Infosys buyback announced! Pegged at Rs 9200 cr, price set not to exceed Rs 1750

Infosys, a global leader in next-generation digital services and consulting, delivered strong FY21 performance with 5% CC growth, and growth accelerating to 9.6% in Q4 – in the face of a turbulent economic environment. Large deal TCV for FY21 peaked at an all-time high of $14.1 bn with 66% being net new. While the Operating margin for the year expanded by 3.2%, Free Cash Flows increased by 38.5% for Infosys. The Board has recommended capital return of Rs 15,600 cr (approximately $2.08 bn) including final dividend of Rs 6,400 cr (approximately $0.85 bn) and open market buyback of shares of Rs 9,200 cr (approximately $1.23 bn). Infosys share price today is Rs 1403, down Rs 23 or 1.6%.

Regarding Buyback of Equity Shares, Infosys will do via the open market route through the Indian stock exchanges, amounting to Rs 9,200 cr (Maximum Buyback Size, excluding buyback tax) (approximately $1.23 billion) at a price not exceeding Rs 1,750 per share (Maximum Buyback Price), subject to shareholders' approval in the ensuing AGM.

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Salil Parekh, CEO and MD said that he is very pleased with the performance this year. He said, "Incredibly proud of our employees for the passion and commitment they displayed despite a very tough environment. Infosys have crossed a milestone of Rs 100,000 cr in revenue in FY21. Our intense focus on client relevance, growing our digital portfolio with differentiated capabilities like Infosys CobaltTM, and empowering employees have helped us emerge as a preferred ‘partner-of-choice’ for our global clients. Infosys record large deal wins stand testimony to the effectiveness of this approach."

Infosys Outlook for FY22:

Revenue growth guidance of 12%-14% in constant currency
Operating margin guidance of 22%-24%

In Q4, Infosys continued to expand its digital capabilities, especially with the Infosys CobaltTM cloud portfolio. The company announced a partnership with LivePerson for Conversational AI to help brands manage AI-powered conversations with consumers and employees.  Infosys also built its own applied AI cloud to provide employees simple and fast access to AI infrastructure, expanding their ability to drive AI-driven transformation for enterprises.

For FY 21, the Board has recommended a final dividend of Rs 15 per share. Together with the interim dividend of Rs 12 per share already paid, the total dividend per share for FY 21 will amount to Rs 27 which is a 54% increase over FY 20. With this, the company has announced total dividend of Rs 11,500 cr (approximately $1.53 bn) for FY21.