrishi, won the Wall Street Journal Technology

Innovation Award in the Wireless category. mKrishi is a service that would enable India's farmers to

receive useful data on an inexpensive mobile device.

TCS' Co-Innovation Network partners include Collabnet, Cassatt, MetricStream, academic institutions

such as Stanford, MIT, various IITs, and venture capitalists like Sequoia and Kleiner Perkins.

F. Employees

TCS is one of the largest private sector employers in India with a core strength in excess of 186,914

individuals. TCS has one of the lowest attrition rates in the Indian IT industry. In the past TCS has been

criticised by its employees in Public forums on its Appraisal and Promotion policies.

G. Awards & Recognitions

As a brand, TCS is the 76th Most Trusted Brand according to The Brand Trust Report, 2011.



H. Subsidiaries

TCS' directly-held subsidiaries include the following:

� CMC Limited (India)

� WTI Advanced Technology Limited (India)

� APONLINE Limited (India)

� C-Edge Technologies Limited (India)

� MP Online Limited (India)

� Tata America International Corporation (USA)

� Tata Consultancy Services Netherlands BV (Netherlands)

� Tata Consultancy Services Belgium SA (Belgium)

� Tata Consultancy Services Sverige AB (Sweden)

� Tata Consultancy Services Deutschland GmbH (Germany)

� TCS Iberoamerica SA (Uruguay)

� Tata Consultancy Services Asia Pacific Pte Limited (Singapore)

� TCS FNS Pty. Limited (Australia)

� Diligenta Limited (UK)

� Tata Consultancy Services Canada Inc. (Canada)

� Tata Infotech (Singapore) Pte. Limited *(Singapore)

� (In Members' Voluntary Liquidation)

� Tata Consultancy Services Morocco SARL AU (Morocco)

� Tata Consultancy Services (Africa) (PTY) Limited (South Africa)

� TCS e-Serve Limited (India)

TCS' indirectly-held subsidiaries include the following:

� CMC Americas Inc (USA)

� TCS Italia SRL (Italy)

� TCS Inversiones Chile Limitada (Chile)

� TCS Solution Center SA (Uruguay)

� Tata Consultancy Services Argentina SA (Argentina)

� Tata Consultancy Services Do Brasil Ltda (Brazil)

� Tata Consultancy Services De España SA (Spain)

� Tata Consultancy Services De Mexico SA, De CV (Mexico)

� Tata Information Technology (Shanghai) Company Limited (China)

� Tata Consultancy Services Malaysia Sdn Bhd (Malaysia)

� Tata Consultancy Services Japan Limited (Japan)

� Tata Consultancy Services Luxembourg SA (Luxembourg)

� TCS Financial Solutions Australia Holdings Pty Limited (Australia)

� TCS Management Pty Limited (Australia)

� Tata Consultancy Services Switzerland Limited (Switzerland)

� PT Tata Consultancy Services Indonesia (Indonesia)

� Tata Consultancy Services (China) Co. Limited (China)

� Tata Consultancy Services (South Africa) (PTY) Limited (South Africa)

� Tata Consultancy Services (Thailand) Limited (Thailand)

� Tata Consultancy Services (Philippines) Inc. (Philippines)



� TCS e-Serve International Limited (India)

� ERI Holdings Corp (Canada)

� Tata Consultancy Services Chile SA (Chile)

� Tata Consultancy Services BPO Chile SA (Chile)

� Tata Consultancy Services Portugal Unipessoal Limitada (Portugal)

� TCS Financial Solutions Australia Pty Limited (Australia)

� PT Financial Network Services (Indonesia)

� Financial Network Services (Africa) (Pty) Limited (South Africa)

� Financial Network Services (HK) Limited (Hong Kong)

� Tata Consultancy Services France SAS (France)

� TCS e-Serve America, Inc. (USA)

� Exegenix Research Inc. (Canada)

� Financial Network Services Malaysia Sdn Bhd (Malaysia)

� Syscrom SA (Chile)

� Custodia De Documentos Interes Limitada (Chile)

� Tata Solution Center SA (Ecuador)

� Financial Network Services (Beijing) Co. Limited (China)



2. Infosys

A. Background

Infosys (BSE: 500209, NASDAQ: INFY) is an information technology services company headquartered in

Bengaluru (Bangalore), India. Infosys is one of the largest IT companies in India with 122,468 employees

(including subsidiaries) as of 2010. It has offices in 33 countries and development centres in India, China,

Australia, UK, Canada and Japan

B. History

Infosys was founded on 2 July 1981 by seven entrepreneurs, Nagavara Ramarao Narayana Murthy,

Nandan Nilekani, Kris Gopalakrishnan, S. D. Shibulal, K Dinesh and with N. S. Raghavan officially being

the first employee of the company. The founders started the company with an initial investment of INR

10,000. The company was incorporated as "Infosys Consultants Pvt Ltd." in Model Colony, Pune as the

registered office.

Infosys went public in 1993. Interestingly, Infosys IPO was under subscribed but it was bailed out by US

investment banker Morgan Stanley which picked up 13% of equity at the offer price of Rs. 95 per share.

The share price surged to Rs. 8,100 by 1999. By the year 2000 Infosys's shares touched Rs. 310. This,

before the catastrophic incident of September 11th, which caused share prices to suddenly fall.

According to Forbes magazine, since listing on the Bombay Stock Exchange till the year 2000, Infosys'

sales and earnings compounded at more than 70% a year. In the year 2000, President of the United

States Bill Clinton complimented India on its achievements in high technology areas citing the example

of Infosys. Infosys will invest $100 million (Rs 440 crore) on establishing a 20,000-seater campus in

Shanghai.

In 2001, it was rated Best Employer in India by Business Today. Infosys was rated best employer to work

for in 2000, 2001, and 2002 by Hewitt Associates. In 2007, Infosys received over 1.3 million applications

and hired fewer than 3% of applicants.

Infosys was the only Indian company to win the Global MAKE (Most Admired Knowledge Enterprises)

award for the years 2003, 2004 and 2005, and is inducted into the Global Hall of Fame for the same.


a. Infosys Members of the Board

1) Srinath Batni, Director and Head, Delivery Excellence

2) K. Dinesh , Director and Head, Communication Design Group, Information Systems and

Quality and Productivity

3) S. Gopalakrishnan, Chief Executive Officer and Managing Director



4) T. V. Mohandas Pai , Member of the Board of Directors, and Head – Administration,

Education and Research, Finacle, Human Resources, and Infosys Leadership Institute

5) N. R. Narayana Murthy, Chairman of the Board and Chief Mentor

6) S. D. Shibulal, Chief Operating Officer and Member of the Board

b. Independent Directors

1) David L. Boyles, Independent Director

2) Dr. Omkar Goswami, Independent Director

3) Sridar Iyengar, Independent Director

4) K. V. Kamath, Independent Director

5) Jeffrey Sean Lehman, Independent Director

6) Deepak M. Satwalekar, Independent Director

7) R Seshasayee, Independent Director

8) Dr. Marti G. Subrahmanyam, Lead Independent Director

D. Current share holding

Promoters and their families hold 16%.Govt. of India enterprise with 3.84% can be termed as the single

largest share holder. Govt. of UAE and Govt. of. Singapore also holds significant shares. Rest of the

shares is owned by Financial institutions, Individual investors.

E. Initiatives

Infosys has the largest corporate university in the world, located on its Mysore campus.

In 1996, Infosys created the Infosys Foundation in the state of Karnataka, operating in the areas of

health care, social rehabilitation and rural uplift, education, arts and culture. Since then, this foundation

has spread to the Indian states of Tamil Nadu, Andhra Pradesh, Maharashtra, Kerala, Orissa and Punjab.

The Infosys Foundation is headed by Mrs. Sudha Murthy, wife of Founder Cum Chief Mentor Narayan

Murthy.

