AUTHOR: SAMEER AHUJA

INFOSYS

Company Overview

Infosys Technologies Limited (Infosys), incorporated on July 2, 1981, is a global

technology services firm that defines, designs and delivers information technology (IT)-
enabled business solutions to its clients. The Company provides end-to-end business
solutions that leverage technology for its clients, including consulting, design,
development, software re-engineering, maintenance, systems integration, package
evaluation, and implementation and infrastructure management services. Infosys also
provides software products to the banking industry. Infosys BPO (formerly Progeon
Limited) is a majority owned subsidiary. Infosys Australia, Infosys China and Infosys
Consulting are the Company's wholly owned subsidiaries. In June 2006, Infosys
acquired the shares in Infosys BPO held by Citicorp International Finance Corporation
(CIFC). As a result, Infosys effectively holds 99.98% of the equity share capital of
Infosys BPO as of March 31, 2007.

The Company complements its service offerings with specialist support for clients using
its domain competency group that has expertise in areas, such as securities, insurance,
telecommunication, banking and cash management, supply chain management,
manufacturing, retail and distribution, energy and utilities, healthcare, and travel and
tourism. It also uses its software engineering group and technology lab to create
customized solutions for its clients. In addition, it continually evaluates and trains its
professionals in new technologies and methodologies.

Core Services

Custom Application Development

• The Company provides customized software solutions for its clients. Infosys creates
new applications and enhances the functionality of its clients' existing software
applications. The Company's projects vary in size and duration.
• The Company's application development services span the entire range of
mainframe, client server and Internet technologies. An increasing proportion of
Infosys' applications development engagements are related to emerging platforms,
such as Microsoft's .NET or open platforms, such as Java 2 Enterprise Edition
(J2EE) and Linux

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AUTHOR: SAMEER AHUJA

Maintenance and Production Support

Infosys provides maintenance services for its clients' large software systems that cover
a range of technologies and businesses, and are typically critical to a client's business.
The Company focuses on long-term functionality, stability and preventive maintenance
to avoid problems that typically arise from incomplete or short-term solutions. While
Infosys performs most of the maintenance work at its global development centers using
secure and redundant communication links to its client's systems, it also maintain a
team at the client's facility to coordinate certain key interface and support functions

Software Re-engineering

The Company's software re-engineering services assist its clients in converting their
existing IT systems to newer technologies and platforms developed by third-party
vendors. Infosys' re-engineering services include Web-enabling its clients' existing
legacy systems, database migration, implementing product upgrades, and platform
migrations, such as mainframe to client-server and client-server to Internet platforms.

Package Evaluation and Implementation

• Infosys assists its clients in the evaluation and implementation of software packages
developed by third-party vendors. It also provides training and support services in
the course of their implementation.
• The Company specializes in enterprise resource planning packages developed by
vendors, including Oracle, PeopleSoft, Retek and SAP; supply chain management
packages developed by vendors, including i2, Manugistics and Oracle; customer
relationship management packages developed by vendors, including PeopleSoft
(Vantive) and Siebel; business intelligence packages developed by vendors, such as
Business Objects and Cognos, and enterprise application integration packages
developed by vendors, such as IBM and TIBCO.

Information Technology Consulting

• The Company's IT consulting professionals assist its clients by providing technical

advice in developing and recommending appropriate IT architecture, hardware and
software specifications to deliver IT solutions designed to meet specific business
and computing objectives.

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AUTHOR: SAMEER AHUJA

• Infosys offers IT consulting in the areas of migration planning, institution-wide

implementation and overall project management involving multiple vendors under a
common architecture; IT infrastructure assessment, which includes assessing its
clients' IT capabilities against existing and future business requirements and
recommending appropriate technology infrastructure, and technology roadmap
• development, which allows clients to evaluate emerging technologies and develop
the standards and methodologies for applying those emerging technologies.

