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Vishwanath Kulkarni

THE Economic Value Added (EVA) of Infosys Technologies for the fiscal 2005 shot up by almost 64 per cent, while the value of its human resources grew by 34 per cent. The EVA (which measures the profitability of a company after taking into account the cost of all capital) of Infosys stood at Rs 1,132 crore for 2005 as compared to Rs 690 crore in the previous year.

EVA is the post-tax return on capital employed (adjusted for the tax shield on debt) minus the cost of capital employed. It is considered that companies, which earn higher returns than the cost of capital, create value. Companies, which earn lower returns than the cost of capital, are deemed destroyers of shareholder value. EVA, as a percentage of the average capital employed for Infosys, stood at 26.14 per cent in 2005 as against 22.07 per cent in the previous year.

However, the growth in the value of human resources for the company slowed down to 34 per cent in 2005. In fiscal 2004, Infosys' human resource value had grown almost 100 per cent over the previous year. In fiscal 2005, the company's HR value of 36,750 employees, including both delivery and support staff, stood at Rs 28,344 crore as compared to Rs 21,140 crore in 2004, when it had an employee base of 25,564.

The Lev and Schwartz model has been used to compute the value of human resources, the company said in its latest annual report filed with the US Securities and Exchange Commission.

Infosys, which is in a people-oriented business, reported a substantial jump in the education index of its employees for 2005 at 1,00,351, up from 74,057 in the previous year.

The average age of Infoscians stood at 26 years in FY05, the same as in the previous years.

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