Infosys shares in focus as IT firm expects Rs 6,329 crore tax refund

Shares of Infosys Ltd are in focus on Monday after the Bengaluru-based IT major said it expects to receive Rs 6,329 crore in tax refund including interests and that it was evaluating the implications of Income Tax Department orders on the financial statements for the quarter and year ending March 31, 2024. The IT firm will be announcing its March quarter results on April 18.

Infosys said it has also received assessment order under Section 143(3) of the Income Tax Act, 1961 for assessment year 22-23 with a tax demand of Rs 2,763 crore (including interest) and under Section 201 & 201 (1A) of the Income Tax Act, 1961 for assessment year FY11-12 with a tax demand of Rs 4 crore (including interest).

Additionally, the IT firm received assessment orders under Section 143(3) and Section 201 & 201 (1A) of the Income Tax Act, 1961 for assessment years FY21-22 and FY18-19 respectively with total tax demand of Rs 145 crore (including interest. For assessment year FY22-23 it received tax demand of Rs 127 crore including interest.

"The company is in the process of evaluating the implications of these orders on the financial statements for the quarter and year ending March 31, 2024 and also evaluating filing appeals against these orders. Further, a subsidiary of the Company has received refund orders under Section 254 for assessment years 07-08 and 08-09 and under Section 154 for assessment year 16-17. The refund amount as per these orders is Rs 14 crore. The company is in the process of evaluating the implications of these orders on the financial statements for the quarter and year ending March 31, 2024," Infosys said.

Nirmal Bang expects Infosys to report a total contract value (TCV) in the range of $2-3 billion for the March quarter. It believes Infosys to guide for 4-7 per cent CC revenue growth for FY25 with modestly positive demand commentary versus FY24, especially on discretionary spending. It expects investors to watch out for guidance for FY25, the timing and extent of salary hikes in FY25 and the extent of boost from the margin improvement program in FY25.