| Not many people are interested in this Nadaq listed ADR because it trades at more than a 50% premium over the Bombay price of the corresponding shares. (If you buy the stock on the Bombay stock exchange, when you sell it you won't be allowed to convert the proceeds into dollars.) Also, software companies are not taxed in India and sooner or later that must change. So seeing that the price is unreasonably high and the earnings also, why touch the stock? Because it may grow to be the largest software house in the world. They are the leading such company in India. The price advantage of using them is about 8 to 1, I estimate. It's scary if you are running such a company in the industrialized world, trying to compete with them. As communication gets more ample(visual images in a conference call, for example), their advantage will increase. Annually, for every 60 applicants INFY hires just one. They get, naturally, top people. Their salaries, equal to about $500 per month, are high by Indian standards. A negative for the stock is the backwardness of India, which may somehow grievously harm them in the end. I don't want to elaborate fancifully but if you have lived in a poor country you will know what I mean. Most stocks that are high risk are also low reward in my experience. This one looks like the genuine high risk high reward stock, by which I mean that the possibilities range here from losing 90% of your money to octupling it in a decade. |
