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TCS announces Rs 16,000 crore share buyback, profit falls 7% in Q2

The net profit excluded Rs 1,218 crore-provision towards legal claim. Including this number, the net profit was at Rs 7,475 crore, TCS said in a regulatory filing.

By: ENS Economic Bureau | Mumbai |
Updated: October 8, 2020 12:34:03 am
TCS, TCS stocks, TCS shares, TCS sensex, TCS nifty, markets news, business news, Indian ExpressOn the NSE, it jumped 5.18 per cent to its 52-week high of Rs 2,877.90.

Tata Consultancy Services (TCS), India’s biggest software services exporter, on Wednesday reported a 7 per cent decline in its net profit at Rs 7,475 crore for the quarter ended September 2020, as against Rs 8,042 crore in the same quarter last year. The TCS board also announced a Rs 16,000 crore share buyback programme — its third in the last four years — at a price of Rs 3,000 per share, a premium of 9.59 per cent to Wednesday’s closing price.

“The board has approved a proposal to buy back up to 5.33 crore equity shares, being 1.42 per cent of the total paid-up capital at Rs 3,000 per equity share for an aggregate amount not exceeding Rs 16,000 crore on a proportionate basis under the tender offer route using the stock exchange mechanism,” TCS said. Its shares closed at Rs 2,737.40 on the BSE Wednesday.

While the net profit (before adjustment) increased by 4.9 per cent (year-on-year) to Rs Rs 8,433 crore, it made a provision for legal claim of Rs 1,218 crore. The revenue in constant currency terms witnessed a drop of 3.2 per cent on a year-on-year basis. Consolidated revenue from operations for the quarter stood at Rs 40,135 crore, up by 3 per cent on a year-on-year basis. It declared an interim dividend of Rs 12 per equity share of Re 1 each of the company.

Rajesh Gopinathan, MD &CEO, said: “Driving accelerated business value realization of our customers’ digital investments has resulted in broad-based revenue growth. The strong order book, a very robust deal pipeline, and continued market share gains give us confidence for the future.”

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