Companies often resort to buybacks either to return cash to shareholders or because they believe their shares are undervalued. Such moves usually send a positive signal, and more often than not, a stock tends to form a base around the buyback price, depending on market conditions.
Interestingly, while insider and promoter selling is a common feature during a bull market, buybacks are typically seen when valuations are depressed, either because the broader market or the stock has corrected, or because company-specific challenges have dragged down the share price.
Similarly, three companies that recently repurchased their shares or announced buybacks are still trading below the buyback price. This comes at a time when promoters have sold shares worth $30 billion in H1FY26, pulling down their stake in listed companies to an eight-quarter low of 49.3% in Q1FY26.
So, what exactly prompted these buybacks? Let’s take a closer look at them.
#1 Gujarat Heavy Chemicals: Buyback at ₹725 Per Share
Gujarat Heavy Chemicals (GHCL) is a well-diversified group with established footprints in the chemicals and consumer products segments. The company is a leading soda ash player focused on India’s growth market and is recognised for its integrated, efficient, and growing operations.
The company manufactures Soda Ash, a key raw material for the detergents and glass industries. GHCL’s current soda ash production capacity stands at 1.2 million tons per year. It is one of the largest manufacturers of Soda Ash in India, with about 26% of the domestic market share. GHCL also manufactures Baking Soda.
In addition, GHCL is a leader in manufacturing and selling consumer products, including edible and industrial-grade salt and jujube honey under the i-Flo and i-Flo Honey brands. Over the last five years, GHCL’s shares have delivered a 269% return, but it still trades at a much lower valuation than the industry group, which may have prompted it to buy back shares.
A Buyback Aligned With GHCL’s Long-Term Positioning
The company has approved a buy‐back of up to 41,37,931 equity shares (4.32% of paid-up equity) at ₹725 per share, for an aggregate amount of up to ₹3 billion. The record date was 14 November 2025; the offer will open on 20 November and close on 26 November 2025. The buyback price is at a 19.4% premium to its current market price of ₹607 (20 November).
The buyback is intended to optimise the capital structure, distribute surplus cash to shareholders, and improve key financial metrics, such as Earnings Per Share (EPS) and Return on Equity (ROE). The company’s ROE currently stands at 18.6%.
A Softer First Half Shaped by Market Pressures
From a financial perspective, GHCL’s revenue declined 6% year-on-year to ₹15.6 billion in the first half of FY26. EBITDA (earnings before interest, tax, depreciation, and amortisation) fell 14% to ₹4.0 billion, with a margin of 26%. Profit after tax declined 17% to ₹2.5 billion in the first half. It generates good cash flow, as evidenced by a cash profit of ₹3.1 billion in H1 FY26.
The company’s performance was impacted by challenging market conditions, exacerbated by rising cheap imports, which negatively impacted realisations. EBITDA margins were also reduced due to lower realisations and slightly higher overhead costs.
An Expansion Phase Set to Redraw the Growth Curve
Looking ahead, GHCL is actively diversifying to unlock a new earnings stream. The company is venturing into Bromine (2,800 MT capacity) and Vacuum Salt (170,000 MT). Both these projects are on track for commissioning in early 2026 (January). The management expects these projects to add around ₹800 million in EBITDA annually, with full benefits coming in FY27.
EBITDA margins are expected to be between 40% and 45%, primarily because these projects are an add-on to the existing soda ash salt production facilities. The company is also setting up a greenfield soda ash plant with a capacity of 1.1 million tons. This expansion comprises two phases of 550,000 tons each, with completion expected by FY30.
#2 Infosys: Buyback at ₹1,800 Per Share
Infosys is the second-largest listed Indian IT services company both by revenue and market capitalisation. It offers a range of digital and traditional IT services to corporates across sectors.
Its digital offerings include emerging areas such as AI-based analytics, cloud migration, the Internet of Things, and cybersecurity. Traditional services include application development and enterprise solutions. It serves clients across sectors like financial services, retail, manufacturing, hi-tech, and energy.
Infosys’s Biggest Ever Buyback
Infosys is buying back 1 million equity shares, representing 2.4% of its paid-up capital, at a price of ₹1,800 per share. The buyback is worth ₹180 billion– the biggest ever by the company. This is the first buyback in three years and the fifth in the last eight years for Infosys.
This buyback price represents a 17% premium to Infosys’ share price of ₹1,536 per share (as of 20 November 2025). The record date was 14 November 2025, and the promoters are not participating in this buyback.
Promoters’ unwillingness to sell their stake during the buyback suggests they see more value in retaining the stock than selling at the buyback price. They signal confidence in the company’s future earnings or the direction the business is moving. It reassures investors that the buyback price is not the level where insiders want to exit.