Since 2004, Infosys has embarked on a series of initiatives to consolidate and formalize its academic

relationships worldwide under the umbrella of a program called AcE - Academic Entente. Infosys' Global

Internship Program, known as InStep, is one of the key components of the Academic Entente initiative.

It offers live projects to interns from the universities around the world. InStep recruits undergraduate,

graduate and PhD students from business, technology, and liberal arts universities to take part in an 8 to

24 week internship at one of Infosys' global offices. InStep interns are also provided career opportunities

with Infosys.

In 1997, Infosys started the "Catch them Young Program", to expose the urban youth to the world of

Information Technology by conducting a summer vacation program. The program is aimed at developing

an interest and understanding of computer science and information technology. This program is

targeted at students in Grade IX level.



In 2002, the Wharton Business School of the University of Pennsylvania and Infosys started the Wharton

Infosys Business Transformation Award. This technology award recognizes enterprises and individuals

who have transformed their businesses and the society leveraging information technology. Past winners

include Samsung, Amazon.com, Capital One, RBS and ING Direct.

Infosys has the largest corporate education center in the world in Mysore. It can accommodate 14000

candidates at one time.

In 2009, Infosys created Infosys Prize for excellence in Physical Sciences, Mathematical Sciences,

Engineering and Computer Science, Life Sciences and Social Sciences.

F. Research

Infosys developed a corporate R&D wing called Software Engineering and Technology Labs (SETLabs).

SETLabs was founded in 2000 to carry out applied research for the development of processes,

frameworks and methodologies to effectively capture customer requirements and to iron out common

critical issues during a project life cycle. Various broad groups are Software Engg Lab, Convergence Lab,

Innovation Lab, Center for KDIS, Security and Privacy Lab and Distributed Computing Laboratory.

G. Charity

In 2005, Infosys donated 10m rupees (about $226,000) to help with the effects of the 2005 Kashmir

earthquake in Pakistan. Infosys does not currently have an office in Pakistan.

H. Global offices

a. Asia Pacific

India - Bengaluru, Bhubaneswar, Chandigarh, Chennai , Coimbatore , Hyderabad, Jaipur, Mangalore,

Mysore, Pune, Thiruvananthapuram Kolkata(2012),[25] Australia - Melbourne, Sydney and China -

Beijing, Shanghai, Hong Kong, Tokyo, Mauritius, Wellington- New Zealand, Sharjah- UAE, Taguig City-

Philippines, Suva- Fiji Island and Bangkok- Thailand

b. North America

Canada - Toronto, USA - Atlanta (GA), Bellevue (WA), Bridgewater (NJ), Charlotte (NC), Southfield (MI),

Fremont (CA), Houston (TX), Glastonbury (CT), Lake Forest (CA), Lisle (IL), New York, Phoenix (AZ), Plano

(TX), Quincy (MA), Reston (VA) and Mexico - Monterrey

c. Europe

Czech Republic - Brno, Belgium - Brussels, Denmark - Copenhagen, Finland - Helsinki, France - Paris,

Germany - Frankfurt, Stuttgart, Italy - Milano, Norway - Oslo, Poland - Łódź, The Netherlands -

Amsterdam, Spain - Madrid, Burgos, Sweden - Stockholm, Switzerland - Zürich, Geneva and UK - Canary

Wharf, London



d. South America

Brazil - Belo Horizonte

I. Awards & Recognitions

Infosys was ranked among the top 50 most respected companies in the world by Reputation Institute’s

Global Reputation Pulse 2009. It has been voted the 'Most Admired Indian Company' in The Wall Street

Journal Asia 200 every year since 2000. It won Sears Holding Corporation's Partners in Progress award

for the second consecutive year. It also won HDS' Diamond Award for 'Best Virtualization Strategy' and

Platinum Award for 'Best Green Strategy for a Data Center'. Infosys was listed in the Most Admired

Knowledge Enterprises (MAKE) 2008 study and Forbes' Asian Fabulous 50 for the fourth consecutive

year. It was ranked among the 'Best Companies for Leaders' in a survey by Bloomberg BusinessWeek

and Hay Group in 2009, 'India's Best Companies to Work For - 2009' in a survey by the Great Place to

Work Institute and conferred with the NASSCOM gender inclusivity award. Asset magazine acclaimed

infosys’s Corporate Governance, acknowledging its corporate policies and practices as among the best in

the industry.



3. Wipro Ltd

A. Background

Wipro Ltd (BSE: 507685, NYSE: WIT) is a giant information technology services corporation

headquartered in Bangalore, India. According to the 2008–09 revenue, Wipro is one of the largest IT

services company in India and employs more than 119,491 people worldwide as of September 2010. It

has interests varying from information technology, consumer care, lighting, engineering and healthcare

businesses. It is 9th most valuable brand in India according to an annual survey conducted by Brand

Finance and The Economic Times in 2010. Azim Premji is the Chairman of the board.

B. History

The company was established in 1980 as subsidiary of Wipro Limited listed on New York Stock Exchange.

Wipro was initially set up in 1945 with main product of producing sunflower Vanaspati Oil and different

soaps. At that time Company was called Western India Vegetable Products limited with representative

offices in Maharashtra and Madhya Pradesh states of India. During 1970s and 1980s it shifted its focus

and begin to look into business opportunities in IT and computing industry which was at nascent stages

in India at that time. Wipro was the first company which marketed the first indigenous homemade PC

from India in 1975. In 1966 Azim Premji, still the majority shareholder in Wipro, took over as the

chairman of the company at the age of 21 and with the passage of time transformed it into one of the

finest and largest IT outsourcing services provider of the world.


Azim H. Premji, Chairman

a. Executive Directors

1) T. K. Kurien, CEO, IT Business & Executive Director, Wipro Limited

2) Suresh C. Senapaty, Executive Director & Chief Finance Officer, Wipro Limited

b. Independent Directors

1) Ashok S. Ganguly

3) C. Prabhakar

4) Dr. Henning Kagermann

5) Jagdish N. Sheth

6) N. Vaghul



7) P. M. Sinha

8) William Arthur Owens

9) Shyam Saran

D. Innovations

Wipro Advisory Board provides a strategic direction to the innovative initiatives at Wipro. The

incubation of ideas is overseen by the Innovation Council who also look into the process and budgetary

flow of the project. Innovation is driven by the various Centers of Excellence (CoEs) that work on

projects related to specific domains like,

� Automotive

� CRM

� Data Warehouse

� Portals and Content Management

� Security

� Storage

� Linux

� Mobile

� Multimedia

� .NET

� Supply Chain

� Web Services

E. Wipro BPO

Wipro BPO employs over 22,000, of whom 3,150 are at its Hyderabad campus. The planned new

recruitments will be from among science and commerce graduates and under-graduates. The majority

of Wipro BPO’s business comes from the US, followed by Europe. The rest of the world contributes only

marginally to its top line. The company posted a turnover of $290 million in FY08. Founded in 2002,

Wipro BPO has operations in Delhi, Pune, Kolkata, Chennai, Mumbai, Hyderabad, Navi-Mumbai

(Belapur) Greater Noida and Kochi in India. It also has offices in Shanghai and Cebu in Asia and Curittiba

in Brazil and Wroclaw in Poland. It has 44 clients in segments such as banking & capital markets,

insurance, travel & hospitality, hi-tech manufacturing, telecom and healthcare.

F. Wipro Group Companies

(i) Wipro Consumer Care & Lighting

Wipro Consumer Care and Lighting (WCCLG), a business unit of Wipro Limited, started with vegetable oil

production in 1947 and has since come a long way and established a profitable presence in the branded



retail market. With a vast plethora of products spanning soaps, baby care products, health and wellness,

Wipro's products have touched the lives of millions of consumers across India and global markets. It is

also a leader in institutional lighting in specified segments like software, pharma and retail. Wipro

Consumer Care and Lighting has been one of the fastest growing FMCG companies, both organically and

through acquisitions.

