SYNOPSIS:
About a month ago, Infosys announced an Rs. 18,000 crore buyback, sparking speculation that TCS, facing falling shares and past buybacks, could follow as a confidence‑boosting measure amid weak demand.
In September this year, Infosys announced a share buyback worth Rs. 18,000 crore, intending to repurchase 10 crore equity shares at an average price of Rs. 1,800 each, representing about 2.41 percent of its paid‑up equity capital. Following Infosys’ announcement, a question arises – will Tata Consultancy Services (TCS) also consider a share buyback amid the recent decline in its share price?
TCS has conducted five major share buybacks in six years, from 2017 to 2023, cumulatively returning nearly Rs. 83,000 crore to shareholders. The buybacks occurred roughly every 1-2 years, with notable buybacks in 2017, 2018, 2020, 2022, and the latest in 2023.
The buyback amounts ranged from Rs. 16,000 crore to Rs. 18,000 crore each time, with shares bought at significant premiums to the market price, ranging from around Rs. 2,100 to Rs. 4,500 per share.
The global brokerage firm CLSA suggested that with Infosys proposing a fresh share buyback, Tata Consultancy Services (TCS) could face increased pressure to consider a similar move as a confidence‑building measure amid a generally weak demand environment.
CLSA analysts noted that Infosys’ buyback announcement could prompt discussions at TCS, India’s largest IT services firm, regarding a comparable action. They pointed out that TCS’ past 5 buybacks have typically provided technical support to its stock price from the announcement date until completion. Since the company’s last buyback closed in December 2023, CLSA indicated that the company might consider a Rs. 20,000 crore tender buyback in Q3 FY26 instead of declaring a large special dividend.
Additionally, analysts at Morgan Stanley noted earlier that the timing of Infosys’ buyback is “interesting” and interpreted it as a “signal of stability.”. They highlighted that it has been more than 12 months since the last buyback announcements and completions for TCS and Wipro, making both companies potential candidates for new buyback moves.
In 2025 so far, Tata Consultancy Services Limited (TCS) shares have declined by around 26 percent, including a drop of about 6 percent over the past six months. In comparison, Infosys Limited shares have fallen around 20 percent this year but gained over 7 percent in the last six months.
Written by Shivani Singh
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