How does the buyback of TCS look like at this point?

TCS has fixed the buyback price for its proposed buyback at Rs.4,500 per share. This price is at an approximate 17% premium to the current market price on the date of the announcement. The total size of the buyback will be around Rs.18,000 crore which is more than 10% higher than the previous 3 buybacks of Rs.16,000 crore each.

Currently, TCS trades at 31X forward earnings and a premium priced buyback surely instils confidence in the shareholders. Buyback also enhances EPS by reducing the outstanding shares. In its Dec-21 review, TCS had announced solid growth in top line, but its operating profit margins had fallen by 189 bps yoy. TCS also announced interim dividend of Rs.7 per share.