TCS gains 2% in a weak market on fixing record date for its share buyback

The company fixed February 23, 2022, as the record date for the Rs 18,000 crore share buyback plan.

Shares of Tata Consultancy Services (TCS) were up 2 per cent at Rs 3,773 on the BSE in Monday’s intra-day trade in an otherwise weak market after the information technology (IT) consulting & software company fixed February 23, 2022, as the record date for share buyback. In comparison, the S&P BSE Sensex was down 2.3 per cent at 56,840 at 09:36 am.

“The company has fixed Wednesday, February 23, 2022, as the Record Date for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the Buyback,” TCS said in an exchange filing on Saturday.

The board of directors of TCS on January 12, 2022 had approved to buyback up to 40 million equity shares of face value of Rs 1 each at Rs 4,500 per equity share for an aggregate amount not exceeding Rs 18,000 crore. The amount is 12.5 per cent higher than historical buyback.

Shares of TCS have outperformed the market since buyback announcement, with a 4 per cent decline, as compared to 6 per cent fall recorded by the S&P BSE Sensex. Thus far in the calendar year 2022, the stock remained flat, as against a 2 per cent decline in the benchmark index.

TCS continued to see robust demand as key themes, such as cloud modernization, connected enterprise & product innovation, customer experience and digital workplace transformation, gained traction. It has signed deals worth USD7.6 billion in Q3, with a book-to-bill ratio of 1.2x, analysts at Emkay Global Financial Services said in December quarter result update.

Management indicated that the deal intake remained well balanced across deal sizes in Q3, with the strongest deal pipeline. Management remains confident of delivering double-digit revenue growth in FY22, considering healthy deal wins/deal pipeline and broad-based growth, the brokerage firm said with maintain ‘buy’ rating and target price of Rs 4,150 per share.