Infosys EVA, which measures the profitability of the company after taking into account the cost of all capital, grew by 56% over the previous year
Infosys Technologies Ltd said its economic value added (EVA) grew 55.9 per cent in fiscal 2009 over the previous year, but reported only a marginal increase in its brand value and value of its human resources.
The company's EVA increased to Rs 3,563 crore (Rs 2,286 crore), it said in its 2008-09 annual report. The EVA measures the profitability of the company after taking into account the cost of all capital. EVA is the post-tax return on capital employed (adjusted for the tax shield on debt) minus the cost of capital employed.
Infosys' brand value grew 1.5 per cent to Rs 32,345 crore (Rs 31,863 crore). The market capitalisation decreased to Rs 75,837 crore in FY09 from Rs 82,362 in the previous year. Brand value as a percentage of market capitalisation was 42.7 per cent during the fiscal compared with 38.7 per cent in the previous fiscal, the company added. Using the brand earnings-multiple model, which finds a mention in "Valuation of Trademarks and Brand Names" by Michael Birkin in "Brand Valuation", Infosys based its brand valuation on the following assumptions, among others the total revenues excluding other income after adjusting the cost of earnings, the annual inflation at 8.4 per cent and 5 per cent of the average capital employed used for purposes other than promotion of the brand and a tax rate of 33.99 per cent.
Source: The Hindu Business Line
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