On Wednesday, Tata Consultancy Services (TCS) reported a 4.7 percent quarter-on-quarter growth in revenue at Rs 40,135 crore for the second quarter of 2020-21. Its net profit fell by 7.05 percent to Rs 7,475 crore for the September ended quarter when compared to Rs 8,042 crore from the same period a year ago.
The company's board approved an interim dividend on Rs 12 per share and a Rs 16,000 buyback plan.
TCS share buyback plan
"The Board has approved a proposal to buy back up to 5,33,33,333 equity shares of TCS, being 1.42% of the total paid up equity share capital, at Rs 3,000 per equity share for an aggregate amount not exceeding Rs 16,000 crore (excluding taxes and related expenses), on proportionate basis under the tender offer route using the stock exchange mechanism, subject to approval of the members by means of a special resolution through a postal ballot," the company's statement said.
TCS had undertaken a share buyback programme worth up to Rs 16,000 crore in 2018. There was a similar share purchase programme in 2017.
It is the first among cash-rich tech companies to announce a share buyback this financial year.
The company's board declared a second interim dividend of Rs 12 per equity share of Rs 1 each. The dividend will be payable on 3 November 2020 and 15 October 2020 is fixed as the record date for the purpose.
The company's board approved the appointment of Samir Seksaria as Chief Financial Officer Designate, and would take over Ramakrishnan V, the current CFO with effect from 1 May 2021.
"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," said Rajesh Gopinathan, CEO and MD, commenting on the quarterly results.
"What we are witnessing right now is the start of the first phase of a multi-year technology transformation cycle. In the current phase, enterprises are building a cloud-based foundation that will serve as a resilient, secure and scalable digital core. In subsequent phases, we will see the native capabilities of these platforms being utilized to create innovative new business models and differentiated customer experiences," he added.
Shares of TCS hit a new all-time high of Rs 2,769 ahead of the Q2 results.