| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 30.74 | 75 |
| Intrinsic value (DCF) | 8.55 | -51 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 8.98 | -49 |
Infosys Limited (NYSE: INFY) is a global leader in next-generation digital services and consulting, headquartered in Bengaluru, India. The company provides a comprehensive suite of technology solutions, including AI-driven services, cloud computing, cybersecurity, and enterprise software modernization. With a strong focus on digital transformation, Infosys serves diverse industries such as financial services, healthcare, retail, and manufacturing. Its flagship platforms like Finacle (core banking), Infosys Topaz (generative AI), and Edge suite empower businesses to enhance efficiency and innovation. Operating across North America, Europe, and Asia, Infosys combines deep domain expertise with cutting-edge technologies to deliver scalable, sustainable solutions. As a pioneer in IT outsourcing, the firm maintains a robust client base, including Fortune 500 companies, reinforcing its position in the competitive $1.2 trillion global IT services market.
Infosys presents a compelling investment case with its strong revenue growth (FY2024 revenue: $19.3B), healthy net margins (~16.4%), and consistent cash flow generation ($4.5B operating cash flow). The company’s focus on high-margin digital services (now ~62% of revenue) and generative AI (via Topaz) positions it well for industry tailwinds. However, exposure to macroeconomic slowdowns in key markets (62% revenue from North America) and wage inflation in India’s competitive talent market pose risks. The stock’s low beta (0.54) suggests defensive characteristics, while its 2.7% dividend yield offers income stability. Valuation at ~23x P/E appears reasonable given sector peers.
Infosys competes in the upper tier of global IT services, differentiated by its strong digital transformation capabilities and AI/cloud-first strategy. Its Cobalt cloud suite (400+ solutions) and Topaz AI platform provide a technological edge over traditional outsourcing rivals. The company maintains cost competitiveness through its Global Delivery Model (80,000+ employees in India) while investing heavily in R&D (2.5% of revenue). However, it faces pressure from Accenture’s consulting dominance and TCS’s scale in banking IT. Infosys’s vertical specialization (e.g., Finacle in banking) creates sticky client relationships but requires continuous innovation to fend off niche players. The firm’s 94% client retention rate demonstrates strong positioning, though deal sizes lag behind IBM’s enterprise contracts. Its partnership ecosystem (Microsoft, SAP, AWS) enhances solution depth but creates some vendor dependency.