TCI share price dips over 6% after announcement of share buyback at ₹1,200 apiece

TCI share price: Transport Corporation of India Limited (TCI) saw its share price decline by over 6 per cent following the company's share buyback announcement. On August 24, 2024, TCI informed the stock exchanges that its board of directors had approved a buyback of up to 1,333,333 equity shares at ₹1,200 per share through a tender offer. The buyback plan, aimed at returning value to shareholders, was well-received initially, but the stock still faced downward pressure in the market.

TCI buyback of shares

The company informed the Indian bourses about the buyback move saying, ""We refer to our letter dated August 24, 2024 whereby we had informed the stock exchanges that the board of directors (“Board”) of Transport Corporation of India Limited (“Company”), at its meeting held on August 24, 2024 (“Board Meeting”), have approved the buyback of up to 13,33,333 Equity Shares of the Company at a price of INR 1200/- (Indian Rupees Twelve hundred only) per Equity Share (“Buyback Price”) on a proportionate basis through the “tender offer” route, in accordance with the provisions contained in the Buyback Regulations (“Buyback”)."

TCI buyback record date

In furtherance of the same, we wish to inform you that the Board in the Board Meeting has also considered and approved September 4, 2024” as the record date (“Record Date”) for the purpose of determining the entitlement and the names of equity shareholders who would be eligible to participate in the Buyback, in accordance with Regulation 42 of the Listing Regulations and Regulation 9(i) of the Buyback Regulations.

TCI Express released its Q1 financial results on August 13, 2024, reporting a 3.9% revenue decline and a substantial 31.02 per cent profit drop year-over-year (YoY). The company's revenue fell by 7.61% compared to the previous quarter, while profit saw a 29.41% decrease.

The financial report highlighted a rise in Selling, General, and Administrative (SG&A) expenses, which increased by 3.16% quarter-over-quarter (QoQ) and 3.87% YoY. This increase has added further strain on the company's profitability.

Operating income also declined by 30.87% QoQ and 33.84% YoY, signalling difficulties maintaining operational efficiency in the face of rising costs.

The Earnings Per Share (EPS) for the quarter was ₹5.8, down by 30.95% YoY, reflecting the company's ongoing challenges in sustaining consistent earnings.

Regarding market performance, TCI Express has seen a negative return of -0.96% over the past week, -6.73% in the last six months, and a year-to-date (YTD) return of -17.85%. These figures suggest growing investor concerns about the company's recent financial performance.

TCI share price today opened with a downside gap at ₹1,080 apiece on the NSE and touched an intraday low of ₹1,061.15 per share. The stock had ended at ₹1,145.55 per share on Friday last week. This is the first time the company board has declared buyback of shares.

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