Infosys shares gain nearly 4 per cent on share buyback
New Delhi: Shares of Infosys on Monday rose by nearly 4 per cent after the company approved a Rs 8,260-crore share buyback and also raised its revenue growth forecast.
After a positive opening, shares of the company further gained 3.70 per cent to Rs 709 on BSE. At NSE, shares of the company jumped 3.90 per cent to Rs 710.20.
India’s second largest IT firm Infosys on Friday reported a 30 per cent drop in its December quarter net profit on higher expenses even as it approved a Rs 8,260-crore share buyback — the second in less than 13 months’ time. Its net profit slumped to Rs 3,610 crore in October-December 2018 from Rs 5,129 crore in the same period a year ago, the company said in a statement.
In spite of the drop in quarterly profit, the company raised its revenue growth forecast for the fiscal year ending March 2019 to 8.5-9 per cent in constant currency terms, from 6-8 per cent previously.
Revenue from operations rose 20.3 per cent to Rs 21,400 crore. Infosys said it will buy back 10.32 crore shares, or 2.36 per cent, for no more than Rs 800 per share — 17 per cent higher than the closing price of Rs 683.70 per share on the BSE. Infosys also declared a special dividend of Rs 4 per share.
Sanjeev Hota, AVP Research at Sharekhan by BNP Paribas said, Infosys’ performance surprised positively with strong top-line growth for the quarter, though margin performance missed the mark.
“Increase in revenue guidance and better exit rate for FY19 provides comfort on double digit growth in FY20. Buyback quantum seems to be below than expectation, however, will support the stock performance in medium term,” he added.