(ii) Wipro EcoEnergy

Wipro EcoEnergy, the renewable energy services arm of Wipro, is a one-stop shop for all the renewable

and alternative needs of your organization. Our scope of work provides the entire range of sustainable

and energy efficient solutions such as,

� Customized clean-energy solutions for institutional clients

� Energy Efficiency (reduce) and Renewable Energy (replace)

� Consulting, implementation and managed services

We work on the industrial scale; our technologies are proven, have direct customer relevance, and are

commercially viable. We are technology agnostic because we work on best technologies and

recommend the same based on your unique environment. Wipro EcoEnergy provides clean and

sustainable energy solutions for all kinds of spaces, from factories to institutions and from offices to

homes.

(iii) Wipro Infrastructure Engineering

Wipro Infrastructure Engineering, a division of Wipro Limited, delivers precision-engineered, world-class

hydraulic cylinders, components and solutions, and truck hydraulic components to OEMs globally in the

infrastructure and related industries. It represents the Kayaba, Kawasaki, Sun Hydraulics and Teijin Seiki

range of hydraulic products in India. With state-of-the-art manufacturing facilities and extensive product

development and testing facilities, Wipro Infrastructure Engineering has emerged as a leader in the

hydraulic cylinders and truck tipping systems market in India. Wipro has recently entered water

treatment business and provides ultra pure water treatment systems and solutions for various

industries.

(iv) Wipro GE Medical Systems Limited

Wipro GE Medical Systems Limited is focused on delivering advanced solutions for significant challenges

faced by healthcare organizations today. Wipro GE Healthcare, a joint venture between Wipro and GE, is

part of GE Healthcare South Asia and caters to customer and patient needs with a commitment to

uncompromising quality. We successfully manage a continuum of clinical information across the entire

enterprise and our highly energized team provides superior customer and patient satisfaction,

maximizing customer productivity with Six Sigma quality and uncompromising integrity.



G. Awards & Recognitions

In 2011, Wipro won:

� BPO Excellence Award for Operational Excellence & Quality

� BPO Excellence Award for Use of Technology for Operational Excellence

� BPO Excellence Award for Fun at Work

� BPO Excellence Award for outstanding work in Utilities Company in UK

� Awarded with DL Shah National Quality Award

Wipro's IDAM-in-a-Rack has won the Global Product Excellence Award 2010 in the Identity Management

Solution Category.



IV. Key Indicators for Stock Selection

An equity investment analysis assumes for the purpose of valuation that a share’s current intrinsic value

must be calculated not on its potential capital gain but on total future return for which investor holds

the share.

As the approach is based on relevant factors like economics, climate and trends in financial market, it

generally gives more realistic estimate of the value of a stock. This analysis is helpful in establishing basic

standards, but cannot be totally relied because uncertainties associated with the economic and market

factor.

According to Benjamin Graham1, a set of standards should be applied to each purchase, to make sure

that one obtains (1) a minimum of quality in the past performance and current financial position of the

company, and also (2) a minimum of quantity in terms of earnings and assets per dollar of price.

In this key indicator analysis, we will study a set of variables that influence the future of a firm both

qualitatively and quantitatively. Here we assess the competitive position of a firm, its earning and

profitability, the efficiency with which it operates its financial position and its full with respect to the

earning of its shareholders. The fundamental nature of this analysis is that each share of a company has

an intrinsic value, which is dependent on the company's financial performance, quality of management

and record of its earnings and dividend. It is believed that the market price of share in a period of time

will move towards its intrinsic value. If the market price of a share is lower than the intrinsic value, then

the share is supposed to be undervalued and it should be purchased but if the current market price

shows that it is more than intrinsic value then the share should be sold.

This shall be analyzed through the financial statements of the IT companies. The basic financial

statements, which are required as tools of this analysis, are the income statement, the balance sheet,

and the statement of changes in financial position. These statements are useful for investors, creditors

as well as internal management of a firm and on the basis these statements the future course of action

may be taken by the investors of the firm.

Now we will analyse the following parameters to reveal the intrinsic value of stock:

A. Growth in Profit and Sales

B. Earnings per Share

C. Price Earning (P/E) Ratio

D. DPS (Dividend per Share)

E. Return on Net worth (Equity + Reserves)

F. Dividend/ Net Profit

G. Return on Long Term Funds (%)

H. Price Analysis

1 The Intelligent Investor: The Definitive Book on Value Investing by Benjamin Graham, 2003



A. Growth in Profit and Sales

1) TCS

(Rs. in Crores.)

Year 2006 2007 2008 2009 2010

Net Sales 11230.50 14939.97 18533.72 22401.92 23044.45

% Rise in NS 33.02% 24.05% 20.87% 2.86 %

% rise in NS 06-10 105.19 %

Net Profit 2716.87 3757.29 4508.76 4696.21 5618.51

% Rise in NP 38.29% 20.00% 4.16% 19.64 %

% rise NP 06-10 106.80 %

2) WIPRO

(Rs. in Crores.)

Year 2006 2007 2008 2009 2010

Net Sales 10264.09 13758.5 17658.10 21612.80 23006.30

% Rise in NS 34.04% 28.34% 22.39% 6.44%

% rise in NS 06-10 124.14%

Net Profit 2020.48 2842.10 3063.30 2973.80 4898.00

% Rise in NP 40.66% 7.78% - 2.92% 64.70%

% rise NP 06-10 142.41%

3) Infosys

(Rs. in Crores.)

Year 2006 2007 2008 2009 2010

Net Sales 9028.00 13149.00 15648.00 20264.00 21140.00

% Rise in NS 45.64% 19% 29.49% 4.32%

% rise in NS 06-10 134%

Net Profit 2421.00 3783.00 4470.00 5819.00 5803.00

% Rise in NP 56.25% 18.16% 30.17% -0.27%

% rise NP 06-10 139.69%



Comments:

Constant growth in sales and profit reflects efficient management policy, competitive marketing

strategy, fair pricing model of products, and adoption of modern production technology and good

working environment of organization. From above data we can see in WIPRO there is 124.14% rise in

sale and 142.41% rise in net profit from the year 2006 to 2010.



B. Earnings per Share

An Earnings Per Share ratio (EPS Ratio) is a small variation of return on equity capital ratio and is

calculated by dividing the net profit after taxes and preference dividend by the total number of equity

shares.

The earnings per share is a good measure of profitability and when compared with EPS of similar

companies, it gives a view of the comparative earnings or earnings power of the firm. EPS ratio

calculated for a number of years indicates whether or not the earning power of the company has

increased. The Share holder invests their money with expectation of getting dividends and capital

appreciation on shares.

The formula is EPS = Net Profit/No. of Shares

1) TCS

Year 2006 2007 2008 2009 2010

Net Profit (Rs. in Crores.) 2716.87 3757.29 4508.76 4696.21 5618.51

Shares (lakhs) 4893.05 9786.10 9786.10 9786.10 19572.21

EPS (Rs) 55.53 38.39 46.07 47.92 28.62

Average EPS 06-10 (Rs) 43.30

2) WIPRO

Year 2006 2007 2008 2009 2010


Shares (lakhs) 14257.54 14590 14615 14649.81 14682.11

EPS (Rs) 14.17 19.48 20.96 20.3 33.36


3) Infosys

Year 2006 2007 2008 2009 2010


Shares (lakhs) 2755.55 5712.10 5719.96 5728.30 5728.35

EPS (Rs) 87.86 66.23 78.15 101.58 101.13




Comments:

This is one of the most important parameter which measures net profit earned per share. EPS is one of

the major factors for the dividend policy of the firm and market price of the company. A steady growth

in EPS year after year indicates good track of profitability. In the above data Infosys has maintained

constant growth in EPS



C. Price Earning (P/E) Ratio

Price earnings ratio (P/E ratio) is the ratio between market price per equity share and earning per share.

