Will Infosys loosen purse strings to reward shareholders?

Infosys, India's second largest software services provider, is sitting on a cash pile of Rs 22,000 crore and reports suggest the company could be more open to returning some of the cash back to its shareholders now.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead Realasset
moneycontrol.com

Home » News » Business

Mar 14, 2013, 10.13 PM | Source: Moneycontrol.com

Will Infosys loosen purse strings to reward shareholders?

Infosys, India's second largest software services provider, is sitting on a cash pile of Rs 22,000 crore and reports suggest the company could be more open to returning some of the cash back to its shareholders now.

Like this story, share it with millions of investors on M3

Will Infosys loosen purse strings to reward shareholders?

Infosys, India's second largest software services provider, is sitting on a cash pile of Rs 22,000 crore and reports suggest the company could be more open to returning some of the cash back to its shareholders now.

Post Your Comments

Share Cancel

Infosys , India's second largest software services provider, is sitting on a cash pile of Rs 22,000 crore and reports suggest the company could be more open to returning some of the cash back to its shareholders now.

The company has typically been conservative when it comes to dipping into its reserves. It acquired Swiss enterprise software consultancy Lodestone Holding in 2012 for Rs 1,925 crore and would usually rather wait for an acquisition to come by, or just hold cash at a time the global economic environment remains uncertain.

But are things likely to change? A report by The Economic Times quotes CEO SD Shibulal as saying "he would never say never to a share buyback."

However, in a recent interaction with CNBC-TV18, he remained cautious over spending and investment by clients in the near-term.

"We continue to see clients are taking a longer time for decision making...their ability to long-term investments are low," Shibulal said.

The India's second largest software services exporter, surprised the street last month with better-than-expected results for the third quarter and also raised its full year guidance, contrary to most analysts who were expecting a cut.

The company has also indicated that it would like to maintain EBIT margins in the mid-20 percent range, which analysts have said is realistic.

Infosys is likely "turning the corner" with a revival in its bread-and-butter business last quarter, flexibility in deals, improving win rates, embracing a more realistic margin profile and attempting to re-engage with employees, JP Morgan analysts Viju George and Amit Sharma said last month.

Once the bellwether, Infosys has been a laggard over the last couple of years, as slowdown in decision making and cut in spends by clients, hurt. But the company has now become more aggressive, and is also more flexible on pricing, analysts have pointed out, to gain back business.

The company will announce its fourth quarter results next month. The shareholders would be keen on getting a bigger slice of the cash pile.  

Infosys shares were slightly up at Rs 2,864.15 on NSE. The stock has gained over 23 percent since end of Dec.

Infosys stock price

On May 27, 2016, Infosys closed at Rs 1246.40, up Rs 14.75, or 1.20 percent. The 52-week high of the share was Rs 1267.90 and the 52-week low was Rs 932.55.


The company's trailing 12-month (TTM) EPS was at Rs 68.72 per share as per the quarter ended March 2016. The stock's price-to-earnings (P/E) ratio was 18.14. The latest book value of the company is Rs 209.27 per share. At current value, the price-to-book value of the company is 5.96.

Ads by Google

Buy, Hold, Sell ? Hear it first on M3
Will Infosys loosen purse strings to reward shareholders?

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login