 "TCS")
Shares of Tata Consultancy Services (TCS) jumped 4 per cent to Rs 3,523.20 on the BSE in Thursday’s intra-day trade after the company fixed November 25 as the record date for its Rs 17,000-crore share buyback.
The company will buy back up to 40.9 million shares, about 1.12 per cent of its total equity, for Rs 4,150 apiece. This is the fifth share buyback of TCS in the last six years.
The buyback shall be done on a proportionate basis through the tender offer route.
In an exchange filing, TCS said the buyback is in line with the company's shareholder-friendly capital allocation practices of returning excess cash to shareholders, thereby increasing shareholder value in the longer term, and improving the return on equity.
Meanwhile, TCS’s order book stood at $11.2 billion (up 38.3 per cent YoY) and book-to-bill ratio improved to 1.6 times from 1.2 times in Q2FY23.
"Given robust order inflows, healthy contract pipeline, improving talent utilisation levels and cost-efficiency efforts, we remain optimistic about the company delivering robust growth in the medium-to-long-term," said analysts at Geojit Financial Services.
TCS is currently trading at 28.5x/24.7x on FY24E/FY25E earnings. Despite persistent global macro uncertainties, TCS is well positioned with its size, steadfast market leadership position, best-in-asset class execution and order book (especially exposure to longer duration contracts) to deliver industry-leading growth/margin and demonstrate superior return ratios, said K R Choksey Shares and Securities in its Q2 result update.
