BUSINESS ECONOMICS
Assignment
ON
Submitted To: Submitted By:
Dr. Manoj Kumar Sharma Shivanshu Gupta
MBA-B
Roll No: 30
Panjab University, Chandigarh
Oct’ 2019
1
Table of Contents
About The Company.............................................................................................................................3
Brief History..........................................................................................................................................3
Founders................................................................................................................................................4
Board of Directors.................................................................................................................................5
Executive Officers.................................................................................................................................6
CEOs.....................................................................................................................................................7
Vision and Mission................................................................................................................................8
Products and Services............................................................................................................................9
Geographical Presence..........................................................................................................................9
Acquisitions.........................................................................................................................................10
Employees Related Data......................................................................................................................11
Key Milestones....................................................................................................................................12
Key Statistics.......................................................................................................................................12
Financial Data......................................................................................................................................13
Revenue...........................................................................................................................................13
Cash Generation and Cash Flow......................................................................................................15
Deals and Clients Data....................................................................................................................16
Listing and Share Holding Pattern.......................................................................................................17
Growth Pattern in Shares.................................................................................................................18
Awards and Recognitions....................................................................................................................19
Determinants of Demand.....................................................................................................................20
Price.................................................................................................................................................20
Price of Related Goods....................................................................................................................20
Quality.............................................................................................................................................21
Taste and Preference of Customers..................................................................................................21
Supply.............................................................................................................................................21
Income.............................................................................................................................................21
Interpretation and Conclusion..............................................................................................................22
References...........................................................................................................................................22
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About The Company
Infosys Limited is an Indian multinational corporation that provides business consulting,
information technology and outsourcing services. It has its headquarters in Bangalore,
Karnataka, India.
Infosys is the second-largest Indian IT company after Tata Consultancy Services by revenue
and 596th largest public company in the world based on revenue. On March 29, 2019, its
market capitalisation was $46.52 billion. The credit rating of the company is A− (rating by
Standard & Poor's).
Brief History
Infosys was established by seven engineers in Pune, Maharashtra, India with an initial capital
of $250 in 1981. It was registered as Infosys Consultants Private Limited on 2 July 1981. In
1983, it relocated its office to Bangalore, Karnataka, India.
The company changed its name to Infosys Technologies Private Limited in April 1992 and to
Infosys Technologies Limited when it became a public limited company in June 1992. It was
later renamed to Infosys Limited in June 2011.
An initial public offer (IPO) in February 1993 with an offer price of ₹95 (equivalent to ₹510
or US$7.40 in 2018) per share against book value of ₹20 (equivalent to ₹110 or US$1.60 in
2018) per share. Its shares were listed in stock exchanges in June 1993 with trading opening
at ₹145 (equivalent to ₹790 or US$11 in 2018) per share.
Its annual revenue reached US$100 million in 1999, US$1 billion in 2004 and US$10 billion
in 2017.
In July 2014, Infosys started a product subsidiary called EdgeVerve Systems, focusing on
enterprise software products for business operations, customer service, procurement and
commerce network domains. In August 2015, the Finacle Global Banking Solutions assets
were officially transferred from Infosys and became part of the product company EdgeVerve
Systems product portfolio.
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Founders
4
Board of Directors
5
Executive Officers
6
7
CEOs
Since its establishment in 1981 till 2014, the CEOs of Infosys were its promoters, with N.R.
Narayana Murthy leading the company in its initial 21 years. Dr Vishal Sikka was the first
non-promoter CEO of Infosys who worked for around 3 years. Dr Vishal Sikka resigned in
August 2017. In a personal note to board colleagues, Sikka cites a "drumbeat of distractions"
and "false, baseless, malicious and increasingly personal attacks" as his reason for leaving
Infosys. Many sources suspect this is in reference to a long running feud with Infosys
Founders over the new direction Sikka was reportedly taking Infosys. After his resignation,
UB Pravin Rao was appointed as Interim CEO and MD of Infosys. Infosys has appointed
Salil Parekh chief executive officer (CEO) and managing director (MD) of the company with
effect from January 2, 2018.
