Infosys hits five-month high on share buyback hope

The stock has outperformed the market by surging 7% after Vishal Sikka took charge of Infosys on August 1

Infosys has moved higher by 2% to Rs 3,590, extending its 5% rally in past two trading sessions on National Stock Exchange (NSE), on reports that the company's former Board members and CFOs recommended an immediate buyback of shares worth Rs 11,200 crore (approx $2 billion) to restore investor confidence in the company's stock.

The stock opened at Rs 3,525 and touched a high of Rs 3,608, its highest level since March 12 this year on NSE. A combined 636,000 shares changed hands on the counter so far on NSE and BSE.

Three former senior employees of Infosys -former chief financial officers T V Mohandas Pai and V Balakrishnan and former senior vice-president D N Prahlad - have written to the company's board to "immediately" consider a buyback of shares, the Business Standard report suggests.

Meanwhile, the stock has outperformed the market by surging 7% after the Former SAP executive Vishal Sikka took charge of Infosys on August 1. The benchmark index CNX Nifty gain 0.11% during the same period.

Analysts at Angel Broking maintains ‘buy’ rating on Infosys stock with a price target of Rs 4,207, as he says Vishal Sikka wants to focus on building on the core values of Infosys to further strengthen the company in the IT sector.

In terms of stock, we believe that the stock is currently trading at an attractive valuation at huge discount to TCS, on back of lower growth, which we believe will catch up in future, the brokerage said in a client note.