Infosys Ltd is drawing attention in the market today following its announcement that it anticipates receiving a substantial tax refund amounting to Rs 6,329 crore, inclusive of interests. The Bengaluru-based IT giant disclosed that it is currently assessing the implications of recent Income Tax Department directives on its financial statements for the quarter and fiscal year ending March 31, 2024. Scheduled for April 18, Infosys will unveil its financial results for the March quarter.
In its statement, Infosys revealed receipt of assessment orders under Section 143(3) of the Income Tax Act, 1961, for the assessment year 2022-2023, reflecting a tax demand of Rs 2,763 crore, along with demands under Section 201 & 201(1A) for the assessment year FY11-12, amounting to Rs 4 crore. Additionally, assessment orders were received for FY21-22 and FY18-19, totaling Rs 145 crore in tax demand, including interests. Furthermore, for the assessment year FY22-23, a tax demand of Rs 127 crore, inclusive of interest, was imposed.
The company stated it is currently evaluating the potential impacts of these orders on its financial statements for the period ending March 31, 2024, and contemplating filing appeals against them. Moreover, one of its subsidiaries received refund orders under Section 254 for assessment years 2007-08 and 2008-09, and under Section 154 for the assessment year 2016-17, with a refund amount totaling Rs 14 crore. Infosys emphasized that it is in the process of assessing how these orders will affect its financial statements for the same period.
Analysts at Nirmal Bang anticipate Infosys to report a Total Contract Value (TCV) ranging between $2-3 billion for the March quarter. They project Infosys to guide for a 4-7 percent Constant Currency (CC) revenue growth for FY25, with a cautiously positive outlook on demand compared to FY24, particularly in discretionary spending. Key areas of interest for investors include guidance for FY25, the timing and extent of salary hikes in FY25, and the potential benefits from the margin improvement program in FY25.
