HCL Tech surges 3% as firm follows TCS, Cognizant, mulls share buyback

NEW DELHI: Shares of HCL Technologies climbed nearly 3 per cent in Thursday’s trade after the IT major said that its board will meet next week to consider a stock buyback, joining TCS and Cognizant, which have opted for a similar the route to make good of idle cash they are lying with.

The stock climbed 2.86 per cent to hit a high of Rs 864 on BSE. At this price, the stock is trading at 17.68 times its trailing 12-month EPS and 4.42 times its book value.

In a filing to BSE, the company said, “A meeting of the board of directors of the company will be held on Monday to consider a proposal for buyback of the equity shares of the company."

IT firms have been under increasing pressure from investors to utilise the huge cash pile on books either through a share buyback or generous dividend. TCS had Rs 43,169 crore in cash reserves, while Infosys had liquid assets, including cash and cash equivalents and investments worth Rs 35,697 crore (about $5.25 billion) at the end of December 2016, PTI reported.

HCL Tech had $326 million or Rs 2,214.5 crore in cash and cash equivalents on its books in December 2016.