Tata unveils share buyback of up to US$2.2b

[MUMBAI] Tata Consultancy Services announced a share buyback of as much as US$2.2 billion after posting worse than expected results Wednesday as biggest clients remained reluctant to spend on technology while grappling with global market and economic uncertainty.

Asia's largest software outsourcing provider said its board had approved a plan to repurchase shares for as much as 160 billion rupees (S$2.96 billion). The decision came as the company reported a 7 per cent fall in net income to 74.75 billion rupees in the quarter ended September, compared with an estimate of 78.38 billion rupees.

Like Infosys and Wipro, TCS is struggling to serve global financial services giants and corporate clients after a nationwide lockdown forced hundreds of thousands of their employees to work from home. IT budgets are loosening as lockdowns ease globally, but the bounce-back has been uneven given lingering economic uncertainty.

Chief executive officer Rajesh Gopinathan has expressed confidence in achieving TCS's long-term profitability goals despite disruptions from the coronavirus. The company is experiencing an acceleration in client spending on digital services such as cloud migration, remote work and security.

Mr Gopinathan said in July he expects year-on-year revenue growth to return to pre-Covid levels by the fiscal fourth quarter in constant currency terms.

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