The ratio is calculated to make an estimate of appreciation in the value of a share of a company and is

widely used by investors to decide whether or not to buy shares in a particular company. This ratio helps

the investor in deciding whether to buy or not to buy the shares of a particular company at a particular

market price. This ratio also highlights the relationship between the market price of share and current

and current earnings per share. Companies with ample opportunity for growth generally have high P/E

Ratio.

Generally, higher the price earning ratio the better it is. The IT Industry’s average P/E Ratio is between

25 to 30..

The formula is P/E Ratio = Current Market Price/EPS

1) TCS

Year 2006 2007 2008 2009 2010

Avg MP 1500 1167 736 555.60 937.80

EPS 55.53 38.39 46.07 47.92 28.62

P/E Ratio 27 30.39 15.97 11.60 32.76

2) WIPRO

Year 2006 2007 2008 2009 2010

Avg MP 498.5 557.50 359.80 447 540.43

EPS 14.17 19.48 20.96 20.3 33.36

P/E Ratio 35.18 28.62 17.17 22.01 16.20

3) Infosys

Year 2006 2007 2008 2009 2010

Avg MP 2510.5 1974.32 1543.25 1862.87 2904.50

EPS 87.86 66.23 78.15 101.58 101.13

P/E Ratio 28.57 29.81 19.74 18.33 28.72



Comments:

This ratio measures the number of times the earnings of the latest year at which the share price of a

company is quoted. It signifies the number of years in which the earnings can equal the current market

price. P/E ratio is a barometer of the market sentiment. Companies with excellent track record of

profitability, professional management and libral distribution policy have high P/E multiple whereas

companies with moderate track record, conservative distribution policy and average prospectus quote

at low P/E multiple. From above analysis TCS has maintained high P/E multiple for three years 2006,

2007 and 2010 which is near to industry average between 25 to 30.

.



D. DPS (Dividend per Share)

The dividend policy of firm determines what proportion of earnings is paid to share holders by way of

dividends and what proportion is ploughed back in the firm for reinvestment purpose.

DPS = Dividend Amount/No. of Shares

A) TCS

Year 2006 2007 2008 2009 2010

Dividend (Crs.) 660.56 1125.39 1370.05 1370.05 3914.43

Shares (lakhs) 4893.05 9786.10 9786.10 9786.10 19572.21

DPS (In Rs.) 13.50 11.50 14.00 14.00 20.00

Dividend% 1350% 1150% 1400% 1400% 2000%

B) WIPRO

Year 2006 2007 2008 2009 2010

Dividend (Crs.) 712.88 873.7 876.50 586 880.9

Shares (lakhs) 14257.54 14590 14615 14649.81 14682.11

DPS (In Rs.) 5.00 6.00 6.00 4.00 6.00

Dividend% 250% 300% 300% 200% 300%

C) Infosys

Year 2006 2007 2008 2009 2010

Dividend (Crs.) 1238.00 649.00 1902.00 1345.00 1434.00

Shares (lakhs) 2755.55 5712.10 5719.96 5728.30 5728.35

DPS (In Rs.) 45.00 11.50 33.25 23.50 25.00

Dividend% 900% 230% 665% 470% 500%



Comments:

Firm’s dividend policy depends on investor preference for current dividends, interdependency between

dividend and investment decision, irrational behavior of investor and firms, different taxation of

dividends and capital gains and under pricing of equity issues. From above data Infosys and TCS has

maintained high dividend pay-out to the share holder.

.



E. Return on Net worth (Equity + Reserves)

This ratio expresses the net profit in terms of the equity share holder’s funds. This ratio is an important

yardstick of performance for equity shareholder since it indicates the return on the funds employed by

them.

ROE = Net Profit / Networth

A) TCS

Year 2006 2007 2008 2009 2010

Net Profit 2716.87 3757.29 4508.76 4696.21 5618.51

Net worth 5609.33 8058.99 11004.81 13446.25 15116.62

RoE 48.43% 46.62% 41.34% 35.13% 37.3%

B) WIPRO

Year 2006 2007 2008 2009 2010

Net Profit 2020.48 2842.10 3063.30 2973.80 4898.00

Net worth 6427.94 9320.40 11610.70 12515.00 17692.20

RoE 31.43% 30.5% 26.51% 31.34% 25.19%

C) Infosys

Year 2006 2007 2008 2009 2010

Net Profit 2421.00 3783.00 4470.00 5819.00 5803.00

Net worth 6897.00 11162.00 13490.00 17809.00 22306.00

RoE 36.21% 33.47% 33.09% 34.76% 25.89%



Comments:

The factor which motivates share holder to invest in a company is the expectation of adequate rate of

return on their invested funds and periodically they will want to assess the rate of return in order to

decide whether to continue with their investment. If we compare data of last five years of above

companies TCS has generated higher return on networth.



F. Dividend/ Net Profit

Above ratio helps investor to decide that how much company is willing to pay as dividend out of net

profit.

A) TCS

Year 2006 2007 2008 2009 2010

Net Profit 2716.87 3757.29 4508.76 4696.21 5618.51

Dividend (Crs.) 660.56 1125.39 1370.05 1370.05 3914.43

24.31% 29.95% 30.38% 29.21% 69.67%

B) WIPRO

Year 2006 2007 2008 2009 2010

Net Profit 2020.48 2842.10 3063.30 2973.80 4898.00

Dividend (Crs.) 712.88 873.7 876.50 586 880.9

35.28% 30.74% 28.61% 19.70% 17.98%

C) Infosys

Year 2006 2007 2008 2009 2010

Net Profit 2421.00 3783.00 4470.00 5819.00 5803.00

Dividend (Crs.) 1238.00 649.00 1902.00 1345.00 1434.00

51.13% 17.15% 42.55% 23.11% 24.71%



Comments:

It indicates the extent of the net profits distributed to the shareholders as dividend. A high ratio signifies

a liberal distribution policy and a low ratio reflects conservative distribution policy. From above data TCS

is more consistent in distributing dividend out of net profit.

.



G. Return on Long Term Funds (%)

Year 2006 2007 2008 2009 2010

TCS 55.97% 50.12% 42.96% 43.27% 42.46%

WIPRO 35.87% 33.31% 23.32% 37.17% 30.12%

Infosys 40.62% 36.64% 37.77% 39.8% 33.69%

Comments:

TCS has given more return on long term funds.



H. Price Analysis

A) TCS

Year 2006 2007 2008 2009 2010

HIGH 2099 1399 1054 755.95 1179

LOW 900 935 418 355.25 696.60

Max Return from low to High 133% 49.62% 155% 113% 69%

B) WIPRO

Year 2006 2007 2008 2009 2010

HIGH 614 590 537.90 699 753

LOW 383 425 181.70 195 327.85

Max Return from low to High 60% 62% 196% 258% 130%

C) Infosys

Year 2006 2007 2008 2009 2010

HIGH 3449 2415 2046.50 2614 3454

LOW 1572 1533.65 1040 1111.75 2355

Max Return from low to High 119% 58% 97% 135% 47%



Comments:

Any wise investor knows the basic principle of investment: buy low, sell high. However, investors often

ignore this rule, as they get swept up in prevailing market sentiment. If investor follows market closely

he will definitely get opportunity to buy at low and sell at high. WIPRO and TCS have generated

Maximum Return from Low to High.



V. Conclusion & Recommendations

Sl. No Indicator TCS Wipro Infosys

1 Growth in Profit and Sales

2 Earnings per Share

3 P/E Ratio

4 Dividend per Share

5 Return on Net worth

6 Willingness of Company to pay Dividend out of Net Profit

7 Return on Long Term Funds

8 Maximum Return given to Shareholders from 2006-10

Total Score (Points) 6 2 2

- “Performed Well” compared to other two Companies (01 Point)

- “Performed Average” compared to other two Companies (0.5 Point)

- “Not Performed Well” compared to other two Companies (0 Point)



- For Investor

The basic objective of investor of making investment in stock is to obtain higher returns by selling the

stocks at the higher price subsequently. The positive change in price of stocks and income in the form of

dividends and interest is expected by the investor to invest his funds in the stock market. TCS and

INFOSYS had given high dividends from year 2006 to 2010. TCS and WIPRO had given maximum return

from year 2006 to 2010.

