Tata Consultancy Services will consider buyback of equity shares. TCS board will meet on October 11, 2023 to consider the decision, the company said in a statement. Ahead of the buyback announcement, TCS shares ended nearly 1 percent higher at Rs 3,621.25 on NSE.
As of June 2023, TCS had a cash balance of Rs 15,622 crore, and the IT major is debt free.
TCS launched its last share buyback in the year 2022 when the IT major bought back shares worth Rs 18,000 crore. The issue size comprised of 4 crore shares priced at Rs 4,500 apiece with face value of Re 1 per share.
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Earlier this year, two other major IT companies completed share buybacks. In February 2023, Infosys ended its buyback after purchasing 6.04 crore of its shares for Rs 9,300 crore. In June, Wipro announced a Rs 12,000 crore share buyback, its largest ever.
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The TCS board is set to deliberate on a share buyback proposal on the same day the IT major is slated to announce its Q2FY24 financial results.
Analysts expect TCS to deliver sequential growth in profit after tax (PAT), revenue. In terms of margin performance, it is expected to outperform other tier-1 peers. Since the company has announced multiple large cost take-out deals, it is likely to result in robust total contract value (TCV) bookings for TCS.
In the previous quarter, TCS reported a nearly 17 percent year-on-year (YoY) rise in consolidated net profit to Rs 11,074 crore. Its consolidated revenue increased nearly 13 percent YoY to Rs 59,381 crore.
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