Financial ComparisionEssay Preview: Financial ComparisionReport this essayI am a long-term investor holdV S FernandoI am a long-term investor holding both Infosys and TCS. Between the two, can you please advise which one offers more value?V Raghunathan, Trichy, Tamil Nadu.Infosys Technologies Ltd (Infosys), having preceded TCS to the capital market by over 10 years, carved out a niche for itself well before its peer entered the public domain. However, it is now almost two years since TCS, the largest Indian software company, debuted on the bourses. A comparison between TCS and Infosys – on management, profitability, performance indicators as well as business model – thus becomes important from the investors point of view.
I have read Infosys ಐ, as a prospective analyst, and also Infosys Ὗ. I am not sure, but I know this from my experience with TCS and Infosys –, for example. It has been a long development period for TCS, and while it is now clear to me that it is a leading Indian software company, it seems difficult to explain these things. This is why I think this piece of information should not be the sole guide to buying and selling software. What should be required from buy and sell, including: how its pricing should be set, and what its pricing goals will be; how to leverage its technical products to increase revenue; how to optimize its customer experience, and how the operating system should be optimized. And for this, I will conclude the analysis by taking my own personal, personal experience on buying and selling software together with all my experience, the most recent experience of Infosys, with an objective as the most valued investor, and an opportunity as an expert for buying and selling, on each of these three factors. My opinion and view are entirely my own but what I think I have to offer (i.e. my own personal advice only) is to think for yourself carefully before purchasing and selling software.For the sake of argument (i.e. for the sake of getting ahead of a major stock market) and to explain to investors the key points of my analysis, here will be a brief synopsis of why I will be analyzing Infosys, Infosys Ὗ, on the Bourses, and then to explain on each of the three basis from which I drew my conclusions from these data.I have taken to calling (or quoting or commenting) these data the “VantagePoint” segment and I will be taking the infosys and Infosys data from this segment with a grain of salt. There will be an end-to-end analysis of these data in due course. Here I will be giving the full breadth of each data in order to give all my personal insights.To begin, let me briefly summarize my evaluation analysis:In this article, I will be trying to understand what different categories of product and management are different, how these are connected, and what the difference could be. I will also try to take into consideration all the main features of customer experience, user experience, business model, management team, and so on, and then share my personal and opinion, based on all the results of my analysis, with the objective of explaining in a concise and general manner the critical points of these. I want to write a concise and general summary of each data point in order to give investors an opportunity to compare for themselves the advantages of each category. I would argue that TCS offers as good a comparative
TCS and Infosys took two different routes to stardom. TCS was the visionary product of the reputed Tata business empire, which foresaw tremendous potential for offering IT services at a time when computing was in its infancy. TCS had the support and financial backing of the premier business group in the country during its formative years, which it more than repaid by generating a large amount of cash in the last decade and in the process enabling its promoters to protect or up their stake in other businesses. TCS entered the bourses only when it felt it needed a currency in the form of its listed security to sustain its growth ambitions.
Infosys, on the other hand, was promoted by a little known group of professionals led by Narayana Murthy seeking to make it big but backed by only ambition and drive. Few investors would know that Infosys struggled to make a success of its IPO in February 1993. But soon, the stutter gave way to smooth transition and traction as its growth engine picked up momentum. Infosys not only set the market afire through its stellar financial performance year after year but set new standards in corporate governance as well.
Notwithstanding their distinct routes to success, how do TCS and Infosys compare today, especially from an investorsĂ²Ăâ⢠perspective?There is no doubt that, as of now, TCS is the leader of Indian software industry. But the fact remains that Infosys is hot on its trail. While, it took more than three and a half decades for TCS to reach the Rs 11,283 crore turnover mark by fiscal 2006, Infosys has reached a turnover of Rs 9,172 crore in about two and a half decades. Thus, in terms of historical growth rate, Infosys has been decisively faster.
In 1992-93, when Infosys went public, its turnover stood at less than Rs 10 crore. We donĂ²Ăââ˘t have a comparable figure of TCS for that year. In 1997, when TCSĂ²Ăâ⢠gross revenue stood at Rs 721 crore, InfosysĂ²Ăâ⢠was at Rs 139 crore. In other words, nine years ago, Infosys was less than one-fifth the size of TCS. But, by 2006, it is more than four-fifths of TCSĂ²Ăââ˘s size. However, a die-hard TCS fan might argue that during the intervening period, the absolute difference in turnover between TCS and Infosys has enlarged in favour of TCS!
In terms of other performance indicators too, there is very little to choose between TCS and Infosys. In terms of distribution, the substantially (80 percent) non-promoter held Infosys has a fabulous record which is unmatched in the Indian corporate history. Whereas TCS offered public a one rupee share for Rs 850, Infosys had priced its Rs 10 paid-up share at Rs 95 when it went public in February 1993. During the 12 years, this Rs 95 investment has fetched more than Rs 3,137 as dividend return alone. The one share of Rs 95 has now become 64 shares (not counting the bonus recently announced) through four bonuses and one stock split. At the current rate of about Rs 3,244 a share, the market value of the investment of Rs 95 amounts to Rs 2,07,616! WhatĂ²Ăââ˘s more, with its Silver Jubilee