- For Shareholder

The shareholder invests in the company for long term investment. They are always interested in profit

and sales growth of the company, growth in earning per share, positive return on his investment. From

analysis TCS and WIPRO had performed well from shareholder perspective.



VI. References

� "BSE 2010 Data". http://www.bseindia.com.

� "NASSCOM List". Press Release. NASSCOM. 2006-01-23.

� "Top 20 IT services exports firms in India: Rediff.com Business". Business.rediff.com.

� "IT Man of the Year: Standing Tall". Cover Story. Dataquest India.

� "Star Performer Goes Public". Editorial. The Hindu.

� Official Website of Tata Consultancy Services Limited.

� Rakesh R.S. Garia (2010-04-13). "Results for the Fourth Quarter and Year ended 31 March

2010". infosys.com. Infosys.

� "Top 20 IT-BPO employers in India : Rediff.com Business". Business.rediff.com.

� Infosys Technologies Limited (2010-06-30). "What We Do | About Us". Infosys.

� Infosys Technologies Limited. "Fact File | Who We Are | About Us". Infosys.

� Narayana Murthy. "Learn entrepreneurship the Infosys way! - CNBC-TV18/TiE-Leaders and

Learners". Moneycontrol.com.

� Official Website of Infosys Limited.

� Official Website of Wipro Technologies

� Wikipedia Website. http://en.wikipedia.org/wiki/

� Quarter Results, Dec2010. "WIPRO_Qtr_result_dec_2010". www.wipro.com.

� "WIPRO quarter results-Sep 2009".

� "India's top 10 brands". business.rediff.com.

� http://www.naukrihub.com/india/bpo/overview



VII. Appendices



Appendix 1

Balance Sheet: Tata Consultancy Services

Balance Sheet ------------------- in Rs. Cr. -------------------

Mar '01 Mar '02 Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 36.44 36.44 36.44 36.44 48.01 48.93 97.86 197.86 197.86 295.72

Equity Share Capital 36.44 36.44 36.44 36.44 48.01 48.93 97.86 97.86 97.86 195.72

Share Application Money 0 0 0 0 0 0 0 0 0 0

Preference Share Capital 0 0 0 0 0 0 0 100 100 100

Reserves 883.76 1,154.46 1,244.76 10.64 3,273.04 5,560.40 7,961.13 10,806.95 13,248.39 14,820.90

Revaluation Reserves 0 0 0 0 0 0 0 0 0 0

Net worth 920.2 1,190.90 1,281.20 47.08 3,321.05 5,609.33 8,058.99 11,004.81 13,446.25 15,116.62

Secured Loans 22 323.7 568.6 0 111.01 26.52 41.76 9.27 32.63 29.25

Unsecured Loans 29.7 47 114.7 375 9.73 8.98 8.98 8.98 7.74 6.49

Total Debt 51.7 370.7 683.3 375 120.74 35.5 50.74 18.25 40.37 35.74

Total Liabilities 971.9 1,561.60 1,964.50 422.08 3,441.79 5,644.83 8,109.73 11,023.06 13,486.62 15,152.36

Application Of Funds

Gross Block 661.9 791.1 831.5 226.5 1,041.09 1,695.13 2,315.36 3,240.64 4,359.24 4,871.21

Less: Accum. Depreciation 401.9 462.5 497.8 0.95 132.93 525.35 854.75 1,300.11 1,690.16 2,110.69

Net Block 260 328.6 333.7 225.55 908.16 1,169.78 1,460.61 1,940.53 2,669.08 2,760.52

Capital Work in Progress 40.6 10.5 30.6 0 120.28 280 757.85 889.74 685.13 940.72

Investments 17.3 356.2 414 417.39 1,404.42 1,963.52 3,252.04 4,509.33 5,936.03 7,893.39

Inventories 2.6 -114.4 -4.9 0 0 22.94 12.06 17.19 16.95 6.78

Sundry Debtors 0 0 0 0.25 1,463.45 2,326.63 2,799.80 3,747.01 3,717.73 3,332.30

Cash and Bank Balance 0 0 0 2.25 120.66 170.61 314.66 402.24 479.93 212.31

Total Current Assets 2.6 -114.4 -4.9 2.5 1,584.11 2,520.18 3,126.52 4,166.44 4,214.61 3,551.39

Loans and Advances 1,172.80 1,439.50 1,745.00 9.77 735.75 1,490.57 1,925.74 3,104.74 3,910.85 4,101.84

Current Liabilities 521.4 458.8 553.9 228.2 783.43 1,239.24 1,750.46 2,525.56 3,604.18 3,352.74

Provisions 0 0 0 4.93 527.58 540.54 905.05 1,187.44 1,450.23 3,926.61

Total CL & Provisions 521.4 458.8 553.9 233.13 1,311.01 1,779.78 2,655.51 3,713.00 5,054.41 7,279.35

Net Current Assets 654 866.3 1,186.20 -220.86 1,008.93 2,231.53 2,639.23 3,683.46 4,196.38 3,557.73

Miscellaneous Expenses 0 0 0 0 0 0 0 0 0 0

Total Assets 971.9 1,561.60 1,964.50 422.08 3,441.79 5,644.83 8,109.73 11,023.06 13,486.62 15,152.36



Appendix 2

Profit & Loss Account Statement: Tata Consultancy Services

Profit & Loss account ------------------- in Rs. Cr. ------------------

Mar '01 Mar '02 Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 3,061.70 4,113.50 4,914.70 0 8,051.10 11,236.01 14,942.09 18,536.55 22,404.00 23,044.84

Excise Duty 0 0 0 0 0 5.51 2.12 2.83 2.08 0.39

Net Sales 3,061.70 4,113.50 4,914.70 0 8,051.10 11,230.50 14,939.97 18,533.72 22,401.92 23,044.45

Other Income 78.1 52 92.9 17.74 -152.65 -1.19 216.04 440.45 -456.24 182.1

Stock Adjustments 0 0 0 0 0 4.14 -2.79 -0.04 1.73 -1.38

Total Income 3,139.80 4,165.50 5,007.60 17.74 7,898.45 11,233.45 15,153.22 18,974.13 21,947.41 23,225.17

Expenditure

Raw Materials 0 0 0 0 0 161.5 22.02 45.81 53.67 23.75

Power & Fuel Cost 0 0 0 0 44.59 66.85 93.89 135.57 164.34 183.62

Employee Cost 650.8 759.8 1,012.70 0 3,967.52 5,113.96 6,186.85 6,015.19 7,370.09 7,882.43

Other Manufacturing Expenses 0 0 0 0 487.18 793.01 3,095.82 5,687.82 6,947.60 6,446.99

Selling and Admin Expenses 0 0 0 0.01 513.88 756.39 765.08 991.43 1,218.41 1,268.03

Miscellaneous Expenses 1,500.00 1,876.50 2,533.80 0.02 629.48 1,005.52 472.04 632.25 628.71 571.08

Preoperative Exp Capitalised 0 0 0 0 0 0 0 0 0 0

Total Expenses 2,150.80 2,636.30 3,546.50 0.03 5,642.65 7,897.23 10,635.70 13,508.07 16,382.82 16,375.90

Operating Profit 910.9 1,477.20 1,368.20 -0.03 2,408.45 3,337.41 4,301.48 5,025.61 6,020.83 6,667.17

PBDIT 989 1,529.20 1,461.10 17.71 2,255.80 3,336.22 4,517.52 5,466.06 5,564.59 6,849.27

Interest 7.8 4.5 15.2 0.2 10.4 4.49 3.43 3.42 7.44 9.54

PBDT 981.2 1,524.70 1,445.90 17.51 2,245.40 3,331.73 4,514.09 5,462.64 5,557.15 6,839.73

Depreciation 67.9 78.3 92.9 0.84 133.22 257.38 343.41 458.78 417.46 469.35

Other Written Off 0 0 0 0 0 0 0 0 0 0

Profit Before Tax 913.3 1,446.40 1,353.00 16.67 2,112.18 3,074.35 4,170.68 5,003.86 5,139.69 6,370.38

