The shares of Infosys jumped more than 2 percent on September 12 after the board of India's second largest IT company approved a share buyback proposal worth Rs 18,000 crore, its largest ever. The shares were trading at Rs 1,539.90 apiece in the early hours of the session, as investors cheered higher than expected share buyback announcement.

In an exchange filing released in the post market hours of September 11, Infosys announced that the share buyback program does not exceed 25 percent of the aggregate paid-up capital and accounts for 2.41 percent of the company. The buyback price has been set at Rs 1,800 per share.

This is the first buyback of shares announced by Infosys since 2022, when the company had agreed to a buyback proposal of Rs 9,300 crore. The record date for the latest buyback programme is yet to be announced.

A share buyback is a programme where a company buys back some of its shares from the existing shareholders. The buyback price of Rs 1,800 apiece is more than 19 percent higher than the stock's previous closing price of Rs 1,509.70 apiece.

In an exchange filing released on September 12, Infosys said that it will receive some exemptive relief from the US SEC as a result of the share buyback due to "conflicting regulatory requirements between Indian and U.S. laws for tender offer buybacks".

The Bengaluru-based IT major had cash and cash equivalents of over Rs 42,000 crore and free cash flow of over Rs 20,000 crore in FY25, giving it ample headroom for shareholder payouts. The buyback will be funded from its free reserves, in line with its capital allocation policy of returning 85 percent of free cash flow over five years through dividends and repurchases.

Infosys shares gained more than 6 percent in the past five days, and over 8 percent in the past one month. The stock has fallen nearly 3 percent in the past six months, and is down more than 18 percent in 2025 so far.

Should you buy, sell or hold?

CLSA kept an 'Outperform' call on the stock, with a target price of Rs 1,861 apiece. This implies an upside potential of more than 23 percent from the stock's previous closing price. The buyback is expected to support stock price during the weak second half of FY26, it said.

Nomura kept a 'Buy' call on the stock, with a target price of Rs 1,880 per share. This implies an upside potential of over 24 percent from the stock's previous closing price. The international brokerage expects the firm's CC revenue to grow 3.8 percent on-year in FY26.

Morgan Stanley kept an 'Equal-weight' call on the stock, with a target price of Rs 1,700 per share. This implies an upside potential of nearly 13 percent from the stock's previous closing price. The international brokerage said that the firm's buyback size was higher than the Rs 10,000–14,000 crore size initially estimated. Amid macro uncertainty around Trump tariffs, Morgan Stanley sees the buyback as a vote of confidence in stability of FY26 guidance.

In the first quarter of the ongoing financial year 2026, Infosys reported an 8.7 percent year-on-year rise in consolidated net profit to Rs 6,921 crore, beating expectations. Revenue for the quarter grew 7.5 percent on-year to Rs 42,279 crore.

Infosys said it expects revenue growth of 1–3 percent in constant currency terms for FY26, revised up from 0-3 percent earlier. The firm maintained its operating margin guidance at 20–22 percent.