Shares of IT-major Infosys surged nearly 5 per cent to a one-month high on Friday after it announced an 11.1 per cent jump in September quarter (Q2) net profit and announced a Rs 9,300 crore share buyback.
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The Bengaluru-based IT company also announced an interim dividend of Rs 16.5 per share. Additionally, it raised its FY23 revenue growth guidance to 15-16 per cent, pushing the forecast towards the higher end of the previously-projected 14-16 per cent band, buoyed by “strong large deals pipeline” and good demand momentum despite global macroeconomic concerns.
During the morning deals on Friday, the Infosys stock surged 4.95 per cent to Rs 1,490 apiece on the BSE while on the National Stock Exchange (NSE) it rallied 4.94 per cent to Rs 1,490.
The company’s revenue from operations stood at Rs 36,538 crore, clocking a 23.4 per cent growth over Rs 29,602 crore in the Q2FY22.
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Infosys has set the maximum buyback price at Rs 1,850, a premium of 30 per cent over the last closing price. The buyback will be carried through the open market route. Also, the company has allowed American Depositary Shares to convert their ADS into equity shares and subsequently can sell such shares on the Indian exchanges during the buyback period. Under the proposed buyback, the maximum number of shares to be bought back would be 50,270,270 equity shares.
Motilal Oswal Financial Services in their research report on Friday gave a “Buy” rating on the stock with a target price of Rs 1,630.
“We have kept our FY23/FY24 EPS estimate broadly flat after the 2QFY23 result and view Infosys as a beneficiary of an acceleration in IT spends, given its capabilities around Cloud and Digital transformation. We value the stock at 25x FY24E EPS and reiterate our Buy rating,” the report said.