Other Solutions

• Infosys' service offerings including testing services, engineering services, business

process management, systems integration, infrastructure management, and
operational and business process consulting. The Company offers end-to-end
validation solutions and services, including enterprise test management,
performance benchmarking, test automation and product certification.
• For each particular client, Infosys focuses on developing a framework for ongoing
testing in order to seek continuous improvement in the predictability of its client's
internal systems. The Company's service professionals are trained in test
management tools from developers, such as Mercury Interactive, IBM-Rational and
Segue.

Finacle

• Finacle®, the universal banking solution from Infosys, helps banksby enabling them
to shift their strategic and operational priorities. It maximizes their opportunities for
growth,while minimizing the risks that come with large-scale business transformation
• Finacle® currently powers 91 banks across 54 countries, helpingthem serve over
100 million customers, 150 million accounts, 80,000users and supporting over 36
million peak banking transactions per day spread across multiple installations

Key industries

Infosys serves various industries through its vertical business units, such as:

• Aerospace and Automobile (AnA)

• Banking & Capital Markets (BCM)
• Communication Service Providers (CSP)
• Resources, Energy & Utilities (REU)

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AUTHOR: SAMEER AHUJA

• Hi Tech & Discrete Manufacturing (HTDM)

• Insurance, Healthcare & Life Sciences (IHL)
• Media and Entertainment
• Product Lifecycle and Engineering Solutions (PLES)
• Retail, Distribution & CPG (RETL)
• Transportation & Services (TnS)
• Independent Validation Solutions (IVS) - provides software testing services.
• IT Infrastructure Management Services (IMS) - manages core networks, data
centers and servers of clients.
• Real Estate
• Life science

In addition to these, there are business units aligned to clients' geographies, such as
EMEA (Europe, Middle East & Africa), APAC (Asia-Pacific) and CAND (Canada). There
are also horizontal business units such as ES (Enterprise Solutions), which specializes
in ERP and package implementation and works with clients across industries and
geographies and SI (Systems Integration), which provides integration services to clients

Revenue Segments :

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AUTHOR: SAMEER AHUJA

Key People

Nilekani, Nandan M. 52 1987Co-Chairman of the Board Trade Activity

Murthy, N. R. Narayana 60 1981Non-Executive Chairman of the Board and Chief Trade Activity
Mentor
Gopalakrishnan, S. 52 1987Chief Executive Officer and Managing Director Trade Activity
Balakrishnan, Vibin 42 1999Chief Financial Officer Trade Activity
Shibulal, S. D. 52 1997Chief Operating Officer, Director Trade Activity
Parvatheesam, K. -- 2006Secretary, Compliance Officer Trade Activity
Pai, T. V. Mohandas 48 1994Director and Head - Administration, Education & Trade Activity
Research and Human Resources, Director
Krishnaswamy, Dinesh 52 1996Head - Communication Design Group, Information Trade Activity
Systems, Quality & Productivity, Director
Batni, Srinath 52 1996Group Co Head - World-wide Customer Delivery, Trade Activity
Director

Company Strategy for future

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AUTHOR: SAMEER AHUJA

• Increase businesses from existing and new clients

• Expand geographically
• Continue to develop deep industry knowledge
• Enhance brand visibility
• Pursue alliance and strategic acquisitions
• Continue to invest in infrastructure and employees

Key Competitors

• Offshore Technology services firms such as Cognizant Technologies, Satyam

Computer Services, Tata Consultancy Services and Wipro
• Consulting firms as Accenture , Cap Gemini
• IT Outsourcing firms such as EDS ,CSC

Key Clients

ABN AMRO , AIRBUS, AETNA INC,GOLDMAN SACHS

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AUTHOR: SAMEER AHUJA

During fiscal 2007, 95.3% of revenues came as repeat business and during 2006,
95.0% revenues came from repeat business from existing clients

Key Numbers

2007 Sales (mil.) $3,090.0

1-Year Sales Growth 43.6%

2007 Net Income (mil.) $850.0

1-Year Net Income Growth 53.2%

2007 Employees 72,200

1-Year Employee Growth 37.0%

Financials &Stock Performance

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FINANCIAL HIGHLIGHTS

Fiscal Year
Fiscal Year Ends: 31-Mar
Most Recent Quarter (mrq): 30-Jun-07

Profitability
Profit Margin (ttm): 27.96%
Operating Margin (ttm): 27.13%

Management Effectiveness
Return on Assets (ttm): 21.37%
Return on Equity (ttm): 39.37%

