Tata Consultancy Services (TCS) has revealed its intention to explore a share buyback program. The board of TCS is scheduled to convene on October 11, 2023, to assess this proposal, as stated in an official announcement by the company. Before the announcement of the buyback plan, TCS shares showed a nearly 1 percent gain, closing at Rs 3,621.25 on the National Stock Exchange (NSE).
As of June 2023, TCS held a substantial cash balance of Rs 15,622 crore and remained free of debt.
In the year 2022, TCS conducted its most recent share buyback, amounting to Rs 18,000 crore. The buyback comprised 4 crore shares priced at Rs 4,500 each, with a nominal value of Re 1 per share.
Earlier this year, two other prominent IT companies also completed share buybacks. In February 2023, Infosys concluded its buyback after acquiring 6.04 crore of its shares for Rs 9,300 crore. In June, Wipro announced its largest-ever share buyback program, worth Rs 12,000 crore.
The board of TCS is scheduled to deliberate on the share buyback proposal on the same day the company is set to unveil its Q2FY24 financial results.
Analysts anticipate TCS to report sequential growth in profit after tax (PAT) and revenue. It is also expected to exhibit strong margin performance, outperforming other tier-1 peers. TCS has recently announced several significant cost optimization deals, likely resulting in robust total contract value (TCV) bookings.
In the preceding quarter, TCS recorded a remarkable year-on-year (YoY) surge of nearly 17 percent in consolidated net profit, reaching Rs 11,074 crore. Its consolidated revenue also witnessed substantial growth, rising by almost 13 percent YoY to reach Rs 59,381 crore.
