Buy Infosys Limited (NSE:INFY) When Everyone Panics

Stock market crashes are an opportune time to buy. High quality companies, such as Infosys Limited, are impacted by general market panic and sell-off, but the fundamentals of these companies stay the same. In other words, now is the time to buy strong, well-proven stocks at an attractive discount. Check out our latest analysis for Infosys

Infosys Limited, together with its subsidiaries, provides consulting, technology, and outsourcing services in North America, Europe, India, and internationally. Started in 1981, and headed by CEO Salil Parekh, the company now has 201,691 employees and with the market cap of ₹2.50T, it falls under the large-cap group. Size matters. The bigger the company is, the more well-resourced it is. The more money it produces from its operations which means it is less reliant on external funding. When times are bad in the market, being self-sufficient is extremely important as you can continue to operate at your own pace. Therefore, large cap companies are a great bet to invest in when you're heading to the bottom of the cycle.

With zero debt on its balance sheet, Infosys isn't constrained to debt obligations and covenants, which can be burdensome during financial downturns. Highly-levered companies have to maintain a cash cushion to meet near-term interest payments as well as meet unforeseen circumstances. With no lenders' needs to tend to, Infosys enjoys financial flexibility and independence - an invaluable position to be in during bear markets. Also with a current cash holding of US$3.62B, Infosys's cash position is within a healthy range and more than sufficient to cover other upcoming liabilities, which means INFY is financially robust in the face of a volatile market.

INFY’s profit growth over the previous five years has been positive, with an average annual rate of 5.71%, overtaking the It has also returned an ROE of 25.75% recently, above the industry return of 15.15%. This consistent market outperformance illustrates a robust track record of delivering strong returns over a number of years, increasing my conviction in Infosys as an investment over the long run.

Next Steps:

Whether you're convinced or not, the key takeaway here is that every stock gets hit in a bear market, but not every stock deserves the blow. When prices are dropping like flies, now is the time to do your research and buy at a discount. Infosys tick the boxes in terms of its scale, financial health and proven track record, but there are a few other things I have yet to consider. Below I've compiled a list of factors for you to continue your reading before you buy:

1. Future Outlook: What are well-informed industry analysts predicting for INFY’s future growth? Take a look at our free research report of analyst consensus for INFY’s outlook.
2. Valuation: What is INFY worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether INFY is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.