Not really. Ideally a company should do buyback when share price is depressed but real life is not so simple😅.
Share price depressed → company should do buyback
Company doing buyback → can have n reasons, primary reason being company has excess cash which is used to reward shareholders, company believes buyback to be better than dividend.
Infact I find TCS to be in overvalued category, flattish revenue since 1 year, industry headwinds and a technology which improves productivity and creates a level playing field for smaller players. A really high pe of 28. Opinions of other would differ.
Also, I want to ask others, I have read many times that buyback is better from tax pov, but I disagree on it. Say a investor bought shares at 3500 and sold at 4100 in buyback. The company tcs would need to pay tax of 20 percent on 4100 (-face value which is negligible anyways) which is 820 rupees!! 820 tax on a gain of 600. Is my understanding incorrect here?
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