Infosys in March 2000 was still a very good company but at a bad price
Year
Price
E.P.S
P.E
Market Cap
March 1998
110
3.67
30
3,180
March 2000
3482
11.60
300
93,836
Change (times)
31.65
3.16
10
31.6
March 2000
3482
11.60
300
93,836
March 2005
2282
65
35.1
61,500
Change (percent)
65.53%
+5.60
00.12
65.53%
Between 1998 and 2000 Infosys experienced a PE expansion of 10 times and an EPS expansion of 3.16 times. This sent the stock 31.6 times higher. SInce the 100% growth rate could not be sustained the stock's PE was butchured from 300 times to 35 times in the next 5 years. Even while the EPS rose by more 5 times the stock price failed to take out its previous high and actually fell even while the earnings per share went up more then 5 times.
