Infosys Will Pay 25% More For Each Share Buyback Even As Profits Down By 2.6%

Infosys  reported on 14th April 2021 that it posted a 17.47 % year-on-year (YoY) growth in net profit at Rs 5,076 crore for the March quarter of financial year 2020-21 (Q4FY21) as against Rs 4,321 crore posted in the same period last fiscal.

Profits Down

Sequentially (on a quarter-on-quarter basis), however, the figure dipped by 2.32 % from Rs   5,197 crore posted in the December quarter of FY21.

The revenue for the quarter under review- Jan 2021- March 2021, meanwhile, stood at Rs 26,311 crore, up 13.08 % YoY and 1.5 %  quarter-on-quarter.

The same figure stood at Rs 23,267 crore in January 2020- March 2020 and Rs 25,927 crore in October 2020- December 2020. 

However, the revenues for the quarter were slightly lower than analysts’ expectation of Rs 26701.8 crores.The revenues in CC (constant currency) terms grew by 9.6 % YoY and 2.0 % QoQ. 

Concerning Figures

Operating margin for the year expanded by 3.2%, though it slipped 2.3% from the operating   margin of the October- December 2020 quarter, largely due to salary hikes announced by the firm in January 2021.

A matter of concern however could be the higher levels of voluntary attrition which stood at 15.2 % for the March 2021 quarter and which is likely to necessitate another round of salary hikes and promotions for the eligible employees. 

Optimism and Share Buyback Plan

For FY22, Infosys forecasts revenue growth of 12-14 % in constant currency terms while it posted operating margin guidance of 22-24 per cent for the next fiscal year,marking the return of Infosys to double digit growth continuing with the strong business momentum in financial year 2021

Infosys has had a good year in 2020 when it reported winning deals worth $2 bn. This can be attributed to the pandemic driven migration to digital services such as cloud technology. 

.In line with its capital allocation policy, the company board approved share buyback programme worth up to Rs 9,200 crore priced at Rs 1,750 per share, a premium of 25.12 % over the stock’s closing price on the BSE, of Rs 1,398.60 per share, as on Tuesday

Infosys Gives 2nd Salary Hike For 2.4 Lakh Employees In July; Will Hire 25,000+ Freshers; Share Buyback Confirmed, learn more.