Infosys to consider share buyback on April 14, announce FY21 results

At the end of the Q3 FY21 Infosys had cash and investment of $4.5 billion.

Information technology (IT) services major Infosys, in a listing to the BSE, said its board would consider a proposal for buyback of fully paid-up equity shares of the company.

The board is set to meet on April 14. This will be the third buyback of shares by the company.

“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 April 14, in accordance with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018,” the statement said.

The IT services giant is also slated to hold a board meeting on April 13 and 14, to approve of and take on record the consolidated financial results of the company for the quarter and year ended March 31, 2021.

Indian IT majors will be announcing their fourth quarter (Q4) and 2020-21 results starting April 12.

At the end of the Q3 FY21 Infosys had cash and investment of $4.5 billion.

The cash and investments continued to be strong despite paying $687 mn of half yearly dividend during this period, the company said in its quarterly report.

Infosys had announced buybacks twice.

In 2017, the company's first buyback had returned shareholders Rs 13,000 crore at Rs 1,150 per share.

And in 2019, the company had announced buyback of shares, costing the company Rs 8260 crore at price not exceeding Rs 800 per share.

The Q4 results of IT firms are expected to be among the strongest the industry has seen in the past few quarters, said analysts.

Growth for the quarter will be driven by acceleration in digital technologies, improved demand in the aftermath of Covid, ramp-up of deal wins, and migration to Cloud.

With improvement in sectors such as banking, financial services and insurance, as well as retail, manufacturing, and health care, analysts peg Q4 revenue growth at 2-5 per cent on a sequential basis, with many confident that year-on-year growth will be in double digits.

Though Tata Consultancy Services will be the first to announce its numbers on April 12, the Street will look at Infosys’ guidance for demand trends in 2021-22 (FY22).

According to an Edelweiss Research report, Infosys may give a guidance of 13-15 per cent growth for FY22. “Infosys will be a key beneficiary of core transformation, accelerated Cloud adoption, and digital adoption.

"Further, persistent market share loss of key players, such as Capgemini and Cognizant, will directly benefit Infosys.

"We believe the company will give revenue growth guidance of 13-15 per cent for FY22.

"We also expect Infosys to post a 50-basis-point decline in margins quarter-on-quarter, owing to wage hikes,” said Sandip Agarwal of Edelweiss Research in his report.

The company’s stock reached its 52-week high of Rs 1,454 on Friday. Shares closed at Rs 1,439.8 apiece on April 9.

Photograph: PTI Photo