2009

9 9 9 …. An auspicious day coming to an end…Also now ‘Navkar Mantra’ Day

1 Comment / Inspiring and Motivating, Reflections / By Gaurav Parikh

It’s September 9,2009..9 9 9…an auspicious day is now easing out to the next….From 9.09.09 morning the Jains have been chanting in unison the powerful ‘Navkar Mantra’…I did too….felt good and warm…so from now every year September 9 will also celebrate ‘Navkar Mantra’

Namo Arihantanam
I bow down to the Arihants who have reached enlightenment
by overcoming inner weaknesses, who have attained infinite
knowledge, vision, bliss, and power and have showed the
path which brings an end to the cycle of birth and death.

Namo Siddhanam
I bow to the Siddhas or liberated souls who have attained
the state of perfection and immortality by liberating
themselves of all karma.

Namo Ayariyanam
I bow to Acharayas, who are the heads of the Jain
congregation and who preach the principles of religion and
the path of liberation that includes right knowledge,
right perception, and right conduct.

Namo Uvajjhayanam
I bow to the Upadhayas who have studied the Jain
scriptures and who understand the true nature of the soul
and karma. Upadhyayas are the teachers of scriptures and
show us the importance of the spiritual life over material
life.

Namo Loe Savva-sahunam
I bow to all ascetics, including sadhus and sadhvis, who
strictly follow the five great vows of conduct and inspire
us to live a simple life.

Eso Panch Namokaro
To these five types of great souls I offer my praise,

Savva-pavappanasano
Such praise will help destroy my negative vibrations and sins,

Manglananch Savvesim
Giving this praise is most auspicious,

Padhaman Havei Mangalam
So auspicious as to bring happiness and bliss.

Infosys manages to beat Earnings Expectations but only because it deferred Investments…I expect it to correct to below Rs 1500

4 Comments / Corporate Governance, Information Technology, Interesting News Sightings, Investor Gurus, INVESTOR MISTAKES, Reflections, STOCKS, VALUATION / By Gaurav Parikh

Infosys declared It’s Q1 FY 10 Results this morning…….as per IFRS……..as per Indian GAAP

I don’t see any headwind in Infosys…I will be surprised if it climbs more from the current Rs 1750 levels….Infact I expect it to drop below Rs 1500…..Read on to understand my thought track

It has managed to show a little higher Basic EPS at Rs 25.56 than expected for Q 1 but has given a lower FY 10 EPS Guidance Range of Rs 94.59 to Rs 96 down 9.6% and 8.2% respectively yoy

Market has reacted positively to Q 1 Results and Infosys is up 4% + at Rs 1755 with the Sensex at 13844,up 87 points just past 2.30 pm….This Price gives a Forward Multiple of 18 for FY 10

In April 2009 ,Infosys had warned of a 3% drop in margins in FY 10….This is not reflected in Q 1 as Infosys has deferred Heavy Investments to the remaining three quarters in FY 10…The margin contraction would be lower at 1.5% in FY 10 says Infosys CFO,V Balakrishnan

The Consolidated Networth of Infosys at June 30,2009 is Rs 19827 crs ( US 4.13 Billion) while the Market Cap is currently five times this at over Rs 102000 crs ( just under US $ 21 Billion)

Infosys is cash rich and has US $ 2.51 Billion currently,that’s over Rs 12000 crs …It’s reflected in the fact that Other Income has shot up by 129 % to Rs 269 crs in Q1,indicating an 8% to 9% annual return on this…This would contribute nearly 20% of Total Profit for FY 10 !…This contribution % would move lower if Infosys does shift, as planned, some of the Cash to Business Investments…so you will probably see an Other Income Element of @ Rs 750 crs to Rs 800 crs,under 15% of projected Earnings levelsof @ Rs 5500 crs for FY 10

Now RONW in FY 2009 was 32.80 % with Infosys earning a consolidated Rs 5988 crs on Year end Networth of Rs 18254 crs…You could take the average Networth as the Denominator but the implications would remain the same…..With a near 10% decline in Earnings forecast for FY 10,the RONW will drop sharply to below 23%…In fact to maintain it’s RONW at last years levels Infosys has to register a 40% jump in Earnings !

So with no incremental Earnings and a reducing RONW will Infosys increase it’s Dividend Payout ?…In FY 09 it gave a 470% dividend…That’s Rs 23.50/share…that’s a payout of 22.5% on a Basic EPS of Rs 104.60…It’s Surplus Cash is earning just 8% to 9% pa…If the IT Business fails to generate incremental earnings and if the recovery is only in the Long Term,Infosys should reconsider to increase the Dividend payout…or,just a thought,look to diversify in another growth business…Jerry Rao of Mphasis has done this…he is also now in the Affordable Housing Sector….Infosys can extend it’s superior management capability to build yet another Business from Scratch ! read more

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