TCS share price hits all time high after Q2 results, stock jumps by 5%

TCS announced a Rs 16,000 crore share buyback at Rs 3,000 per share on Wednesday night.
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The share price of Tata Consultancy Services hit an all-time high on Thursday morning, after it announced a Rs 16,000 crore share buyback at Rs 3,000 per share on Wednesday. The stock rose by 5% to Rs 2,875 — its one-year high — on the Bombay Stock Exchange (BSE). On the National Stock Exchange, it jumped 5.185 to its 52-week high of Rs 2,877.90.

At the time of writing, the stock was trading 4.90% up at 2,868.15 on BSE.

The IT major, meanwhile, reported a 6.87% dip in the September quarter net profit at Rs 7,504 crore but said the demand has recovered faster than projected and will be sustainable going forward as well.

“TCS impressed with revenue growth of 4.8 per cent quarter-on-quarter. Broad-based growth across geographies and verticals indicates healthy recovery across segments,” said a report by Motilal Oswal Research.

The company also announced that it will be offering salary hikes to employees effective October. It had said that it would be suspending hikes in the beginning of the lockdown.

In 2017 and 2018 too, TCS had undertaken buyback offers of similar sizes.

"The Board of Directors of the company at its meeting held today has approved a proposal to buyback up to 5,33,33,333 equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore, being 1.42 per cent of the total paid-up equity share capital, at Rs 3,000 per equity share," TCS said on Wednesday.

Meanwhile, Sensex soared over 400 points on Thursday morning to cross the 40,000-mark led by strong buying sentiment in IT and banking stocks amid positive cues from global markets and sustained foreign fund inflow.

The 30-share index was trading 452.15 points or 1.13% higher at 40,331.10, and the NSE Nifty soared 117.50 points or 1 per cent to 11,856.35.

In the Sensex pack, the other stocks that were trading on a positive note include HCL Tech, Infosys, Tech Mahindra, Tata Steel, Bajaj Finserv, IndusInd Bank, Axis Bank and SBI.

On the other hand, ONGC, Asian Paints, Titan, ITC and PowerGrid were among the laggards.

In the previous session, Sensex ended 304.38 points or 0.77% higher at 39,878.95, while Nifty jumped 76.45 points or 0.66 per cent to close at 11,738.85.

Exchange data showed that foreign institutional investors bought equities worth Rs 1,093.81 crore on a net basis on Wednesday.

According to Arjun Mahajan, Head - Institutional Business - at Reliance Securities, while there is still some amount of ambiguity about fiscal stimulus, US President Donald Trump's remark to sign separate fiscal stimulus created positive sentiments which led US markets to move higher.

Indian market is expected to move in tandem with global markets, he said, adding that better prospects of 2Q earnings and continued hope about domestic fiscal stimulus will provide support to domestic benchmarks.

IT stocks are likely to be in focus after solid 2Q numbers reported by TCS along with announcement of the buyback offer, he added.

Meanwhile, on the global front, bourses in Tokyo and Seoul were trading on a positive note in mid-session deals, while Hong Kong was in the red. Stock exchanges in Shanghai were closed for holidays.

Wall Street indices ended with significant gains in the overnight session.

With inputs from agencies

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