Mahantesh Sabarad on Infosys results, margins & buyback offer

“An open market buyback is not much beneficial for investors. It is better to wait out the buyback to happen because what it will generally do is keep the price steadier and given that the company’s performance is strong, there is a likelihood that it will continue to rise,” says independent market expert Mahantesh Sabarad.

What is your first take on the Infosys numbers, margin improvement, top down beat as well as the buyback news?
I think the margin improvement is quite good. While the 4% quarter-on-quarter growth in constant currency was good, I would like to look at the year-on-year number at 31.2%. Normally we do not look at the year-on-year number for an IT company but that 31.2% is substantially large and tells us that the revenue numbers for Infosys henceforth will be steadily growing.


What is your take on the buyback? Would you recommend the investors to tender in their shares in the buyback offer, given that the price is at a maximum of Rs 1,850? It is an open market buyback but coming in at quite a premium?
An open market buyback is not much beneficial for investors. It is better to wait out the buyback to happen because what it will generally do is keep the price steadier and given that the company’s performance is strong, there is a likelihood that it will continue to rise. The recent underperformance that we have seen in Infosys relative to its peers will get made up but offering shares in buyback is something I would not advise.