TCS on Thursday said that its board would consider buyback of equity shares at a meeting to be held on February 20, 2017. Reacting to this news Sandeep Tandon, MD & CEO, Quant Broking said that buybacks are an artificial way to support the stock price.
TCS on Thursday said that its board would consider buyback of equity shares at a meeting to be held on February 20, 2017. Reacting to this news Sandeep Tandon, MD & CEO, Quant Broking said that buybacks are an artificial way to support the stock price. “N Chandrasekaran’s exit from TCS is a big blow. I don’t see too many buyers for TCS at current level,” he told ET Now in an interview. The news of TCS buyback comes after Cognizant’s $3.4 billion buyback plan.
Earlier yesterday, N Chandrasekaran, the outgoing MD and CEO of India’s largest information technology services company had said in an interview to CNBC TV18 that the company had received suggestions from investors over the need for certainty on dividend policy along with share buyback to distribute its large cash pile to the shareholders. “These two comments have come from investors and we will discuss it in the board,” Chandra, as he is popularly known, said to CNBC TV18.
Sanjay Dutt, head of the brokerage firm Quantum Securities, said that he did not think that the proposed buyback was negative or a sign of saturation in growth.
TCS had consistently been building up cash to meet the business requirements and for any possible acquisition. Earlier, Chandra had said that he would not want the company to fall short of cash in case any opportunity for an acquisition came along. Over the years, TCS has been increasing its dividend payments to shareholders, Chandra said to CNBC TV18.
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Meanwhile, speaking on the Infosys issue, Tandon said “Vishal Sikka is trying hard to address business challenges but tt is very difficult to say if Infosys will extend its outperformance.” When asked about the IT sector he said, “IT sector is currently out of favour and I am bearish on technology since September 2014,” he said.