Extra-ordinary items -91.8 57.1 -43.9 0 0 -38.03 -2.59 -37.52 -103.11 -13.98

PBT (Post Extra-ord Items) 821.5 1,503.50 1,309.10 16.67 2,112.18 3,036.32 4,168.09 4,966.34 5,036.58 6,356.40

Tax 142.6 244.3 220.5 1.49 280.76 319.45 410.8 457.58 340.37 737.89

Reported Net Profit 862.5 1,145.00 1,176.40 15.18 1,831.42 2,716.87 3,757.29 4,508.76 4,696.21 5,618.51

Total Value Addition 2,150.80 2,636.30 3,546.50 0.03 5,642.65 7,735.73 10,613.68 13,462.26 16,329.15 16,352.15

Preference Dividend 0 0 0 0 0 0 0 0.08 7 17

Equity Dividend 0 0 0 4.38 552.13 660.56 1,125.39 1,370.05 1,370.05 3,914.43

Corporate Dividend Tax 0 0 0 0.56 74.46 92.64 169.48 232.85 234.02 657.51

Per share data (annualised)

Shares in issue (lakhs) 0 0 0 364.4 4,801.15 4,893.05 9,786.10 9,786.10 9,786.10 19,572.21

Earnings Per Share (Rs) 0 0 0 4.17 38.15 55.53 38.39 46.07 47.92 28.62

Equity Dividend (%) 0 0 0 12 1,150.00 1,350.00 1,150.00 1,400.00 1,400.00 2,000.00

Book Value (Rs) 0 0 0 12.92 69.17 114.64 82.35 111.43 136.38 76.72



Appendix 3

Cash Flow Statement: Tata Consultancy Services

Cash Flow Statement ------------------- in Rs. Cr. -------------------

Mar '02 Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax 1546035.9 1768627.2 3.22 2308.65 3074.35 4170.68 5003.86 5139.68 6370.38

Net Cash From Operating Activities 13231.1 -580658.7 0.64 1978.99 2344.42 3551.26 3827.91 4874.12 6264.74

Net Cash (used in)/from Investing Activities 1183501.9 3719801.7 -374.5 -2813.85 -1464.97 -2076.42 -2404.9 -3162.22 -4556.64

Net Cash (used in)/from Financing Activities -1104314.3 -2186400.2 374.98 953.35 -882.3 -1075.35 -1424.77 -1588.25 -1969.65

Net (decrease)/increase In Cash and Cash Equivalents 92418.7 952742.8 1.12 118.49 -5.1 385.97 -29.62 123.65 -261.55

Opening Cash & Cash Equivalents 88607.9 181026.6 1.13 2.25 176.27 171.17 557.14 417 554.83

Closing Cash & Cash Equivalents 181026.6 1133769.4 2.25 120.74 171.17 557.14 527.52 540.65 293.28



Appendix 4

Balance Sheet: Infosys


Mar '00 Mar '01 Mar '02 Mar '03 Mar '04 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12

mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 33.08 33.08 33.09 33.12 33.32 135.29 138 286 286 286 287

Equity Share Capital 33.08 33.08 33.09 33.12 33.32 135.29 138 286 286 286 287

Share Application Money 0 0 0 0 0 0 0 0 0 0 0

Preference Share Capital 0 0 0 0 0 0 0 0 0 0 0

Reserves 800.23 1,356.56 2,047.22 2,827.53 3,220.11 5,106.44 6,759.00 10,876.00 13,204.00 17,523.00 21,749.00

Revaluation Reserves 0 0 0 0 0 0 0 0 0 0 0

Networth 833.31 1,389.64 2,080.31 2,860.65 3,253.43 5,241.73 6,897.00 11,162.00 13,490.00 17,809.00 22,036.00

Secured Loans 0 0 0 0 0 0 0 0 0 0 0

Unsecured Loans 0 0 0 0 0 0 0 0 0 0 0

Total Debt 0 0 0 0 0 0 0 0 0 0 0

Total Liabilities 833.31 1,389.64 2,080.31 2,860.65 3,253.43 5,241.73 6,897.00 11,162.00 13,490.00 17,809.00 22,036.00


Gross Block 284.03 631.14 960.6 1,273.31 1,570.23 2,182.72 2,837.00 3,889.00 4,508.00 5,986.00 6,357.00

Less: Accum. Depreciation 133.65 244.13 393.03 577.15 803.41 1,005.82 1,275.00 1,739.00 1,837.00 2,187.00 2,578.00

Net Block 150.38 387.01 567.57 696.16 766.82 1,176.90 1,562.00 2,150.00 2,671.00 3,799.00 3,779.00

Capital Work in Progress 56.96 170.65 150.67 76.56 203.48 317.52 571 957 1,260.00 615 409

Investments 13.83 34.12 44.44 33.2 1,027.38 1,328.70 876 839 964 1,005.00 4,636.00

Inventories 0 0 0 0 0 0 0 0 0 0 0

Sundry Debtors 136.18 302.37 336.73 512.14 632.51 1,252.82 1,518.00 2,292.00 3,093.00 3,390.00 3,244.00

Cash and Bank Balance 73.7 66.81 73.19 206.7 338.69 268.15 544 680 657 805 929

Total Current Assets 209.88 369.18 409.92 718.84 971.2 1,520.97 2,062.00 2,972.00 3,750.00 4,195.00 4,173.00

Loans and Advances 210.13 430.28 668.09 909.59 868.75 1,030.29 1,308.00 1,241.00 2,804.00 3,303.00 4,201.00

Fixed Deposits 358.09 318.25 699.03 1,129.53 1,299.32 1,213.39 2,735.00 4,827.00 5,772.00 8,234.00 8,868.00

Total CA, Loans & Advances 778.1 1,117.71 1,777.04 2,757.96 3,139.27 3,764.65 6,105.00 9,040.00 12,326.00 15,732.00 17,242.00

Deffered Credit 0 0 0 0 0 0 0 0 0 0 0

Current Liabilities 67.15 134.92 126.11 315.25 560.44 578.56 808 1,162.00 1,483.00 1,544.00 1,995.00

Provisions 98.82 184.93 333.3 387.98 1,323.08 767.48 1,409.00 662 2,248.00 1,798.00 2,035.00

Total CL & Provisions 165.97 319.85 459.41 703.23 1,883.52 1,346.04 2,217.00 1,824.00 3,731.00 3,342.00 4,030.00

Net Current Assets 612.13 797.86 1,317.63 2,054.73 1,255.75 2,418.61 3,888.00 7,216.00 8,595.00 12,390.00 13,212.00

Miscellaneous Expenses 0 0 0 0 0 0 0 0 0 0 0

Total Assets 833.3 1,389.64 2,080.31 2,860.65 3,253.43 5,241.73 6,897.00 11,162.00 13,490.00 17,809.00 22,036.00

Contingent Liabilities 80.64 158.34 67.3 101.66 197.02 289.87 523 670 603 347 295

Book Value (Rs) 125.97 210.05 314.31 431.84 488.2 193.73 250.29 195.41 235.84 310.9 384.02



Appendix 5

Profit & Loss Account Statement: Infosys

Profit & Loss account ------------------- in Rs. Cr. -------------------


12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 884.35 1,900.57 2,603.59 3,622.69 4,760.89 6,859.66 9,028.00 13,149.00 15,648.00 20,264.00 21,140.00

Excise Duty 0 0 0 0 0 0 0 0 0 0 0

Net Sales 884.35 1,900.57 2,603.59 3,622.69 4,760.89 6,859.66 9,028.00 13,149.00 15,648.00 20,264.00 21,140.00

