Tata Consultancy Services Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2013-2014 to 2023-2024.
Growth
Compounded Sales Growth
10 Years:
11%
5 Years:
10%
3 Years:
14%
TTM:
5%
Compounded Profit Growth
10 Years:
9%
5 Years:
8%
3 Years:
12%
TTM:
9%
Stock Price CAGR
10 Years:
12%
5 Years:
16%
3 Years:
4%
1 Year:
17%
Return on Equity
10 Years:
40%
5 Years:
44%
3 Years:
47%
Last Year:
52%
Last Updated: Unknown
Balance Sheet
Last Updated: Unknown
Month
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Mar 2024
Equity Capital
196
196
196
197
197
191
375
375
370
366
366
362
Reserves
38,350
48,999
50,439
70,875
86,017
84,937
89,071
83,751
86,063
88,773
90,058
90,127
Borrowings
332
297
358
245
289
247
62
8,174
7,795
7,818
7,688
8,021
Other Liabilities
13,054
17,337
22,325
16,974
15,830
19,751
24,393
27,820
35,764
43,967
44,747
46,962
Total Liabilities
51,932
66,829
73,318
88,291
102,333
105,126
113,901
120,120
129,992
140,924
142,859
145,472
Fixed Assets
9,828
9,544
11,638
11,774
11,701
11,973
12,290
20,928
21,021
21,298
20,515
19,604
CWIP
1,895
3,168
2,766
1,670
1,541
1,278
963
906
926
1,205
1,234
1,564
Investments
1,897
3,434
1,662
22,822
41,980
36,008
29,330
26,356
29,373
30,485
37,163
31,762
Other Assets
38,312
50,682
57,252
52,025
47,111
55,867
71,318
71,930
78,672
87,936
83,947
92,542
Total Assets
51,932
66,829
73,318
88,291
102,333
105,126
113,901
120,120
129,992
140,924
142,859
145,472
Reserves and Borrowings Chart
Cash Flow
Month
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Mar 2024
Cash from Operating Activity
11,615
14,751
19,369
19,109
25,223
25,067
28,593
32,369
38,802
39,949
41,965
44,338
Cash from Investing Activity
-6,038
-9,452
-1,807
-5,010
-16,895
3,104
1,645
8,968
-7,956
-738
548
6,091
Cash from Financing Activity
-5,729
-5,673
-17,168
-9,666
-11,026
-26,885
-27,897
-39,915
-32,634
-33,581
-47,878
-48,536
Net Cash Flow
-152
-374
394
4,433
-2,698
1,286
2,341
1,422
-1,788
5,630
-5,365
1,893
Free Cash Flow
Month
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Mar 2024
Free Cash Flow
-314.00
-272.00
-334.00
-215.00
-257.00
-215.00
-23.00
34.00
39.00
46.00
52.00
56.00
Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)
Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.
Fair Value of Tata Consultancy Services Ltd as of October 5, 2024 is: ₹4,212.27
Calculation basis:
Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.
As of October 5, 2024, Tata Consultancy Services Ltd is Overvalued by 0.93% compared to the current share price ₹4,252.00
Intrinsic Value of Tata Consultancy Services Ltd as of October 5, 2024 is: ₹4,552.03
Calculation basis:
Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.
This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.
As of October 5, 2024, Tata Consultancy Services Ltd is Undervalued by 7.06% compared to the current share price ₹4,252.00
Last 5 Year EPS CAGR: 8.07%
*Investments are subject to market risks
Strength and Weakness
Strength
Weakness
The stock has a high average ROCE of 51.00%, which is a positive sign.
The company has higher reserves (75,621.67 cr) compared to borrowings (3,443.83 cr), indicating strong financial stability.
The company has shown consistent growth in sales (150.08 cr) and profit (40.38 cr) over the years.
The stock has a high average Working Capital Days of 53.75, which may not be favorable.
The stock has a high average Cash Conversion Cycle of 76.25, which may not be favorable.
Stock Analysis
Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Tata Consultancy Services Ltd:
Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
ROE%: 50.73% (Industry Average ROE: 17.17%)
ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
Stock P/E: 32.3 (Industry average Stock P/E: 119.59)
Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
Total Debt / Equity: 0
Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions. Stock Rating:
About the Company - Qualitative Analysis
Tata Consultancy Services Ltd. is a Public Limited Listed company incorporated on 19/01/1995 and has its registered office in the State of Maharashtra, India. Company’s Corporate Identification Number(CIN) is L22210MH1995PLC084781 and registration number is 084781. Currently Company is involved in the business activities of Computer programming, consultancy and related activities. Company’s Total Operating Revenue is Rs. 160341.00 Cr. and Equity Capital is Rs. 366.00 Cr. for the Year ended 31/03/2022.
Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Tata Consultancy Services Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE
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