Project Report on Financial Analysis of It Services Sector

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PROJECT REPORT ON FINANCIAL ANALYSIS OF IT SERVICES SECTOR

(SONATA vs INFOSYS)

Under the Guidance of:
Dr. Sandeep Goel

13/09/2010
Group-9, PGPM-2010 Sec-A

Nipun Goel(10P035)
Atul Bucha(10P013)
Manu Kulkarni(10P028)
Vaibhav Goyal(10P058)
Harsh Maru(10P018)
Dheeraj Nagpal(10P015)

ACKNOWLEDGEMENT
We wish to express our sincere gratitude to Dr.Sandeep Goel for providing us an opportunity to do our project work on “FINANCIAL ANALYSIS OF IT SERVICES SECTOR (INFOSYS vs SONATA)” .This project bears on imprint of many people. We sincerely thank to him as our project guide for guidance and encouragement in carrying out this project work. We wish to avail ourselves of this opportunity, express a sense of gratitude and love to our friends, project mates and our beloved parents for their manual support, strength, and help and for everything 

Place: Gurgaon
Date: 02/13/2010

Table of Contents
THE INDIAN IT SECTOR5
INFOSYS6
Global Delivery Model (GDM)8
Enterprise Risk Management (ERM)8
SONATA9
Opportunities and threats:9
Financial highlights:11
PERFORMANCE SUMMARY13
Infosys Technologies (Analysis of Balance sheet)15
Sources of funds16
Applications of funds16
Analysis of Income Statement18
Earnings before interest and tax (EBIT)19
Sonata Software (Analysis of Balance sheet)20
Sources of funds22
Applications of funds22
Analysis of Income Statement24
Sales25
EBIT25
Net Profit26
Share Price Performance27
RAG STATUS:27
INDIVIDUAL RATIOs:29
Solvency Ratio29
RECEIVABLE TURNOVER30
DAYS OF SALES OUTSTANDING30
FIXED ASSET TURNOVER31
TOTAL ASSET TURNOVER31
CURRENT RATIO32
QUICK RATIO33
CASH RATIO33
DEFENSIVE INTERVAL RATIO34
Financial Leverage Ratio:35
Profitability Ratio:36
Gross Profit Margin36
Operating Profit Margin36
Calculation Templates42
REFERENCES42

THE INDIAN IT SECTOR

The Indian software industry, from its very humble beginnings, has grown tremendously over the past few years and is now the undisputed leader in the outsourcing of software services now. While the rest of the financial world was bogged down by the recent economic recession, most Indian IT companies faced the crisis head on and actually managed to cash in upon it as an opportunity. The uniqueness of the Indian IT industry, and possibly one of the main reasons for its recent upsurge is the fact that it is service oriented and export driven. Apart from these, other factors that have led to this increase in demand for Indian software services include cost efficiency, abundance in qualified software engineers and the fact that it is managed by professional and entrepreneurial managements. IT industry has played a major role in strengthening the economic and technical foundations of India. Indian professionals are setting up examples of their proficiency in IT, in India as well as abroad. India is widely recognized as the premier destination for offshore technology services. According to the NASSCOM Strategic Review 2010, IT services exports (excluding exports relating to business process outsourcing (BPO), hardware, engineering design and product development) from India are estimated to grow by 5.8% in fiscal 2010, to record revenues of US $27.3 billion. This review also estimates BPO exports from India to have grown by 6% in fiscal 2010 to record revenues of US $12.4 billion. There are several key factors contributing to the growth of IT and IT-enabled services (ITES) in India and by Indian companies. Some of these factors are high-quality delivery, significant cost benefits and abundant skilled resources. INFOSYS

Infosys Technologies (Infosys) is a leader in providing IT consulting and software services which include a complete range of services such as business-technology consulting, Internet and e-business consulting, system integration, custom application development, re-engineering and sustenance. The company provides...
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