TCS May Announce Share Buyback Along With Q1 Results: Jefferies
TCS is slated to announce its first quarter results and an interim dividend on July 12.
Tata Consultancy Services Ltd. may announce a share buyback—its fifth in six years—along with its first-quarter results, according to Jefferies Financial Group Inc.
India's largest IT services firm is slated to announce on July 12 its earnings for the April–June quarter, according to a June 30 exchange filing. The TCS board will also consider declaration of an interim dividend to equity shareholders on the same day.
"We believe TCS could announce a buyback as well," Jefferies said in note on June 30.
"Commentary around nature/tenure of deals, sales/deal cycles, pricing, vendor consolidation and attrition would garner attention," it said. "While positives should be taken with caution, negatives could raise concerns."
A share buyback, if announced, would be TCS' fifth in six years.
In March 2022, the company had offered to buy back 40 million shares at Rs 4,500 apiece to garner up to Rs 18,000 crore.
In 2020, the shareholders approved a proposal to repurchase 53 million shares at Rs 3,000 apiece to garner up to Rs 16,000 crore.
In 2017 and 2018, the company announced buybacks worth Rs 16,000 each at Rs 2,100 and Rs 2,850 per share, respectively.
Jefferies expects TCS to deliver a tepid quarter. It expects revenue to be flat due to project ramp-downs, delayed ramp-ups and slower sales cycles. It expects EBIT margin to contract by 150 basis points quarter-on-quarter due to wage hikes.
"(We) expect deal bookings to be strong due to large/mega deals announced recently," it said. "Key focus would be on strategic direction under the new CEO and demand commentary."
