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Infosys Q1 Profit Increases, Lifts FY Revenue Growth View; Stock Up

Infosys Limited (INFY) reported that its profit attributable to owners of the company for the first-quarter increased to $546 million or $0.13 per share from $534 million or $0.12 per share in the same quarter last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.

In Friday pre-Market trade, INFY is trading at $11.09, up $0.38 or 3.55 percent.

"Continuing our objective of improving shareholder returns, we have revised our capital allocation policy upwards to distribute ~ 85% of free cash flows cumulatively over a 5-year period," said Nilanjan Roy, CFO.

Quarterly revenues grew to $3.13 billion from $2.83 billion in the prior year. Analysts expected revenue of $3.08 billion for the quarter.

The company raised its fiscal year 2020 revenue growth guidance to a range of 8.5 percent - 10 percent in constant currency from the estimation of 7.5 percent - 9.5 percent growth.

The company said its current policy is to pay up to 70% of the free cash flow annually by way of dividend and/or buyback. The Board has approved a revised Capital Allocation Policy of the company after taking into consideration the strategic and operational cash requirements.

Effective from Financial year 2020, the company expects to return about 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback and/or special dividends.

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