Shares of Tata Consultancy Services Ltd (TCS) on Monday surged about3.5 after the establishment said its board will consider buyback of shares on 12 January.
The stock touched a high of Rs3979.90 on BSE, up3.47 percent from its former close. At9.20 am, the scrip was trading at Rs3925.75, up2.1 from its former close.
The board will also meet to advertise third quarter earnings. This will be the fourth buyback and in before three buybacks Tata Sons was the biggest devisee.
In 2021, TCS bought back further than 53 million shares at Rs 3000 a share and33.33 million shares were accepted under the offer. In 2017 and 2018 as well it shouldered two buybacks and the size was around Rs 16000 crore each. At the end of September 2021, TCS had cash and cash coequals of Rs 51950 crore.
The rearmost move comes after Tata Sons buying Air India from the government for Rs 18000 crore. The establishment will pay Rs 2700 crore to the government and the rest will go to paying debt. Tata Sons holds 72 stake in TCS presently.
In September 2021, Infosys blazoned a buyback of Rs 9200 crore while in January 2021 Wipro conducted a Rs 9500 crore buyback. In 2018, HCL Tech had accepted a Rs 4000 crore buyback.
Judges say share buybacks generally ameliorate earnings per share and return fat cash to shareholders while also supporting the stock during sluggish request conditions.
On the earnings front, judges anticipate TCS to report strong earnings for the December quarter. Antique Stock Broking expects it’ll report constant currency growth of 3 quarter on quarter and bone profit growth of2.5 quarter on quarter, with cross currency tailwind of 50 base points.
“ The strong results should be led by broad- grounded growth across sectors. Anticipate periphery expansion of 40 base points led by functional effectiveness and strong growth,” Antique Stock Broking says adding “ crucial investors concentrate areas will be commentary on demand trends, instigation around deal triumphs/ channel and update on waste”. The brokerage establishment has given steal standing and set target price of Rs 4325 a share.