CEOs
Name Period
Narayan Murthy 1981 to March 2002
Nandan Nilekani March 2002 to April 2007
S. Gopalakrishnan April 2007 to August 2011
S. D. Shibulal August 2011 to July 2014
Vishal Sikka August 2014 to August 2017
UB Pravin Rao (interim) August 2017 to December 2017
Salil S. Parekh January 2018 onwards
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Vision and Mission
Vision: To be a globally respected corporation that provides best-of-breed business solutions
delivered by best-in-class people.
Mission: To achieve its objectives in an environment of fairness, and honesty towards its
clients, employees and society at large.
3-Year Roadmap of Infosys
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Products and Services
Infosys provides software development, maintenance and independent validation services to
companies in finance, insurance, manufacturing and other domains.
One of its known products is Finacle which is a universal banking solution with various
modules for retail & corporate banking.
Its key products and services are:
NIA – Next Generation Integrated AI Platform (formerly known as Mana)
Infosys Consulting – a global management consulting service
Infosys Information Platform (IIP) – Analytics platform
EdgeVerve Systems which includes Finacle, a global banking platform
Panaya Cloud Suite
Skava
Geographical Presence
Infosys has 82 sales and marketing offices and 123 development centres across the
world as of March 31, 2018, with major presence in India, United States, China,
Australia, Japan, Middle East and Europe.
In 2019, 60%, 24% and 3% of its revenues were derived from projects in North
America, Europe and India, respectively.
Remaining 13% of revenues were derived from rest of the world.
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Acquisitions
Name of acquired Acquisition
Based in Acquisition cost Business of acquired company
company date
Expert Information
Australia US$23 million Dec 2003 IT service provider
Services
McCamish Systems USA US$38 million Dec 2009 Insurance and financial services
Strategic sourcing and category
Portland Group Australia AUD 37 million Jan 2012
management
Lodestone Holding
Switzerland US$345 million Sep 2012 Management consultancy
AG
Panaya Israel US$200 million Mar 2015 Automation technology
Skava USA US$120 million Apr 2015 Digital experience solutions
Information management
Noah-Consulting USA US$70 million Nov 2015
consulting services
Skytree USA Undisclosed amount Apr 2017 Machine learning
Product design and customer
Brilliant Basics UK GBP 7.5 million Aug 2017
experience
Salesforce advisor and consulting
Fluido Oy Finland EUR 65 million Oct 2018
partner
Advertising and creative strategy
WongDoody USA US$75 million Jan 2019
services
Stater N.V. Netherlands EUR 127.5 million Apr 2019 Mortgage services
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Employees Related Data
Infosys had a total of 228,123 employees at the end of March 2019
Out of which 37% were women.
Out of its total workforce, 79% are software professionals, 16% are working in its
BPM arm and remaining 5% work for support and sales.
In 2016, 89% of its employees were based in India.
During financial year 2019, Infosys received 2,333,420 applications from prospective
employees, interviewed 180,225 candidates and had a gross addition of 94,324
employees, a 4% hiring rate. These numbers do not include its subsidiaries.
The attrition rate of Infosys Ltd., including its subsidiaries, for financial year 2019
was 21.5%.
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Key Milestones
Key Statistics
13
Financial Data
Revenue
14
15
Agile Digital Portfolio of Infosys
16
Cash Generation and Cash Flow
17
Deals and Clients Data
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Listing and Share Holding Pattern
In India, shares of Infosys are listed on the BSE where it is included in BSE SENSEX and
NSE where it is included in CNX Nifty. Its shares are listed by way of American depositary
receipts (ADRs) at the New York Stock Exchange.
Over a period of time, the shareholding of its promoters has gradually reduced, starting from
June 1993 when its shares were first listed. The promoters' holdings reduced further when
Infosys became the first Indian-registered company to list Employees Stock Options Schemes
and ADRs on NASDAQ on 11 March 1999. The promoter holding on 31 March 2002 was
28.72% and at 30 June 2017 it dropped to 12.75% as they gradually sold their shares and
reduced involvement in active management of the company.
