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VALUE OCTAGON image, Profitability: improved by 2-5%. Combined effect of…

- - - - REVENUE GROWTH: from $12.8 billion in FY2019 to $16.0 billion in FY2023 (Particularly due to digital transformation)
      - EBITDA MARGINS: Remained stable at 25%-26%. Indication consistent focus :
      - ROCE: Increased from 31% in 2019 to 38% in 2023demonstrating efficient capital allocation :check:
      - Economic Value added:Since WACC is consistant at 0.85 throught the five years, the major impact is due to change in NOPAT: 11,285 IN 2019 to 17,441 in 2023 :check:
        
        Therefore increasing value added from 9466 in 2019 to 15688 in 2023 :star:
  - - - Reduce staffing costs compared to higher-cost regions like the US or Western Europe
        
        Improves Profitability
        
        RESIDUAL INCOME: Increase in Net Income due to reduced costs improves the Residual Income from 13,570 to 22,354
  - - - Immediate boost in top-line growth
        
        Short-term dip: Integration costs, restructuring expenses :!!:
        
        Long-term benefits: Synergies from combined operations, cost optimization :check:
- - - - boost Infosys' stock price by 5% :check:
      - increase customer satisfaction by 8%. :smiley:
  - - - Negative impact on value creation
        
        RESIDUAL INCOME: Reducing excess returns above the cost of capital of 0.8475 :red_flag:
        
        ECONOMIC VALUE ADDED: potentially decreasing if lower retained earnings such as a decrease in Capital employed by 10% from 2019 to 2023 reduce future growth potential despite higher current dividends. :question:
        
        FUTURE GROWTH VALUE: Approach is only in 2023, so therefore the Future growth value reduces from 9,56,904.01
        in FY 2024 :warning:
  - - - HIGHER VALUATION OF MARKET MULTIPLES
        
        P/E RATIO: Upward trend from 21.23 in 2019 to 35.98 in 2022 :check:
        
        EV/TOTAL ASSETS: Increased from 3.45 in 2019 to 6.51 due to increased investment in Assets :check: :check:
- - - - REVENUE GROWTH: Increased by 5-10% as mentioned in a study by McKinsey
      - COST REDUCTION: Reduced by 3-8% as compared to a study mentioning that companies saved an average of 13% on project costs
- - - - Increased EVA to 15,688.32 in FY 2023 due to Increase in NOPAT from 11,285 in 2019 to 17,441 in 2023 :star:
      - ROI: Return on Investment may potentially increase by comparing it to the cost savings :check:
  - - - Favorable Pricing:
      - Streamlined Processes
        
        Improved operational efficiency
        
        Residual Income: Rose up due to a positive impact on the numerator (Net income) from 15,410 to 24,108 in 2023 :check:
        
        Freeing up resources
        
        Economic Value added improved due to a decrease in capital employed by upto 7.26% (freeing up) :star:
  - - - HIGHER TOTAL SHAREHOLDER RETURN (TSR)
        
        PROFITABILITY
        
        Return on net assets: Reducing operational costs and expenses lowers the denominator of the ratio thereby leading to higher ratio. Increased from 32.24% in 2019 to 41.31% in 2022 dur to reduced net working capital. :star:
        
        Return on capital employed:By optimizing resource utilization and reducing waste, ratio improved due to increased Capital employed. Rose to 38.79% in 2023 from 31.83% :check:
        
        INCREASED MARKET CAPITALIZATION
        
        Increased market cap from 2183.52 in 2019 to 8214.52 in FY 2023 increased the TSR ratio from -5% in FY 2019 to 28% in FY 2023 :star:
- - - - Reduced Penalties and Fines
      - Enhanced Brand reputation :
      - Increased Investor Confidence
  - - - Increased Total Shareholder Return: due to a boost in the share price. From FY 2019: -5% to FY 2023: 28% :star:
      - Increase in the P/E ratio due to a boost in the share price from 743 rupees in 2019 to 1,427 in 2023 :check:
- - - - DEBT-TO-EQUITY: Lower debt-to-equity ratio in the following year from 24.176 in 2023 :check:
      - Increased RETURN ON EQUITY: From 31.81% due to improved returns :check:
  - - - Premium Pricing: Specialized services commanding higher pricing
        
        Increased Profitability by 15% more :check:
        
        Increased NOPAT due to cross-selling revenue by 8% :check:
    - - NOPAT: Increased in 2020 (12,580) and 2021 (14,167) from 11,285 in 2019 :check:
      - EVA: Increased due to increase in NOPAT by 5% :check:
      - EBITDA: Improved by 6.21% :check:
      - RESIDUAL INCOME: Increased since net Income increased from the combined operations from 15410 to 19423 in 2021 :check:
  - - - Increased RONA: from 33.95% in 2021 to 41.31% in 2022 :check:
      - Increased ROCE: Due to operational efficiency from 31.83% in 2019 to 38.795 in 2023 :check:
- - - - Increased Total Shareholder Return due to a hike in the share prices :star: