Infosys buyback history, stock reaction today, implications for investors

Infosys shares rose after it said that its board will consider a share buyback proposal at its meeting on September 11, 2025.

Infosys shares gained nearly 4 per cent and will continue to remain in focus going ahead as India's second-largest software services provider is set to consider a stock buyback, a fifth such in its history, if approved.

 

Infosys said its board will consider a share buyback proposal at its meeting on September 11, 2025. The outcome will be disclosed to stock exchanges after the meeting. 

 

The IT bellwether last conducted a share buyback in December 2022, repurchasing over 50 million shares through the open market. In June 2021, it bought back more than 52 million shares. Earlier, the company carried a buyback in 2019 for over 103 million shares, and another in 2017 involving more than 113 million shares. 

 

 

The IT major is considering a buyback when its shares have tumbled 28 per cent from its peak and is down 24 per cent so far this year. The broader IT index gauge is down over19 per cent, the worst-performing major sector this year. 

 

The underperformance in the stock price might be attributed to headwinds from US tariffs, geopolitical tensions and modest earnings growth. Foreign Portfolio Investors have mainly been the sellers of the IT pack as their assets under custody (AUC) in the sector saw a 27.2 per cent decline from 2024 year end to July 2025.  

 

This buyback decision is a surprise, as there is no longer a tax advantage, analysts said. Earlier, investors enjoyed a concessional 20 per cent tax, but now they must pay as per their income slab, which reduces the appeal of buybacks. 

 

"The decision also signals that the company does not have immediate plans for large expansions or acquisitions. With nearly ₹40,000 crore in cash, they have chosen to reward shareholders instead of pursuing major acquisitions or capacity expansion," G Chokkalingam, founder and chief investment officer at Equinomics Research, said.

 

One positive takeaway for the buyback and the stock taking a hit is that analysts see relative valuations as comforting. Infosys shares trade at a forward price to earnings (P/E) of 20.8 times, compared to its five-year average of 24.8x. Meanwhile, the Nifty IT index trades at 23.7x PE, with the benchmark Nifty50 trading at 22.4x. 

 

Given that valuations are below five-year averages and lower than peers, the buyback may also be driven by attractive entry levels for promoters, Chokkalingam said.

 

Analysts at Morgan Stanley said that the timing of the announcement of a board meeting to consider a buyback is "interesting" and they see it as a "signal of stability", according to a Bloomberg report. The global brokerage expects the potential buyback size to be 1.3 per cent to 2 per cent of total equity. 

 

The last buyback announcement and completion have been well over 12 months for Tata Consultancy Services and Wipro, which makes them potential candidates to announce share buybacks, Morgan Stanley said.  

Infosys Q1 recap

In the June quarter, net profit for the company came in at ₹6,921 crore, marking a sequential decline of 1.6 per cent. The top line grew 3.3 per cent on a quarter-on-quarter (Q-o-Q) to ₹42,279 crore. Both the numbers beat analysts' estimates. The firm also raised the lower end of its guidance to 1 per cent from nil growth it had guided a quarter earlier. 

 

From an earnings perspective, there is no change in outlook. Growth is still expected at 2-4 per cent in dollar revenue year-on-year (Y-o-Y), Chokkalingam noted. "So, this buyback may be aimed at improving return ratios and rewarding investors."

Infosys share price 

The lender's stock rose as much as 3.64 per cent during the day to ₹1,485 per share, the steepest intraday rise since August 20 this year. The stock pared gains to trade 3.4 per cent higher at ₹1,484.2 apiece, compared to a 0.33 per cent advance in Nifty 50 as of 9:48 AM. Shares of the company rose for the second straight day and currently trade at 3.3 times the average 30-day trading volume, according to Bloomberg. 

 

The brokerder IT index also gained, with Wipro shares rising as much as 2.7 per cent, Tata Consultancy Services up 1.2 per cent and Tech Mahindra up over 2 per cent. The Nifty IT index rose as much as 2.34 per cent.