TCS share price to hit Rs 2,900 on buyback approval, say stock market experts, dub it as a stock to buy

TCS share price has been appreciating on TCS board approving share buyback while announcing the second quarter results and the board didn't disappoint the market investors' hope.

TCS Board announced Rs 1,600 crore share buyback while announcing the quarterly results yesterday after the market was closed. Photo: Reuters

TCS share price has been appreciating on TCS board approving share buyback while announcing the second quarter results and the board didn't disappoint the market investors' hope. The board announced Rs 1,600 crore share buyback while announcing the quarterly results yesterday after the market was closed. So, stock market experts are expecting a huge rise in the TCS share price today. They are of the opinion that TCS share price history suggests that on every share buyback announcements TCS shares rise at least 5 per cent and they are expecting it to happen today as well. They said that TCS share price in immediate short-term will hit Rs 2,900 per stock levels.

On the fundamentals of TCS shares, Dipesh Mehta, Research Analyst at Emkay Global said, "TCS reported a strong rebound in revenue growth in the Sep’20 quarter after a steep decline in Q1. Revenue grew 4.8% QoQ in CC terms and adj. EBITM expanded 260bps QoQ (excluding the impact of EPIC legal claim provision). Revenue growth was broad-based and led by BFSI (6.2% QoQ cc), Retail & CPG (8.8% QoQ cc) and Life Sciences & Healthcare (6.9% QoQ cc). All markets posted sequential growth." The Emkay global analyst went on to add that TCS currently trades at around 33x/27x FY21/22E earnings. TCS remains the best execution story, however, valuations are rich.

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Speaking on the TCS share price target post share buyback announcement, Sumeet Bagadia, Executive Director at Choice Broking said, "TCS share price is expected to go up at least 5 per cent as TCS has a history of rising at least 5 per cent after the share buyback. So, we can expect it to happen today as well and in the immediate short-term we can expect TCS shares to go up to Rs 2,850 to Rs 2,900."

Bagadia said that TCS shares have made a strong breakout after sustaining above Rs 2,700 levels and now it is poi8sed to go upside and hit the immediate target of Rs 2,850 to Rs 2,900 citing Rs 2,700 is strong support for the IT counter.

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