Finance
By: Shree1news, 19 DEC 2020
Tata Consultancy Services (TCS), India’s largest IT services firm’s share buyback programme of up to ₹16,000 crore at a price of ₹3,000 per share is open. The buyback offer will close on January 1. Last month, TCS shareholders had authorised a proposal to purchase again as much as 5.3 crore shares of the company, having a face worth of Re 1 every at ₹3,000 per scrip. Ought to investors tender or not depends upon their investment horizon, says analysts.
“Whether an investor should tender or not depends on the investment horizon. We would recommend investors with a long run funding horizon of higher than one year to hold on to the stock given strong demand growth expected for IT services due to increased adoption of digital technologies,” says Jyoti Roy – DVP- Equity Strategist, Angel Broking.
“This was evident from Accenture Q1FY2021 numbers which came in above street estimates due to greater demand for outsourcing which is positive for India IT companies. Post the Accenture numbers we expect a rerating for Indian IT companies,” Roy adds.
Accenture’s first quarter income growth of 2% year-on-year in constant currency terms was a lot ahead of its guided vary of -3% to 0%. Additional, Accenture’s new bookings for the three months ended November, increased by 25% year-on-year to $12.9 billion.
Analysts say that enormous Indian IT firms tend to mirror Accenture’s performance with some lag. The company follows a September-August financial year.
For TCS share investors with a short term horizon, Roy recommends to go for the offer.
She says, “Investors with a short term investment horizon in TCS shares can tender their share in the buyback given the fact that there would be no tax liability in the investor tendering their shares in the buyback.”
TCS share price had hit its all time high of ₹2,898 on Friday, as the buyback programme opened. The last closing price was ₹2,852.
Source: A-N
