TCS has been building up cash to meet the business requirements and for any possible acquisition, and over the years, has been increasing its dividend payments to shareholders,
Tata Consultancy Services shares rose amid lacklustre markets after the company said that it will consider a share buyback in its next board meeting scheduled for February 20.
TCS shares were trading up 1.34% at Rs 2,448.05 in the morning trade on BSE, after rising to the day’s high of Rs 2,477.5. The benchmark BSE Sensex was flat at 28,152.79 points.
“The Board of Directors will consider a proposal for buyback of equity shares of the company,” TCS said in a notice to stock exchanges.
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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— CNBC-TV18 (@CNBCTV18Live) February 16, 2017
Chandra is the Chairman-designate of TCS’s parent group Tata Sons – India’s largest business group – and is due to take over on February 21.
Earlier last month, Tata Consultancy Services said its net profit for the third quarter of the current financial year rose 10.9% on-year to Rs 67.78 billion, crossing $1 billion for the first time. Its revenue in the Oct-Dec quarter rose 8.7% on-year to Rs 297.35 billion. The results were in line with the broader market expectations.