Infosys PE Ratio

Infosys P/E Ratio Overview   

Infosys LTD is an Indian information technology firm. The company has offered consulting, technology, outsourcing, and next-generation digital services. Infosys PE ratio shows how willing the investors are to invest in the company. By understanding the previous Infosys historical pe ratio, investors will be in a position to know whether the company is overvalued, underpriced or fairly rated. 

Calculation of P/E Ratio of Infosys 

P/E of Infosys Ltd. is determined by dividing the existing price of the stock by the earnings per share (EPS). 

P/E Ratio = Market Value of Shares per Share/ Earnings per Share (EPS).  

This is calculated by coming up with the number of funds that the investors would be happy to give on each rupee of Infosys earnings and this will be compared with valuing of the company in share market. 

How does Infosys P/E Ratio benchmark against competitors? 

By comparing Infosys PE ratio to the industry and its own, the investors can know whether their stock is over-traded or under-traded. In case PE of Infosys is superior to that of other competitors, then this may lead to the stock being priced above the earnings. This indicates great growth prospects or investor confidence. On the other hand, low PE ratio Infosys indicates that the market is underpricing the stock or the market is anticipating a slower growth. Such comparison gives a clear understanding of how the company is valued in the IT industry as compared to other firms. 

P/E Ratio Performance Analysis for Infosys 

Key insights from Infosys historical PE ratio performance can be summarised as follows: 

1. Historical Trend: The PE ratio of Infosys has not been constant, as it has changed with time. This indicates that earnings, market sentiment, and the general performance of the IT sector changed.  
2. Sector Comparison: The PE of Infosys compared to other IT firms indicates whether the firm is trading at a premium or discount.  
3. Investor Sentiment: Market expectations of increases in revenues, profitability, and inflows of orders affect the P/E ratio.  
4. Market Price Movement: The P/E ratio can be affected by major changes in the price of stocks without any subsequent changes in earnings. 

Factors Affecting P/E Ratio of Infosys 

The key factors that influence the Infosys PE ratio include: 

1. Earnings Performance: The performance of the earnings per share (EPS) either decreases or increases the P/E ratio directly. 
2.  Stock Price: P/E calculation is affected by the current market price through stock perception, demand and liquidity.  
3. Industry Trends: The expectations of the investors may be influenced by the growth of the IT industries, demand, and acceptance of technology by the customers.  
4. Economic Conditions: Economic factors like inflation, exchange rate fluctuations and interest rates have an impact on valuations.  
5. Investor Sentiment: PE ratio can vary depending on the confidence of the investors in the market, the trends of IT outsourcing all over the world, and analysts recommendations. 
6. Company Updates: PE changes can be the results of earnings guidance, the acquisition of large clients, or even strategic plans.