Other Income 30.29 49.58 66.41 75.84 117.72 172.79 144 379 683 502 967

Stock Adjustments 0 0 0 0 0 0 0 0 0 0 0

Total Income 914.64 1,950.15 2,670.00 3,698.53 4,878.61 7,032.45 9,172.00 13,528.00 16,331.00 20,766.00 22,107.00

Expenditure

Raw Materials 2.7 5.87 3.24 6.46 9.13 13.55 16 22 18 20 22

Power & Fuel Cost 5.01 11.78 18.96 22.6 28.72 40.2 62 88 106 125 122

Employee Cost 335.04 718.37 1,117.87 1,677.12 2,367.35 3,183.25 4,274.00 6,316.00 7,771.00 9,975.00 10,356.00

Other Manufacturing Expenses 23.5 89.57 103.67 175.67 240.17 563.47 792 1,290.00 1,443.00 1,697.00 1,993.00

Selling and Admin Expenses 136.25 263.4 278.48 418.38 499.86 697.15 773.49 1,050.53 1,214.00 1,367.00 992

Miscellaneous Expenses 32.83 46.13 43.03 49.67 31.26 35.84 120.51 156.47 132 172 293

Preoperative Exp Capitalised 0 0 0 0 0 0 0 0 0 0 0

Total Expenses 535.33 1,135.12 1,565.25 2,349.90 3,176.49 4,533.46 6,038.00 8,923.00 10,684.00 13,356.00 13,778.00

Operating Profit 349.02 765.45 1,038.34 1,272.79 1,584.40 2,326.20 2,990.00 4,226.00 4,964.00 6,908.00 7,362.00

PBDIT 379.31 815.03 1,104.75 1,348.63 1,702.12 2,498.99 3,134.00 4,605.00 5,647.00 7,410.00 8,329.00

Interest 0.42 0.59 0.71 0.75 0.75 1.09 1 1 1 2 2

PBDT 378.89 814.44 1,104.04 1,347.88 1,701.37 2,497.90 3,133.00 4,604.00 5,646.00 7,408.00 8,327.00

Depreciation 53.23 112.89 160.65 188.95 230.9 268.22 409 469 546 694 807

Other Written Off 0 0 0 0 0 0 0 0 0 0 0

Profit Before Tax 325.66 701.55 943.39 1,158.93 1,470.47 2,229.68 2,724.00 4,135.00 5,100.00 6,714.00 7,520.00

Extra-ordinary items 7.33 -1.4 0 -1.5 0.49 -4.59 0 -5 0 -1 0

PBT (Post Extra-ord Items) 332.99 700.15 943.39 1,157.43 1,470.96 2,225.09 2,724.00 4,130.00 5,100.00 6,713.00 7,520.00

Tax 39.46 71.31 135.43 199.5 227.49 325.3 303 352 630 895 1,717.00

Reported Net Profit 285.95 628.81 807.96 957.93 1,243.47 1,904.38 2,421.00 3,783.00 4,470.00 5,819.00 5,803.00

Total Value Addition 532.63 1,129.26 1,562.01 2,343.44 3,167.36 4,519.91 6,022.00 8,901.00 10,666.00 13,336.00 13,756.00

Preference Dividend 0 0 0 0 0 0 0 0 0 0 0

Equity Dividend 29.76 66.16 132.36 178.81 862.46 309.8 1,238.00 649 1,902.00 1,345.00 1,434.00

Corporate Dividend Tax 3.27 8.7 5.06 12.3 110.5 42.17 174 102 323 228 240


Shares in issue (lakhs) 661.51 661.58 661.86 662.43 666.41 2,705.71 2,755.55 5,712.10 5,719.96 5,728.30 5,738.25

Earning Per Share (Rs) 43.23 95.05 122.07 144.61 186.59 70.38 87.86 66.23 78.15 101.58 101.13

Equity Dividend (%) 90 200 400 540 2,590.00 230 900 230 665 470 500

Book Value (Rs) 125.97 210.05 314.31 431.84 488.2 193.73 250.29 195.41 235.84 310.9 384.02



Appendix 6

Cash Flow Statement: Infosys




Net Profit Before Tax 325.65 696.03 943.39 1158.93 1470.47 2184.49 2724 4129 5100 6714 7472

Net Cash From Operating Activities 259.41 540.32 820.96 915.96 1633.97 1359.7 2237 3256 3816 5152 5876

Net Cash (used in)/from Investing Activities -146.16 -452.22 -280.23 -153.41 -1332.01 -939.88 -392 -1065 -978 -195 -3314

Net Cash (used in)/from Financing Activities -21.54 -39.82 -104.77 -151.97 -94.48 -580.1 244 -316 -777 -2430 -1486

Net (decrease)/increase In Cash and Cash

Equivalents 91.71 69.37 449.22 611.55 200.89 -156.32 2096 1871 2079 2600 1008

Opening Cash & Cash Equivalents 416.66 508.37 577.74 1026.96 1638.51 1839.4 1683 3779 5610 7689 10289

Closing Cash & Cash Equivalents 508.37 577.74 1026.96 1638.51 1839.4 1683.08 3779 5650 7689 10289 11297



Appendix 7

Balance Sheet: Wipro Ltd




Sources Of Funds

Total Share Capital 70.83 46.49 46.49 46.51 46.55 140.71 285.15 291.8 292.3 293 293.6

Equity Share Capital 45.83 46.49 46.49 46.51 46.55 140.71 285.15 291.8 292.3 293 293.6

Share Application Money 0 0.23 0.24 0.12 0 1.21 7.49 3.5 58 1.5 1.8

Preference Share Capital 25 0 0 0 0 0 0 0 0 0 0

Reserves 594.75 1,829.46 2,486.05 3,283.70 3,461.04 4,751.73 6,135.30 9,025.10 11,260.40 12,220.50 17,396.80

Revaluation Reserves 104.71 89.01 0 0 0 0 0 0 0 0 0

Networth 770.29 1,965.19 2,532.78 3,330.33 3,507.59 4,893.65 6,427.94 9,320.40 11,610.70 12,515.00 17,692.20

Secured Loans 49.23 40.06 25.49 52.56 94.75 21.59 45.06 23.2 4 0 0

Unsecured Loans 8.67 4.74 1.37 17.19 5.94 40.5 5.1 214.8 3,818.40 5,013.90 5,530.20

Total Debt 57.9 44.8 26.86 69.75 100.69 62.09 50.16 238 3,822.40 5,013.90 5,530.20

Total Liabilities 828.19 2,009.99 2,559.64 3,400.08 3,608.28 4,955.74 6,478.10 9,558.40 15,433.10 17,528.90 23,222.40


Gross Block 675.79 902.02 961.55 1,161.71 1,333.68 1,763.49 2,364.53 1,645.90 2,282.20 5,743.30 6,761.30

Less: Accum. Depreciation 292.87 379.37 450.39 597.39 678.66 855.53 1,246.27 0 0 2,563.70 3,105.00

Net Block 382.92 522.65 511.16 564.32 655.02 907.96 1,118.26 1,645.90 2,282.20 3,179.60 3,656.30

Capital Work in Progress 70.88 79.8 116.26 94.83 139.71 250.24 612.36 989.5 1,335.00 1,311.80 991.1

Investments 193.59 163.64 478.46 1,440.72 2,456.03 2,859.51 3,459.20 4,348.70 4,500.10 6,895.30 8,966.50

Inventories 134.02 115.25 74.84 77.37 102.08 127.37 148.65 240.4 448.1 459.6 606.9

Sundry Debtors 446.94 617.67 643.49 792.59 1,062.34 1,406.51 1,968.07 2,582.30 3,646.60 4,446.40 4,754.70

Cash and Bank Balance 74.5 437.93 283.51 267.94 290.09 536.89 822.42 1,849.20 3,732.10 1,902.10 1,938.30

Total Current Assets 655.46 1,170.85 1,001.84 1,137.90 1,454.51 2,070.77 2,939.14 4,671.90 7,826.80 6,808.10 7,299.90

