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Discounted Cash Flow (DCF) Analysis Unlevered


Infosys Limited American Depositary Shares

Infosys Limited American Depositary Shares (INFY)

Technology

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 7,398.008,248.778,710.709,500.7610,207.6210,938.4811,798.2512,755.0913,789.5214,907.8516,116.88
Revenue (%)
EBITDA 2,549.352,645.382,993.003,072.553,227.653,432.503,290.534,031.884,358.874,712.375,094.55
EBITDA (%)
EBIT 2,342.212,419.362,817.912,850.232,973.483,143.723,003.833,720.664,022.404,348.624,701.29
EBIT (%)
Depreciation 207.14226.02175.09222.32254.17288.78286.70311.22336.46363.75393.25
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 4,341.154,841.204,999.074,946.105,027.254,023.173,787.246,085.456,578.987,112.547,689.36
Total Cash (%)
Account Receivables 1,754.071,863.402,008.692,167.122,462.082,670.082,921.253,012.753,257.093,521.243,806.81
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 34.7728.8721.7857.9557.16107.20239.50102.04110.32119.26128.94
Accounts Payable (%)
Capital Expenditure -381.74-451.21-366.72-413.28-411.37-309.56-349.23-506.38-547.44-591.84-639.84
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 11.08
Diluted Shares Outstanding 4,353.42
Cost of Debt
Tax Rate 26.74
After-tax Cost of Debt -1.29
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.66
Total Debt -
Total Equity 48,235.90
Total Capital 48,235.90
Debt Weighting 0.00
Equity Weighting 100.00
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 7,398.008,248.778,710.709,500.7610,207.6210,938.4811,798.2512,755.0913,789.5214,907.8516,116.88
EBITDA 2,549.352,645.382,993.003,072.553,227.653,432.503,290.534,031.884,358.874,712.375,094.55
EBIT 2,342.212,419.362,817.912,850.232,973.483,143.723,003.833,720.664,022.404,348.624,701.29
Tax Rate 26.35%27.61%28.57%28.03%28.04%20.90%26.74%26.61%26.61%26.61%26.61%
EBIAT 1,725.151,751.262,012.942,051.442,139.632,486.572,200.612,730.762,952.233,191.653,450.50
Depreciation 207.14226.02175.09222.32254.17288.78286.70311.22336.46363.75393.25
Accounts Receivable --109.33-145.29-158.44-294.95-208.01-251.16-91.51-244.33-264.15-285.57
Inventories -----------
Accounts Payable --5.90-7.0936.18-0.7950.03132.31-137.468.288.959.67
Capital Expenditure -69.47-84.4946.56-1.92-101.8139.67157.1541.0744.4048.00
UFCF 1,932.301,931.521,951.152,198.072,096.132,515.572,408.122,970.173,093.703,344.603,615.85
WACC
PV UFCF 2,610.822,549.612,584.272,619.40
SUM PV UFCF 18,615.51

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.66
Free cash flow (t + 1) 3,760.48
Terminal Value 141,371.42
Present Value of Terminal Value 102,412.68

Intrinsic Value

Enterprise Value 121,028.19
Net Debt -3,787.24
Equity Value 124,815.43
Shares Outstanding 4,353.42
Equity Value Per Share 28.67

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
8.66 (%) 12.48 Buy 13.52 Buy 14.88 Buy 16.71 Buy 19.34 Buy 23.40 Buy 30.51 Buy 46.19 Buy 109.37 Buy
8.16 (%) 11.91 Buy 12.82 Buy 13.99 Buy 15.53 Buy 17.66 Buy 20.83 Buy 25.99 Buy 35.94 Buy 63.05 Buy
7.66 (%) 11.41 Buy 12.21 Buy 13.22 Buy 14.52 Buy 16.29 Buy 18.82 Buy 22.72 Buy 29.57 Buy 44.66 Buy
7.16 (%) 10.97 Sell 11.67 Buy 12.54 Buy 13.66 Buy 15.15 Buy 17.20 Buy 20.25 Buy 25.22 Buy 34.80 Buy
6.66 (%) 10.56 Sell 11.19 Buy 11.95 Buy 12.92 Buy 14.18 Buy 15.88 Buy 18.32 Buy 22.08 Buy 28.67 Buy
6.16 (%) 10.20 Sell 10.76 Sell 11.43 Buy 12.28 Buy 13.36 Buy 14.78 Buy 16.76 Buy 19.70 Buy 24.49 Buy
5.66 (%) 9.87 Sell 10.37 Sell 10.97 Sell 11.71 Buy 12.64 Buy 13.85 Buy 15.49 Buy 17.84 Buy 21.46 Buy
5.16 (%) 9.58 Sell 10.02 Sell 10.56 Sell 11.21 Buy 12.02 Buy 13.06 Buy 14.44 Buy 16.35 Buy 19.17 Buy
4.66 (%) 9.30 Sell 9.71 Sell 10.19 Sell 10.77 Sell 11.48 Buy 12.38 Buy 13.54 Buy 15.12 Buy 17.38 Buy