H1 FY26 Reflects the Pressure on Demand
In FY25, Infosys derived nearly 28% of its revenue from the banking, financial services and insurance (BFSI) sectors. It also has a strong presence in other sectors, including retail (13.5%), communications (11.7%), energy, utilities, resources, and services (13.3%), manufacturing (15.5%), high-tech (8.0%), and life sciences (7.3%).
Infosys, like the broader sector, is facing demand challenges, which have impacted its performance. In the first half of FY26, revenue grew just 8% year-on-year to ₹867.7 billion, driven by lower volumes. Gross margin remained resilient at 30.8%, while operating margins declined 20 bps to 20.9%. Net profit rose 10.3% to ₹138.7 billion.
Looking ahead, the company expects the first half to be stronger than the second, driven by seasonality and near-term visibility. It has guided for 2–3% constant currency growth, with the lower end revised upward from 1–3%. The margin guidance for FY26 remains at 20–22%.
#3 Fairchem Organics: Buyback at ₹800 Per Share
Fairchem Organics manufactures Oleo Chemicals and Nutraceuticals. The company uses a unique manufacturing process that utilises vegetable oil by-products (soft oils like sunflower and cottonseed). These by-products are produced in tiny quantities—approximately 1.25% for acid oils and 0.25% for the Deodoriser Distillates of processed soft oils.
The company’s core products include: Oleo Chemicals (Dimer Acid, Linoleic Acid, Palmitic Acid, Monomer Acid, and Isostearic Acid), and Nutraceuticals (Tocopherols and Sterol concentrate). Fairchem is the only Isostearic Acid manufacturer in India and exports this product globally, including to the U.S.A., Europe, South America, and Southeast Asia.
The company maintains long-lasting customer relationships of more than 15 years. Customers are well-established players in high-growth industries such as Paint, Printing Inks, lubricants, and Cosmetics, including marquee names such as Asian Paints, Huber, Arkema, and Quaker.
A Buyback Timed to Restore Confidence
Fairchem Organics’ board has approved a buyback proposal to buy back 425,000 equity shares (3.26% of paid-up equity) at ₹800 per share, raising a total of ₹340 million. The buyback price is at a 17.6% premium to its current market price of ₹680 per share. Also, the promoters will not participate, which again signals their confidence in the business.
This buyback comes at a time when the stock has returned only 6% over the past five years, due to the uneven speciality chemicals cycle. The company is using this window to strengthen confidence in its long-term earnings profile.
Financial Pressures Reflect the Downturn in the Cycle
From a financial perspective, the company’s revenue in the first half of FY26 declined 20% year on year to ₹2.4 billion. EBITDA decreased by 69.2% to ₹94 million, while margins crashed 618 bps to 3.9%. Consequently, PAT declined 89% to ₹19 million. The company’s performance has been directly affected by several external headwinds and intense competition.
These include tariffs imposed by the US on certain Fairchem products, weak domestic demand, elevated raw material prices driven by high global vegetable oil prices, and dumping by China. That said, management is focusing on optimising costs, improving operational efficiency, and strengthening its value-added product portfolio to restore growth momentum.
A Gradual Expansion Phase Aimed at Rebuilding Growth
It is also expanding. Fairchem is developing a low-margin new animal feed product intended for export to Europe and the USA. Trial runs may begin in December 2025 or January 2026, with regular commercial supply anticipated to start in Q1 FY27. Commercial productions of a new product under the New Oleo Chemical Product are also expected to begin in Q1 FY27.
Bottomline
Valuation-wise, Infosys’ valuation, after almost four years of consolidation, has subsided to 22.7, from a high of 38 in December 2021. The company is now trading at a 10-year median multiple and below industry valuations, indicating valuation comfort. While concerns of a short-term slowdown remain, any recovery in demand could translate into stable earnings growth.
Valuation Assessment (X)
| Company | P/E Multiple | 10-Year Median P/E | Industry P/E |
| GHCL | 10.2 | 6.7 | 22.6 |
| Infosys | 22.7 | 22.6 | 25.7 |
| Fairchem Organics | 149 | 36.8 | 29.2 |
GHCL’s performance has also stagnated, and it is addressing this through recent expansions. This is reflected in its discounted valuation to the industry. Fairchem’s recent profit crack has increased its valuation due to the lower denominator. However, earlier in May 2025, it traded at a P/E of 35, which was also a slight premium to the industry.
Overall, these buybacks come at a time when valuations have compressed, at least in the case of Infosys and Fairchem. This signals management confidence despite uneven earnings cycles. As conditions stabilise, all three companies could be better placed to rebuild momentum.
Disclaimer:
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data was not available have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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