Will TCS Follow Infosys’ Lead With Buyback? 5 Crucial Factors Every Investor Must Watch

New Delhi: Infosys has announced a massive Rs 18,000 crore share buyback, the largest in its history. This move aims to support the company’s stock performance amid weak growth in the IT sector. The announcement has sparked speculation that other tech giants, such as TCS, might follow with their own buybacks.

Expert Cautions on TCS Buyback Speculation

Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that while Infosys’ buyback positively impacts the IT sector, it doesn’t guarantee that TCS will announce a buyback. Market expectations exist, but a TCS buyback is not certain.

CLSA Weighs in on TCS Buyback Prospects

Following Infosys’ announcement, brokerage CLSA suggested that TCS may consider a buyback, possibly a tender offer worth around Rs 20,000 crore, rather than a large dividend payout, possibly in Q3.

TCS Buyback History

TCS has completed five buybacks since 2017:

2017, 2018, and 2020: Rs 16,000 crore each (shares bought at Rs 2,850-3,000)

Post-COVID buybacks in 2022 (Rs 18,000 crore) and 2023 (Rs 17,000 crore)

In total, TCS has spent about Rs 83,000 crore on share buybacks so far.

Management’s Motive for Buybacks

Buybacks typically signal management confidence in the business fundamentals and help boost investor trust. Khemka remarked that while TCS has a strong history of buybacks and dividends, the company might announce a new buyback following Infosys’ lead, but this remains uncertain.

TCS Growth Outlook for FY26

TCS revenue is expected to slow down in FY26 compared to FY25. The company reported a 3.3 percent quarter-on-quarter revenue decline in Q1 and a year-on-year decline as well. North America and Europe, key markets for TCS, showed reduced revenue, though there was some sequential recovery due to currency factors. Challenges in discretionary spending and sector-specific impacts from new tariffs and geopolitical tensions have pressured revenues, especially in BFSI and energy sectors. Brokerages anticipate recovery only from FY27 onwards, factoring in margin pressures from new deals such as BSNL.

Strong Order Pipeline and AI Focus

Despite near-term revenue challenges, TCS started FY26 with a robust order pipeline worth USD 9.4 billion, up 13.2 percent year-on-year. The company highlights “Agentic AI” as a key theme in client interactions and expects international revenue in FY26 to surpass FY25 levels.

TCS Share Performance

TCS shares have gained nearly 3 percent in the past week, rebounding from a steep 9 percent decline over the last three months. However, the stock remains down 30 percent in the past year and 23 percent year-to-date in 2025, reflecting broader sector pressures.