Stock Insight: Mission Infynity

For a non-professional investor trying to figure out whether Infosys is a good investment, the biggest psychological challenge is to keep Infosys the company separate from Infosys the stock. The company is the pride of new India symbolising everything that has gone right for this country in the last two decades. The stock, however, perpetually seems to combine the somewhat uncomfortable characteristics of appearing fully priced as well as being volatile. Much of the investment analysis available for the company suffers from being targeted at people who are already experts. For an ordinary investor, it could be useful to have a back-to-the-basics understanding of not just the company, but the business it embodies. The BasicsOver the last two years, any lingering doubt about the efficacy of the offshore software delivery model that companies like Infosys embody has disappeared, especially for large clients. Despite anything else you may hear, this key driver around which this business revolves is cost. As companies in the developed world try to squeeze the most out of each dollar they spent on IT, offshore firms, like Infosys, are simply much cheaper. The key resistance has always been the psychological one of getting high-tech work done by a company from a country historically perceived as low-tech. This is a handicap that Indi

This article was originally published on July 01, 2006.