Tata Consultancy Services: A permanent solution needed to address rising cash pile

Unlike peers Wipro and Infosys, TCS has been more cautious about mergers and acquisitions

Even after announcing the country’s largest share buyback at Rs 16,000 crore, Tata Consultancy Services (TCS), the largest information technology (IT) services provider, will be left with a cash reserve of Rs 23,219 crore.

At the end of the third quarter of the current financial year, TCS reported cash reserves (including investment) of Rs 39,219 crore, higher than Infosys’ Rs 35,985 crore. If one looks at TCS’ cash pile, its preferred route to return profits to shareholders via dividends and its poor history of using cash for acquisitions, the company should look at a structured share repurchase programme, say analysts.