Loans and Advances 122.66 599.27 1,041.64 687.98 583.9 602.08 1,136.96 1,666.50 4,231.30 4,202.00 5,519.40

Fixed Deposits 0.23 8.41 10.03 141.77 0.01 0.01 0.58 0 0 2,507.10 3,726.00

Total CA, Loans & Advances 778.35 1,778.53 2,053.51 1,967.65 2,038.42 2,672.86 4,076.68 6,338.40 12,058.10 13,517.20 16,545.30

Deffered Credit 0 0 0 0 0 0 0 0 0 0 0

Current Liabilities 404.76 481.34 536.66 591.07 856.32 1,211.14 1,776.83 2,998.90 3,361.60 5,564.30 4,706.00

Provisions 192.79 53.3 63.1 76.36 824.57 523.7 1,011.56 765.2 1,380.70 1,810.70 2,230.80

Total CL & Provisions 597.55 534.64 599.76 667.43 1,680.89 1,734.84 2,788.39 3,764.10 4,742.30 7,375.00 6,936.80

Net Current Assets 180.8 1,243.89 1,453.75 1,300.22 357.53 938.02 1,288.29 2,574.30 7,315.80 6,142.20 9,608.50

Miscellaneous Expenses 0 0 0 0 0 0 0 0 0 0 0

Total Assets 828.19 2,009.98 2,559.63 3,400.09 3,608.29 4,955.73 6,478.11 9,558.40 15,433.10 17,528.90 23,222.40

Contingent Liabilities 36.74 62.13 44.09 133.46 387.99 676.65 509.18 661.6 749.9 1,045.40 778

Book Value (Rs) 27.95 80.71 108.94 143.2 150.7 69.54 45.03 63.86 79.05 85.42 120.49



Appendix 8

Profit & Loss Account Statement: Wipro Ltd

Profit & Loss account ------------------- in Rs. Cr. -------------------



Income

Sales Turnover 2,372.39 3,139.61 3,486.55 4,047.49 5,190.40 7,276.18 10,264.09 13,758.50 17,658.10 21,612.80 23,006.30

Excise Duty 86.49 82.63 61.16 55.48 55.51 43.02 36.97 74.6 165.5 105.5 84.3

Net Sales 2,285.90 3,056.98 3,425.39 3,992.01 5,134.89 7,233.16 10,227.12 13,683.90 17,492.60 21,507.30 22,922.00

Other Income -26.21 62.37 117.15 68.8 91.92 93.32 151.92 288.7 326.9 -480.4 875.3

Stock Adjustments -4.95 -8.34 -13.83 9.87 11.79 9.29 24.21 86.3 187 -3.8 111

Total Income 2,254.74 3,111.01 3,528.71 4,070.68 5,238.60 7,335.77 10,403.25 14,058.90 18,006.50 21,023.10 23,908.30

Expenditure

Raw Materials 887.75 843.2 799.07 756.08 858.07 1,194.77 1,391.88 1,975.30 3,139.30 3,438.80 4,140.40

Power & Fuel Cost 21.53 31.04 32.1 28.84 35.91 46.54 86.46 0 0 154 141.4

Employee Cost 256.74 421.9 508.37 642.47 864.44 2,878.53 4,279.03 5,768.20 7,409.10 9,249.80 9,062.80

Other Manufacturing Expenses 3.72 44.75 133.61 281.74 378.72 511.53 934.24 120.5 299.8 1,687.80 2,071.80

Selling and Admin Expenses 598.62 810.98 905.66 1,236.13 1,764.47 657.32 801.07 27.6 557.8 1,523.00 1,475.10

Miscellaneous Expenses 107.76 114.85 74.19 81.34 116.62 135.64 274.76 2,624.10 2,558.00 691.4 640

Preoperative Exp Capitalised -13.06 -11.79 -7.63 -15.6 -13.99 -37.12 0 0 0 0 0

Total Expenses 1,863.06 2,254.93 2,445.37 3,011.00 4,004.24 5,387.21 7,767.44 10,515.70 13,964.00 16,744.80 17,531.50

Operating Profit 417.89 793.71 966.19 990.88 1,142.44 1,855.24 2,483.89 3,254.50 3,715.60 4,758.70 5,501.50

PBDIT 391.68 856.08 1,083.34 1,059.68 1,234.36 1,948.56 2,635.81 3,543.20 4,042.50 4,278.30 6,376.80

Interest 28.67 6.89 2.89 2.93 3.52 5.57 3.13 7.2 116.8 196.8 108.4

PBDT 363.01 849.19 1,080.45 1,056.75 1,230.84 1,942.99 2,632.68 3,536.00 3,925.70 4,081.50 6,268.40

Depreciation 69.85 97.94 141.89 137.94 151.6 185.97 292.26 359.8 456 533.6 579.6

Other Written Off 0 0 0 0 0 0 0 0 0 0 0

Profit Before Tax 293.16 751.25 938.56 918.81 1,079.24 1,757.02 2,340.42 3,176.20 3,469.70 3,547.90 5,688.80

Extra-ordinary items 0 -2.43 0.82 -16.27 -23.11 -7.06 -33.85 0 0 0 0

PBT (Post Extra-ord Items) 293.16 748.82 939.38 902.54 1,056.13 1,749.96 2,306.57 3,176.20 3,469.70 3,547.90 5,688.80

Tax 50.1 91.4 73.26 89.3 141.27 255.15 286.1 334.1 406.4 574.1 790.8

Reported Net Profit 248.26 666.35 866.11 813.23 914.88 1,494.82 2,020.48 2,842.10 3,063.30 2,973.80 4,898.00

Total Value Addition 975.31 1,411.73 1,646.31 2,254.92 3,146.15 4,192.44 6,375.55 8,540.40 10,824.70 13,306.00 13,391.10

Preference Dividend 2.56 1.8 0 0 0 0 0 0 0 0 0

Equity Dividend 6.87 11.62 23.25 23.26 675 351.79 712.88 873.7 876.5 586 880.9

Corporate Dividend Tax 1.04 1.38 0 2.98 86.48 49.34 99.98 126.8 148.9 99.6 128.3


Shares in issue (lakhs) 2,291.56 2,324.33 2,324.66 2,325.64 2,327.59 7,035.71 14,257.54 14,590.00 14,615.00 14,649.81 14,682.11

Earning Per Share (Rs) 10.72 28.59 37.26 34.97 39.31 21.25 14.17 19.48 20.96 20.3 33.36

Equity Dividend (%) 15 25 50 50 1,450.00 250 250 300 300 200 300

Book Value (Rs) 27.95 80.71 108.94 143.2 150.7 69.54 45.03 63.86 79.05 85.42 120.49



Appendix 9

Cash Flow Statement: Infosys




Net Profit Before Tax 350.67 765.55 962.54 978.76 1082.27 1757.02 2340.43 3176.2 3469.7 3547.9 5688.8

Net Cash From Operating Activities 466.63 602.31 857.82 736.66 913.91 1666.42 1912.25 2674.6 715.9 4344.5 4477.4

Net Cash (used in)/from Investing Activities -163.65 -768.85 -988.21 -635.38 -

1062.09 -874.58

-

1694.42 -1881.9 -1127.5 -3662.7 -3064.6

Net Cash (used in)/from Financing Activities -266.2 538.15 -22.93 14.88 28.57 -550.61 59.8 238.5 2290.9 -70.7 -96.2

Net (decrease)/increase In Cash and Cash

Equivalents 36.78 371.61 -153.33 116.16 -119.61 246.8 277.63 1031.2 1879.3 611.1 1316.6

Opening Cash & Cash Equivalents 37.95 74.73 446.87 293.54 409.7 290.09 545.38 818 1852.8 3798.1 4347.7

Closing Cash & Cash Equivalents 74.73 446.34 293.54 409.7 290.09 536.9 823 1849.2 3732.1 4409.2 5664.3



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