Shares of IT major firm Infosys soared as much as 1.16% to hit an intra-day high of ₹1,479, a day after the company said in a stock exchange filing that it is considering a proposal for share buyback on October 13. Infosys will announce its June to September quarterly earnings results on October 13.

“We would like to inform you that pursuant to Regulation 29(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR Regulations”), the Board of the Company will consider a proposal for buyback of fully paid-up equity shares of the Company at its meeting to be held on October 13, 2022, in accordance with the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, as amended,” the company said.

“The outcome of the Board meeting will be disseminated to the stock exchanges after the conclusion of the Board meeting on October 13, 2022, in accordance with the applicable provisions of the SEBI LODR Regulations,” it added.

The development comes days after the brokerage firm Jefferies said that the IT major is likely to consider a share buyback option while expecting the buyback to be valued between ₹8,700 crore and ₹9,500 crore. In June last year, the company approved a share buyback worth ₹9,200 crore. Infosys had bought back shares at ₹1,750 apiece.

A share buyback or repurchase is touted as a tax-efficient alternative to return money to the shareholders, where the company buys its own shares from the investors and shareholders.

For the April-June quarter this year, the company’s consolidated net profit grew 3.2% at ₹5,360 crore. The company’s revenue from operations grew 23.6% to ₹34,470 crore, as compared to ₹27,896 crore in the same period last year. Meanwhile, total income, net of other income, registered a 8.7% growth to ₹676 crore during the period. Operating profit increased 4.7% in the quarter to ₹6,914 crore from ₹6,603 crore a year ago. However, the company’s operating margin had declined 3.6% year-on-year, falling to 20.1% from 23.7%.

Salil Parekh, CEO of Infosys, during a post-Q1 results announcement, said, “We had an excellent start to the financial year with 5.5% sequential growth and 21.4% y-o-y growth in constant currency terms. We continue to gain market share with our cloud capabilities and differentiated digital value proposition for our clients. Growth continues to be broad-based across geographies and business segments.”

“With a strong growth in Q1 and our current outlook on demand opportunity and pipeline, we increased our revenue growth guidance, which was at 13-15%, now to 14-16% growth for this year,” he added.

Infosys Share Buyback Option

Infosys to consider share buyback on October 13; stock rises 1%