Infosys hits new high, tumbles

Infosys is having a pretty volatile run on the bourses today. On the BSE, it went on to hit a new 52-week high at Rs.1050 but soon profit booking at these levels, pushed back the stock price to Rs.1036 levels.

The company had some good news to share. It has signed   an agreement with the U.S. Internal Revenue Service (IRS), resulting in an effective tax rate of about 100 basis points lower going forward.

The Advanced Pricing Agreement (APA) (agreement between a taxpayer and the tax authority, where they agree on a method of tax calculation), now concluded following discussions initiated in 2015, is expected to result in reversal of tax provisions of about $225 million made in the previous periods. It will also boost the company's consolidated basic EPS by about $0.10 for quarter ended December 31.

The agreement covers financial years from 2011 to 2021 and the company expects to payout about $233 million over the next few quarters due to difference between taxes payable as per APA and the actual amount paid in the prior periods.

Infosys has stated that APA will enhance predictability of company’s tax obligations in respect to U.S. operations.

The company declares its Q3FY18 performance tomorrow and all eyes will be on the new CEO and what he expects of the company in the coming months.