Infosys on Wednesday said it had approved of a buyback at a share price not exceeding Rs 1,750, aggregating up to Rs 9,200 crore, in the backdrop of robust deal sign-ups in the financial year ended March 2021 (FY21).
In other mega share buybacks among Indian IT services majors in the recent past, Wipro announced a repurchase of up to 23.75 crore shares for a total of up to Rs 9,500 crore, in November last year. The largest of the rivals, Tata Consultancy Services announced a Rs 16,000 crore buyback programme the same month. Wipro had also announced a Rs 10,500 crore buyback package in 2019.
Bengaluru based Infosys reported a record total contract value (TCV) of $2.1 billion in the fourth quarter ended March 2021 (Q4), and $14 billion in FY21. Of the total TCV in FY21, $9.4 billion was a chunk of net new deals.
Net profit in Q4 jumped 17.5%. The company said its net profit rose to Rs 5,076 crore, or Rs 11.94 per share, from Rs 4,321 crore, or Rs 10.18 per share, a year earlier.
The country’s second-largest software services provider, in revenue terms, said it expects annual revenue in FY22 to grow by 12-14% in constant currency terms.
Total revenue in Q4 grew 13% to Rs 26,311 crore, and in FY21 grew 10.7% to Rs 1,00,472 crore.
Operating margin in Q4 grew to 24.5%, from 21.1% a year ago.
Additionally, Infosys recommended a final Rs 15 per share dividend for FY21.
In the fourth quarter, Infosys said it continued to expand its digital capabilities, especially with its Cobalt portfolio of cloud services. “Our intense focus on client relevance, growing our digital portfolio with differentiated capabilities like Infosys Cobalt, and empowering employees have helped us emerge as a preferred ‘partner-of-choice’ for our global clients. Our record large deal wins stand testimony to the effectiveness of this approach,” CEO and MD Salil Parekh said.
The now $13.6 billion Infosys was the only one of India’s four large IT exporters to have grown in the pandemic-affected first quarter ended June 2020, in sequential revenue terms.
“Infosys has managed to navigate through the crisis and has been comparatively more competent among some Indian peers to convert the threat into an opportunity to drive digital growth... As the newer deals require more non-linear modes of engagement with providers, Infosys may need to accelerate its capability towards more agile contracts,” DD Mishra, senior research director at Gartner, told TechCircle in a separate statement.
On the other hand, despite recent salary hikes, voluntary attrition at Infosys’ Q4 grew to 15.2% from 10.0% in Q3. “Attrition has picked up, largely reflecting a strong demand environment, but we remain confident of our employee engagement initiatives, vast talent pool and training capabilities to ensure seamless execution,” COO Pravin Rao said.
The attrition will remain similarly high in the consecutive couple of quarters or so, Rao told analysts in the conference call.