IT major Infosys which has paid 620% dividend in FY22 is likely to surprise investors on October 13. should you buy

IT major Infosys which has paid 620% dividend in FY22 is likely to surprise investors on October 13. should you buy

During the first quarter, Infosys reported a 3.2% growth in consolidated net profit to ₹5,360 crore, while revenue from operations grew by 23.6% to ₹34,470 crore.

• Infosys is paying massive dividend to its investors and most likely it will announce its first interim dividend for FY23 next week. The IT major will also announce its September 2022 quarter earnings.

Dividend is a form of incentive given by a listed company to the shareholders out of profits earned in a particular financial year. Infosys is said to be paying a massive dividend to its investors and most likely will announce its first interim dividend next week for FY23. The IT major will also announce its September 2022 quarter earnings. In FY22 alone, Infosys had paid a whopping 620% dividend to the shareholders.

On BSE, Infosys shares closed at ₹1,451.75, down ₹3.20 or 0.22%. The company's market cap is around ₹6,10,871.36 crores.

Last month, in its regulatory filing, Infosys said, "The financial results and proposal for interim dividend, if any, will be submitted to the board of directors on October 13, 2022 for their approval."

The company's board will meet on October 12 and 13 to approve the financial results in Ind-AS for the quarter and half year ended September 30, 2022. Also, the board will first consider the interim dividend for FY23.

For the financial year FY22, Infosys paid 620% equity dividend to its shareholders at ₹31 per share. For this financial year, the first interim dividend of ₹15 per share was announced on October 13, 2021, while the final dividend of ₹16 per share was announced on April 13, 2022.

At the current market price, Infosys' dividend yield stands at over 2.1%.

Should you buy Infosys shares?

In their Technology Q2 Preview Report, Motilal Oswal's Mukul Garg and Raj Prakash Bhanushali Research analysts expect good demand with good deal conversion from Infosys. In stablecoin terms, analysts expect the company to deliver USD revenue growth of 4.3% QoQ, although unfavorable cross-currency movements will drag down the reported growth.

However, analysts expect lower-than-expected margins as supply-side challenges remain high. Also, commentary on deal wins and margins will be an important watchdog for Infosys.

Analysts at Motilal Oswal has a buy call on Infosys with a target price of Rs 1,640.

Meanwhile, Jefferies said in its Q2 preview report on Infosys, "We expect 2QFY23 revenue growth to be strong at 4% QoQcc, driven by deal ramp-up and seasonal strength. We expect Ebit margins to be 30bps." Will expand by QoQ, driven by pyramiding, operating leverage amid supply side pressures, higher costs and continued investment in growth, and pricing leverage. We expect Infosys to deliver on its 14-16% revenue growth guidance and 21- 23% margin guidance.

Jefferies has a buy on Infosys with a target price of ₹ 1,700.

In Q1FY23, Infosys delivered a strong performance in Q1 with year-on-year growth of 21.4% and 5.5% sequential growth in constant currency. Year-over-year growth was in double digits across all business segments in constant currency terms. Digital accounts for 61.0% of total revenue, growing at 37.5% in constant currency. Net hiring was strong at 21,171. Operating margin for the quarter was 20.1%, with free cash flow conversion accounting for 95.2% of net profit.

During the first quarter, Infosys reported a 3.2% growth in consolidated net profit to ₹5,360 crore, while revenue from operations grew by 23.6% to ₹34,470 crore.