Infosys buyback, dividend: Nomura sees Rs 55 payout, 100% FCF return; target price
Infosys has a capital allocation policy that states returning 85 per cent FCF to its shareholders in a block of five years for the FY25-29 period.
- Sep 12, 2025,
- Updated Sep 12, 2025 9:10 AM IST
Nomura India in a fresh note on Friday said it expects the second largest IT major to return over 100 per cent of the estimated FY26 free cash flow (FCF) to shareholders. This comes after the Infosys biard approved a shares buyback worth Rs 18,000 crore at Rs 1,800 per share, indicating an 19 per cent premium to the closing price as of September 11, 2025. The shares, proposed to be bought back, form 2.41 per cent of the outstanding equity. Nomura said Infosys share buyback was in line with stated capital returns policy.
Infosys has a capital allocation policy that states returning 85 per cent FCF to its shareholders in a block of five years for the FY25-29 period. In FY25, Infosys had returned 52 per cent of its FCF to shareholders through dividends.
With the fresh announced share buyback and Nomura's expected dividend of Rs 55 per share, the foreign brokerage estimated Infosys to return greater than 100 per cent of its FY26F FCF to shareholders.
"We estimate the buyback to be largely EPS-neutral in FY26F. Recall, Infosys had noted that it expects dividends to increase progressively every year (in FY25 it had paid a dividend of Rs 43 per share)," Nomura noted.
The Infosys share buyback is subject to shareholders’ approval. Given the changes to buyback rules in India, unlike the last buyback, the current one would be tender-based.
nomura expects Infosys to post 3.8 per cent YoY dollar revenue growth in FY26F, including 40 basis points from acquisitions. The forecast does not include the recently announced Versent deal.
"We retain Buy and our target of Rs 1,880 (set at 25x FY27F EPS). The stock is currently trading at 20 times FY27F EPS of Rs 75.20 and offers an attractive dividend yield of 4.4 per cent (on FY27F basis). Infosys and Cognizant are our top picks in the large-cap India IT space," Nomura said.
Infosys last conducted a share buyback between December 2022 and February 2023 at Rs 1,539.06 per share, amounting to Rs 9,299.98 crore, according to AceEquity. In that round, the company repurchased a total of 6,04,26,348 shares.
The previous buyback, announced in October 2021, was carried out through the open market route. It was sized at Rs 9,200 crore, with a ceiling price of Rs 1,750 per share. Infosys repurchased 5,58,07,337 shares in that programme at an average price of Rs 1,648.53 per share.
Nomura India in a fresh note on Friday said it expects the second largest IT major to return over 100 per cent of the estimated FY26 free cash flow (FCF) to shareholders. This comes after the Infosys biard approved a shares buyback worth Rs 18,000 crore at Rs 1,800 per share, indicating an 19 per cent premium to the closing price as of September 11, 2025. The shares, proposed to be bought back, form 2.41 per cent of the outstanding equity. Nomura said Infosys share buyback was in line with stated capital returns policy.
Infosys has a capital allocation policy that states returning 85 per cent FCF to its shareholders in a block of five years for the FY25-29 period. In FY25, Infosys had returned 52 per cent of its FCF to shareholders through dividends.
With the fresh announced share buyback and Nomura's expected dividend of Rs 55 per share, the foreign brokerage estimated Infosys to return greater than 100 per cent of its FY26F FCF to shareholders.
"We estimate the buyback to be largely EPS-neutral in FY26F. Recall, Infosys had noted that it expects dividends to increase progressively every year (in FY25 it had paid a dividend of Rs 43 per share)," Nomura noted.
The Infosys share buyback is subject to shareholders’ approval. Given the changes to buyback rules in India, unlike the last buyback, the current one would be tender-based.
nomura expects Infosys to post 3.8 per cent YoY dollar revenue growth in FY26F, including 40 basis points from acquisitions. The forecast does not include the recently announced Versent deal.
"We retain Buy and our target of Rs 1,880 (set at 25x FY27F EPS). The stock is currently trading at 20 times FY27F EPS of Rs 75.20 and offers an attractive dividend yield of 4.4 per cent (on FY27F basis). Infosys and Cognizant are our top picks in the large-cap India IT space," Nomura said.
Infosys last conducted a share buyback between December 2022 and February 2023 at Rs 1,539.06 per share, amounting to Rs 9,299.98 crore, according to AceEquity. In that round, the company repurchased a total of 6,04,26,348 shares.
The previous buyback, announced in October 2021, was carried out through the open market route. It was sized at Rs 9,200 crore, with a ceiling price of Rs 1,750 per share. Infosys repurchased 5,58,07,337 shares in that programme at an average price of Rs 1,648.53 per share.