Infosys, India’s second-largest IT services firm, reported an 11% increase in consolidated net profit for the September quarter, to Rs 6,021 crore, and announced a Rs 9,300 crore share buyback program.

The Bengaluru-based firm raised its FY23 revenue growth forecast to 15-16%, bringing it closer to the higher end of the previously expected 14-16% band, driven by a “strong big deals pipeline” and robust demand momentum despite global macroeconomic concerns.


In addition, Infosys’ board of directors declared an interim dividend of Rs 16.50 per share. According to the company’s statement, the interim dividend payout will be roughly Rs 6,940 crore. The corporation has fixed the interim dividend record date as October 28 and the distribution date as November 10.

Infosys, which competes for outsourcing contracts with Tata Consultancy Services, Wipro, and HCL Technologies, reported an 11% year-on-year growth in consolidated net profit for the second quarter ended September 2022, totaling Rs 6,021 crore.

Revenue climbed by 23.4 percent year on year to Rs 36,538 crore in the second quarter ending September. According to Infosys CEO and MD Salil Parekh, the company’s second-quarter performance was “broad-based, with all industries and geographies expanding in double digits in constant currency.”

Margins grew by 150 basis points sequentially, helped by “operational discipline,” while supply-side limitations eased significantly, with attrition down to 27.1% from 28.4% in the June quarter.

The company announced a Rs 9,300 crore open market share repurchase at a price of up to Rs 1,850 per equity share. The repurchase price is 30% higher than the stock’s closing price on Thursday of Rs 1,419.7 per share.

Share repurchases are considered a tax-efficient alternative to repaying money to shareholders. This is the fourth buyback announcement by the business since its first public offering in 1993. The Infosys board of directors approved a Rs 9,200 crore share purchase scheme last year, which will commence on June 25, 2021, and end on September 14, 2021.

Tech Companies Q2 Scorecard

The Q2 scorecard of Tier-1 tech companies comes amid a challenging macroeconomic environment in crucial markets such as the United States and Europe, which serve as the backbones of the Indian IT industry. Storm clouds have risen over the global economy, causing economists to voice dire warnings about the possibilities of a recession and global market shocks.

TCS, India’s largest IT services exporter, reported an 8.4% increase in net profit for the September quarter to Rs 10,431 crore, limited by margin declines.

On Wednesday, HCL Technologies announced a 7% increase in consolidated net profit for the September quarter to Rs 3,489 crore, and raised its full-year revenue guidance despite economic concerns, citing strong demand and a deal pipeline.

In the meantime, Wipro Ltd reported a 9.3 percent drop in net profit for the September quarter, owing to higher personnel costs and lower non-US earnings.

In July-September, the company’s profit attributable to equity shareholders was Rs 2,659 crore, 9.27 percent less than the previous year’s profit of Rs 2,930 crore.

According to Jefferies, the buyback is expected to boost Infosys’ stock price in an uncertain macro environment. According to Jefferies, during past buybacks, Infosys shares increased 12-21% from the announcement to the completion of the repurchase, exceeding the Nifty IT on two of three occasions. Furthermore, Infosys’ stock price had reached the maximum buyback price during the prior two buybacks.

The quarter’s large transaction total contract value was robust at USD 2.7 billion, the highest in the prior seven quarters. In constant currency terms, the digital sector accounted for 61.8 percent of total revenues and grew at a 31.2 percent annual rate. The operating margin increased by 140 basis points to 21.5 percent sequentially.

However, the company has cut the top end of its operating margin prediction and now anticipates it to be in the 21-22% range for FY23, rather than the 21-233% originally projected.

While the company has a good pipeline of big deals, Parekh says the company is keeping an eye on the macro environment. Despite regularly monitoring the macro situation and remaining cautious, the corporation is “happy” with its market position.

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