Tata Consultancy Services (TCS) said on Friday that its board will consider a buyback of shares, its fourth since 2017, when the IT bellwether’s board meets on October 11.
The Tata Group company, however, did not disclose details such as the shares it intends to purchase or the quantum of money it would spend for the buyback.
Ahead of the announcement, TCS’ shares had ended up 0.87% at Rs 3,620.20 on the BSE.
The firm’s last buyback was in January 2022, when it bought back 40 million shares for Rs 18,000 crore. Prior to this, it had bought back 53.33 million shares for Rs 16,000 crore.
Since 2017, TCS had bought back shares worth Rs 66,000 crore that included a Rs 16,000 crore buyback in June 2018 and another of the same amount in February 2017.
The buyback comes at a time when margins of the IT services firms are expected to remain under pressure as there is no sign of a revival in discretionary spends, according to analysts.
Analysts at Nomura said the void created by the lower number of small-sized and discretionary projects, along with delays in client decision-making and ramp-up of projects won, in certain cases, will lead to both revenue and margin disappointments in the near term, given the “sticky” nature of costs.
Jefferies expects aggregate revenues in the second quarter for its coverage universe to grow at 0.5% on a quarter-on-quarter basis in constant currency — marking a return to growth after two quarters of decline.