Shares of Infosys climbed nearly 2% in opening trade on Monday, extending gains for the second straight session, after the IT major informed exchanges that it will receive a tax refund of ₹6,329 crore from the income tax department. However, the company also faces a tax demand of ₹2,767 crore, as per assessment orders issued by the I-T department.
Reacting to the news, Infosys shares opened higher at ₹1,521.25, up 1.5% against the previous closing price of ₹1,498.80 on the BSE. In the early trade, the country’s second largest software exporter rose as much as 1.94% to ₹1,528, while the market capitalsiation increased to ₹6.27 lakh crore.
In the last two sessions, Infosys shares have gained nearly 3% after losing over 10% in the previous eight trading days. The IT heavyweight touched its 52-week high of ₹1,731 on February 6, 2024, and a 52-week low of ₹1,215.45 on April 25, 2023. The country’s second most valued IT stock has given a 7% return to its shareholders in the last one year and 5.5% in six months. The counter has fallen 2.5% year-to-date (YTD), while it tumbled over 8.5% in a month.
In an exchange filing on March 30, Infosys said it received orders from the Income Tax Department, Government of India, for assessment years spanning from 2007-08 to 2018-19. “As per the orders the company expects a refund of ₹6,329 crore (including interest). The company is in the process of evaluating the implications of these orders on the financial statements for the quarter and year ending March 31, 2024,” it added.
Besides, the Bengaluru-based company also received assessment order for assessment year 22-23 with a tax demand of ₹2,763 crore (including interest) and under Section 201 & 201 (1A) of the Income Tax Act, 1961 for assessment year 11-12 with a tax demand of ₹4 crore (including interest).
Adding to it, a subsidiary of the company will receive a tax refund of ₹14 crore under Section 254 for assessment years 07-08 and 08-09 and under Section 154 for assessment year 16-17.
“As on March 29, 2024, the above orders cumulatively exceed the materiality criteria as prescribed under Regulation 30 of the Listing Regulations (as amended), and accordingly this disclosure is submitted,” the release noted.
As per the company, it is in the process of evaluating the implications of these orders on the financial statements for the quarter and year ending March 31, 2024 and also evaluating filing appeals against these orders.
The board of Infosys is scheduled to meet on April 18 to approve the financial results for the January-March quarter on April 18. IT bellwether Tata Consultancy Services (TCS) will kick-off March quarter earnings season by releasing its Q4 numbers on April 12.
In Q3 FY24, Infosys posted a 7.3% year-on-year (YoY) fall in net profit at ₹6,106 crore, while it dropped 1.7% sequentially. The consolidated revenue stood at ₹38,821 crore, up 1.3% YoY.
The IT major had trimmed its revenue growth guidance for the full year to 1.5-2%. In the September quarter, it had lowered the guidance to 1-2.5% from 1-3.5%.
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