Income Statement
Revenue (ttm): 3.36B
Revenue Per Share (ttm): 6.01
Qtrly Revenue Growth (yoy): 40.60%
Gross Profit (ttm): 1.31B
EBITDA (ttm): 1.05B
Net Income Avl to Common (ttm): 939.00M
Diluted EPS (ttm): 1.65
Qtrly Earnings Growth (yoy): 51.10%

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AUTHOR: SAMEER AHUJA

Balance Sheet
Total Cash (mrq): 1.59B
Total Cash Per Share (mrq): 2.778
Total Debt (mrq): 0
Total Debt/Equity (mrq): N/A
Current Ratio (mrq): 6.302
Book Value Per Share (mrq): 5.33

Cash Flow Statement

Operating Cash Flow (ttm): 1.02B
Levered Free Cash Flow (ttm): 240.50M

Latest Developments

• NASDAQ-listed Infosys (INFY.O) will provide services like application development,

management and maintenance of railway operations of Canadian Pacific, which
operates a 13,500-mile (21,700-kilometre) transcontinental railway, a company
statement said
• Infosys Technologies Ltd. (INFY.BO) signed a $250 million outsourcing contract with
Royal Philips Electronics (PHG.AS: Quote, Profile , Research) on Wednesday and
bought three of the Dutch firm's back-office centres to extend its presence in Europe.

Analysis :

Key challenges faced by Infosys are

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AUTHOR: SAMEER AHUJA

• Rise in Wage levels on Indian IT workers.

Infy can overcome this risk by growing up the value chain so that it can afford to
increase its billing rates and still add value to its customers .Second thing it can do is to
move their operations to second level cities in India that have low cost of living and
where wage pressure is less. One of the good steps Infy has taken to this regard was
by opening its Bhubhneashwar centre. Its cost of living is way less than that of
Bangalore. Another good example is Gandhinagar where Patni computers was one of
the first big IT companies to open its office.

• Change in exchange rates.

Infy should grow its client base in India and China where the impact of foreign exchange
is negligent. TCS is a good example with this regard.Its 2006 revenues had 12.5%
revenues generated from India. This is around $300 mn. With the present Indian IT
market valued at $5bn (obtained from TCS's 2006 annual report) and expected to grow
at 11%, Infy has scope of getting a good maket share.

• Rise in Infrastructure costs

Infy's 2006 capital expenses was $246mn compared to that of $185mn in 2005. This is
an increase of over 30%. In order to continue this pace the company needs to invest a
large amount of capital in building new facilities. With recent surge in real estate prices
in India, Infy would face challenges in controlling its capital expenditures towards
expanding its facilities

• Inability to acquire foreign companies

The present Reserve Bank of India guidelines state that in ceratin cases Indian
companies have to take the central bank's permission to acquire a foreign company.
This increases the lead time required to acquire a company.

• Backlash towards outsourcing in foreign countries

One way is to employ local talent.Another way can be employing virtual classroom
techniques by which a person sitting in India can get US experience that he would
otherwise get by being physically present in USA. Multinational companies like
Accenture are doing a great job in this front and are not so much dependent on wok
visas as the Indian companies like Infy.

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AUTHOR: SAMEER AHUJA

• Present Tax benefits are limited till 2009

Most Indian IT companies are enjoying a tax holiday which exempts them from taxes on
exports performed from designated export promotion zones. This helps Indian IT
companies to reduce their tax rate.But this benefit is only applicable till fiscal 2009. After
that the Indian IT companies would be taxed the same way as other Indian companies

Infosys in UAE

Contact Information
Z3 Office 11, SAIF Zone,
P.O. Box 8230,
Sharjah - UAE.
Phone: +971 6 557 1068
Fax: +971 6 557 3768

Industry offerings : Retail

Services offered : Package Implementation .Infrastructure services ,Enterprise Solutions

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