In 2024, Infosys Limited was the second-largest company in India’s information technology software industry. Its software services offerings were diversified across different sectors, with a large part coming from exports. As required by India’s government, Infosys Limited applied Indian accounting standards in its preparation and presentation of financial statements. A senior analyst with an investment advisory firm in India, was asked to evaluate how the new Indian accounting standard, Ind AS 115, impacted the performance of Infosys Limited and its competitors by reviewing financial performance in recent years and results for the last three quarters of fiscal year 2023–24. Which specific ratios will provide an indication of prudent revenue recognition? What was the impact of Ind AS 115 on Infosys?
This primer accompanies W39421. It is designed to provide essential background information for students, and should be read prior to the case discussion.
Titan Company Limited (Titan), one of the largest companies in the gems and jewellery sector, derived roughly 80 per cent of its revenues from the sale of jewellery. Jewellery buying was discretionary and prices were largely dependent on the price of gold. In India, jewellery sales were also seasonal, with a spike in demand during annual festivities and traditional events like marriages. A research analyst intern has been tasked to analyze Titan’s finances from 2014 to 2022. She had already completed a DuPont analysis, which is presented in the case, and now she must analyze the stock’s return and risk to help investors better understand whether Titan with its heavy dependence on jewellery sales is a wise investment. Interestingly, the analyst discovers that as Titan’s reliance on jewellery sales increased, its overall risk dropped. Students thus have an opportunity to also consider what other factors, such as a strong business model, good financials, and customer-friendly policies, contribute to the risk–return paradigm.
This case discussed the carbon offset credibility challenges Delta Air Lines faced following the filing of a class-action lawsuit in California federal court in May 2023 alleging greenwashing and misleading carbon-neutrality claims. Despite dismissing the lawsuit as one “without legal merit,” Delta had to address customer concerns about its commitment to decarbonization and sustainability and assure the court that the company was taking credible steps away from carbon offsets to more sustainable options toward fulfilling its net-zero carbon emission promise. How can Delta align better with customers’ expectations from net-zero carbon emission promises and be more transparent about its initiatives with all its stakeholders?