Tuesday, October 27, 2009


Mahesh Ji, I recently started following your Blog.I am not a regular trader but doing it for investment purpose.I am holding Infosys@2100 for last 2 years.I want to know you opinion regrading Infosys.I want to do some investment keeping 1-2 year on view ,Please suggest me some multibagger stock that can give me good return.Thanks & Regards Amarendra Bhaskar
1. INFOSYS face value is 5 rupees, TCS face value is 1 rupees and WIPRO face value is 2 rupees so I think you understand that INFOSYS have chance to stock spilt and we like high face value share so in this point of view INFOSYS got first place. 1. If this spilt, happen it may give a psychological effect on investors and we see a pre spilt rally in this share as usual. My regular reader knew that I always like share with rs 10 or 5 rupees face value and dislike 1 or 2 rupees face value share because if stock declare spilt usually we see a pre spilt rally.
2. INFOSYS total equity capital is 286.5 million, TCS total equity capital is 195.7 million and WIPRO total equity capital is 293.1 million. We like less equity capital because they have chance to further bonus and right issues so in this term TCS got first place.
3. Book value of infosys share is 310.8 and TCS book value is 68.2 and wipro book value is 85.4 so in this point INFOSYS is again winner. do not worry about low book value compaire to price of infosys because valuation of IT company is decided by his net profit and all other IT company have also a low book value (in IT sectors I find SASKEN COMMUNICATION is a good IT company which traded at 150 below his book value166 so this may be change in multibagger in coming years).
4. In net profit term of FY 08-09, infosys have 5819 million and TCS net profit is 4696.2 million or wipro have 2973.8 million so INFOSYS is again winner in net profit term.
5. Only INFOSYS is a zero debt company in above three.
6. P/E of TCS share is 24 INFOSYS is 21.5 and wipro is 28 so in P/E term we find INFOSYS at a better valuation.
7. So overall if we compare above 3 largest IT company we found INFOSYS is first TCS is second and WIPRO is third choice and my discloser is that I have personally hold 6 share of INFOSYS so my personal interest is included in this company so please read this analysis in this prospective.
8. If one could want to long term investment in an IT counter then sasken communication tech is a 10 rupees face value share with low equity capital of 27.1 million and book value of 166.9, zero debt, net profit 25.7 million traded at P/E 16 may consider as long term IT share investment if market down and one could catch it below 100. (my discloser is that I have personally hold 10 share of sasken comunication so my personal interest is included in this company so please read this analysis in this prospective)

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