On the 5th of October, the share prices saw a grand gap-up opening and continued to make highs until the end of the trading session. It rose by around 6% before the board meeting and made new highs on both BSE and NSE. After the bullish rally, the market evaluation of the company touched Rs 10,03,012.43 crores in BSE. Tata Consultancy Services just became the 2nd India company to cross the Rs 10 lakh crore market cap mark.
And it is no surprise that the company reported a jump in profits in Q2 2020. The leap was of 4.9% amounting the total gain to Rs 8,433 crores. The company also simultaneously announced the 16,000 crores buyback program, which was approved by the board in the meeting on 7th October.
About Tata Consultancy Services
TCS is a multinational IT firm with its headquarters in Mumbai. It was even ranked 64th by Forbes in 2015, as the world’s most innovative companies ranking. The company provides a lot of services like cognitive business operations, consulting, blockchain, IoT, Enterprise Applications and more. By providing the best quality services, TCS has become the 2nd largest company in India (market cap wise).
Buyback plans of TCS
The company has registered a net profit of Rs 8,042 crores in September 2019. Reports suggest that the company has seen a constant growth of 3% in its revenue per year. Therefore, the board has proposed that it will buyback shares worth Rs 16,000 crores at Rs 3000 per share. This is quite a good jump from the price of Rs 2737.4 that it closed on Wednesday.
TCS said, “The Board has approved a proposal to buy back up to 5,33,33,333 equity shares of TCS, being 1.42 per cent of the total paid-up equity share capital, at Rs 3,000 per equity share for an aggregate amount not exceeding Rs 16,000 crores”. The company says that the buyback is a way to return excess cash to its shareholders. All in all, this is an excellent move by TCS and can also be taken into account by other IT companies too.
Being the 2nd largest company in India, it is good to see that they see constant growth. Have you been an investor in Tata Consultancy Services, and what are your thoughts on the buyback plan confirmed by the board of directors of the company? Do let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.