India’s leading software company, Tata Consultancy Services Ltd (TCS), has reported an 8.7% increase in its net profit to Rs 11,342 crore for the quarter ended September, compared to Rs 10,431 crore during the same period in the previous year. The company’s board of directors has approved a proposal to buy back up to 4.09 crore equity shares for an aggregate amount not exceeding Rs 17,000 crore. Additionally, TCS announced a dividend of Rs 9 per equity share.
The approved buyback price is Rs 4,150 per equity share, reflecting a 15% premium over the closing price on Wednesday.
A share buyback, or share repurchase, involves a listed company purchasing its own shares from existing shareholders. This process reduces the number of outstanding shares in the open market over time, potentially leading to improved valuation and earnings per share (EPS).
TCS reported a 7.9% growth in consolidated revenue to Rs 59,692 crore for the July-September quarter, compared to Rs 55,309 crore in the same period of fiscal 2023.
K Krithivasan, CEO and Managing Director of TCS, stated, “Strong deal momentum delivered us a very large order book in Q2 – our second-highest total contract value ever in a quarter, and a good pipeline. The resilience of demand for our services, our clients’ willingness to commit to long-term programs, and their continued appetite for experimentation with Gen AI and other new technologies give us confidence in our longer-term growth prospects.”
In terms of industry performance, the energy, resources, and utilities vertical led with a 14.8% growth, followed by manufacturing at 5.8%, and life sciences and healthcare at 5%. The Consumer Business Group (CBG) grew by 1%, while BFSI declined by 0.5%. The communications & media sector and technology & services recorded decreases of 2.1% and 2.2%, respectively.
Regionally, the United Kingdom led with 10.7% growth, North America grew by 0.1%, and Continental Europe increased by 1.3%. In emerging markets, the Middle East & Africa reported 15.9% growth, Latin America grew by 13.1%, Asia Pacific by 4.1%, and India by 3.9%.
N Ganapathy Subramaniam, Chief Operating Officer and Executive Director of TCS, noted that the company continues to invest in its people and new technologies. TCS now has a pool of 100,000 Gen-AI ready consultants and prompt-engineers engaged in numerous Gen-AI projects for clients across segments.
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During the quarter, TCS was awarded a project by BSNL to integrate and deploy a modern, indigenous pan-India 4G and 5G mobile network.
TCS’s stock ended at Rs 3,610.2 apiece, representing a 0.52% decrease on Wednesday.