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Growth Pattern in Shares
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Awards and Recognitions
Awarding Committee Award Year
Infosys was ranked as the 3rd 2019
Best Regarded Company in
the World by Forbes.
HfS Research included Infosys 2017
in Winner's Circle of HfS
Blueprint for Managed
Security Services, Industry 4.0
services and Utility
Operations.
Infosys was ranked 18th 2013
largest IT services provider in
the world by HfS Research.
Infosys was ranked 53rd in 2013
Forbes list of World's Most
Innovative Companies.
Infosys was ranked No. 19 2012
amongst the world's most
innovative companies by
Forbes.
Infosys was in the list of top 2012
twenty green companies in
Newsweek's Green Rankings
for 2012.
Institute of Chartered 2006
Accountants of India included
Infosys into Hall of Fame for
being the winner of Best
Presented Accounts for 11
consecutive years.
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Determinants of Demand
Price
Price of Related Goods
Income
Quality
Taste and Preference of Customers
Supply
Price
Price is the most important determinant of demand.
A “demand curve” plots combinations of prices and quantity demanded.
A shift in price causes a shift along the demand curve.
A change in price causes a shift along the demand curve.
A shift along the demand curve is referred to as a “shift in the quantity demanded.”
A shift in any other variable except price causes a shift in the entire demand curve.
A shift in the entire demand curve is referred to as a “shift in demand.”
For Infosys, the prices have always remained competitive and are as per the value of
the product or services delivered.
Price of Related Goods
Changes in the prices of other goods can increase or decrease demand.
A good that causes an increase in the demand for another good when its price
increases is called a “substitute good.”
A good that causes a decrease in the demand for another good when its price increases
is called a “complementary good.”
As Infosys provides services in a highly competitive market where number of players
are present, it has to wisely choose the pricing of its services and it has done a pretty
good job in that field.
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Quality
Demand curves can shift due to changes quality.
At a given price, demand for Pizza hut’s pizza is higher than the demand for Papa
John’s. Similarly, CDs cost more than cassettes because the music is of higher quality.
Infosys is known for providing Quality. This is the major determinant of its demand
in the IT field.
Taste and Preference of Customers
Demand curves can shift due to changes in tastes over time. For example, demand for
cereal may be high in the morning but low at night.
The taste and preference of the customers towards Infosys has shown an increasing
trend over the years as more and more customers are getting linked with it and
availing its services.
Supply
Demand curves do not shift due to changes supply.
Shifts in supply change the equilibrium price causing a shift along the demand curve.
Infosys has always been consistent in delivering its services and it has been a major
determinant of demand for Infosys.
Income
Changes in income can increase or decrease demand.
A good whose demand decreases with an increase in income is called an “inferior
good.”
A good whose demand increases with an increase in income is called a “normal
good.”
Infosys has shown by and large a consistent growth in the income and demand of its
products and services.
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Interpretation and Conclusion
It can be interpreted from the study that Infosys has shown a positive growth in terms
of revenue, number of employees, operating cash flow, free cash flow and dividend
per share.
There has been a steady trend in the revenue growth and operating margins in the
financial year 2018-19.
They have significantly increased their digital agile portfolio considering the current
trend in the shift of technology in this direction.
The major determinant of demand for Infosys has been its consistent delivery of
quality services and maintaining its standards across organisation.
References
Geetika, Ghosh, P. and Choudhury, P. (2018). Managerial Economics. 3rd ed. New
Delhi: Tata McGraw Hill Education.
En.wikipedia.org. (2019). Infosys. [online] Available at:
https://en.wikipedia.org/wiki/Infosys [Accessed 2 Oct. 2019].
Limited, I. (2019). Navigate your next. [online] Infosys.com. Available at:
https://www.infosys.com/ [Accessed 2 Oct. 2019].
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