Infosys shares jump 5% on revision in FY23 guidance, share buyback

Shares of Infosys climbed 5 per cent in Friday's session after the IT firm came out with a healthy set of September quarter results. The second-largest software exporter increased its lower ends of the FY23 revenue and margin forecasts and okayed a Rs 9,300 crore in share buyback, impressing Dalal Street investors.

By 9.17 am, the scrip had climbed 4.78 per cent to hit a high of Rs 1,487.70 on BSE. 

Mitul Shah, Head of Research at Reliance Securities said Infosys numbers were strong and that margin beat his estimates. He said the management raising FY23 revenue growth guidance range from 14-16 per cent to 15-16 per cent and revising its EBIT margin guidance to 21-22 per cent from 21-23 per cent earlier, are indicating better performance for the IT major in the rest of FY23.

"Considering the industry-leading double-digit revenue growth, rising share of digital business (61 per cent of revenue), likely improvement in EBIT margin levels from current levels, declining attrition rate and record-high new TCV, we maintain our BUY recommendation on the stock," he said.

Read More: Infosys attrition reduces to 27.1%, hiring drops 52.6% in Q2

Infosys reported an 11.10 per cent year-on-year (YoY) rise in consolidated net profit at Rs 6,021 crore in September quarter on a 23.4 per cent YoY jump in net sales to Rs 36,538 crore.  Operating margin for the quarter came in at 21.5 per cent against 20.1 per cent in June quarter and 23.6 per cent per cent in the year-ago quarter.

Sharekhan said Infosys raising the lower-end of revenue guidance was a positive surprise, given the volatile macro environment. It said the share buyback of Rs 9,300 crore was on the expected lines, at 30 per cent premium.

"We believe, Infosys’s decent Q2 numbers coupled with management comforting demand commentary and margin sustenance despite supply-side challenges, allay investor fears in this uncertain global environment, further Buyback would support the stock performance in near term amid market volatility. We have a BUY rating on the stock," it said.