Finshots Daily Are buybacks these days just kicking the can down the road?
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Sep 15, 2025 Stock buybacks are under scrutiny as experts debate whether they deliver true value or just short-term cheer. The discussion delves into the challenges facing Indian IT companies, emphasizing the need for sustainable growth over quick financial fixes. The podcast advocates for prioritizing research and development to foster long-term success rather than merely kicking the can down the road. Tune in for insights that question the effectiveness of current financial strategies!
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Why Buybacks Are Financially Attractive
- Buybacks give cash now or a larger ownership slice later and boost EPS by reducing shares outstanding.
- They are seductive because they deliver quick price support without fixing underlying business problems.
Enforces' ₹18,000 Crore Buyback Example
- Finshots uses Enfoces' ₹18,000 crore buyback as a concrete example where markets cheered but long-term value is unclear.
- The episode questions whether that cash should instead be used for strategic investments.
AI And Tariffs Demand Investment, Not Buybacks
- Indian IT faces two strategic battles: AI disruption and tariff risk that demand investment, not cash returns.
- Spending on buybacks reduces funds available for R&D, productization, and building defensible IP.