Infosys Share Price | IT Stocks: Can Infosys Q2 results and buyback revive the IT stock? Here’s a bit of history
NEW DELHI: As is slated to announce its September quarter results shortly after market hours on Thursday, analysts expect the IT bellwether to lead on the revenue front and maintain guidance for FY23 despite macro uncertainty. The size of the share buyback plan, which is likely to be announced along with the results after the board meeting, is expected to be around Rs 8,000-Rs 10,000 crore.
Along with the rest of the IT stocks, Infosys shares have also been on a downhill in the calendar year 2022 with a loss of about 25% of shareholder wealth.
A study of the stock performance in the last 13 quarters beginning from Q1 of FY 2019-20 shows that Infosys shares have given a negative return seven times on post-result day with losses ranging in between 0.18% to 3.68%.
On at least 3 occasions in January 2020, January 2021 and October 2021, the stock has advanced more than 4% on post-result day.
Infosys results failed to impress investors in the last two quarters as the stock gave negative returns of 0.94% and 2.72% the day after.
Infosys buyback
Infosys has so far announced only 3 buybacks since its listing in June 1993.
In December 2017, Rs 13,000 crore share buyback was done through the tender offer route. 2019’s share repurchase worth Rs 8,260 crore was through the open market route. The last buyback was in 0ctober 2021 which was also through the open market route and sized at Rs 9,200 crore.
Domestic brokerage YES Securities, which expects the buyback to be worth around Rs 8,000 crore to Rs 10,000 crore, said it should limit the downside to stock price in near term as the buyback price is expected to be at significant premium to the current market price.
At the end of the June quarter, the IT major had cash and equivalents worth Rs 13,982 crore lying in its books. Analysts said as the revenue growth outlook has moderated with clients turning cautious, this buyback appears to be the efficient utilization of cash reserves to boost shareholder return.
Infosys has the policy of returning about 85% of its free cash flow to investors through dividends and share buybacks over a five-year period.
expects the buyback can come through an open offer at a price of Rs 1,800 per share.
(With data inputs from Ritesh Presswala)
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