Infosys Limited American Depositary Shares (INFY)

FairStock Score: 79/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $3.1 billion in annual free cash flow (6.0% yield on market cap)
• High return on equity of 32.7% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.11, providing financial flexibility
• Altman Z-Score of 6.6 confirms minimal bankruptcy risk and strong solvency
• Superior net profit margin of 428.3% indicating pricing power and operational efficiency

Concerns

• Trades significantly above Graham Number ($6) with negative 105% margin of safety—limited downside protection

AI Analysis

Infosys Limited American Depositary Shares is a large-cap technology company valued at $52.0 billion. The business generates $19.8 billion in annual revenue with a 428.3% net margin and $3.1 billion in free cash flow. From a quality standpoint, Infosys shows solid Piotroski F-Score of 6/9 and Altman Z-Score of 6.6 confirms fortress-level solvency. On valuation, the stock is reasonably priced at 16.8x earnings, with trades far above its Graham Number ($6) with no margin of safety. Growth dynamics show revenue growing at 3.2% and profit growth of -7.1%. The 3.8% dividend yield adds an income component for patient holders. Our composite FairStock Score of 78/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $3.1 billion in annual free cash flow (6.0% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the technology space. Sluggish 3% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer