India’s largest software exporter Tata Consultancy Services (TCS) on Sunday said that its board will consider a share buyback proposal on Wednesday.
The company’s stock rallied on the news with an increase of 7.83% to Rs 2,720.35 per share, Monday afternoon.
The Mumbai-headquartered company is the first to announce a share buyback, among its peers in 2020, since Covid-19 led to a muted growth across IT revenues in the industry.
TCS is expected to report its financials for the second quarter of the financial year 2020-21 on Wednesday.
In the quarter ended June 2020, TCS reported a marginal increase of 0.4% in revenue to Rs 38,322 crore, as the Covid-19 pandemic eroded revenue across verticals. CEO Rajesh Gopinathan had said that the impact had been broadly along expected lines and that the company’s revenue will be back to pre-Covid-19 levels by the third quarter.
In a separate statement to the stock exchanges on Sunday, the company said it has incurred an exceptional item expense of Rs 1,218 crore for three and six months ended September 30, due to lawsuit damages it is facing from an intellectual property related dispute in the United States.
The lawsuit relates to an allegation that TCS used Epic System's information for the development of its own hospital management system “Med Mantra” which was implemented for a large hospital chain in India in 2009.