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Last Updated on: 21 November, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo
Stock Ticker - BSE: 532540 | NSE: TCS

Tata Consultancy Services Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: November 21, 2024, 10:12 pm

Market Cap 14,73,684 Cr.
Current Price 4,073
High / Low4,592/3,432
Stock P/E30.6
Book Value 281
Dividend Yield1.35 %
ROCE64.3 %
ROE51.5 %
Face Value 1.00
PEG Ratio3.79

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Tata Consultancy Services Ltd

Competitors of Tata Consultancy Services Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
IDream Film Infrastructure Company Ltd 1.41 Cr. 93.899.0/85.0 2950.00 %%% 10.0
IB Infotech Enterprises Ltd 23.4 Cr. 182245/11030.7 16.80.55 %69.9 %50.5 % 10.0
Hit Kit Global Solutions Ltd 6.54 Cr. 1.411.41/0.5820.4 2.080.00 %1.92 %1.94 % 2.00
Globalspace Technologies Ltd 59.5 Cr. 17.327.0/16.2180 11.20.00 %%% 10.0
First Fintec Ltd 8.64 Cr. 8.3010.9/4.51 10.20.00 %2.41 %1.77 % 10.0
Industry Average39,977.65 Cr703.7691.08122.740.67%18.02%18.80%6.94

All Competitor Stocks of Tata Consultancy Services Ltd

Quarterly Result

MonthJun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Sales45,41146,86748,88550,59152,75855,30958,22959,16259,38159,69260,58361,23762,613
Expenses32,74833,75135,45236,74639,34240,79342,67643,38844,38343,94644,19544,07345,951
Operating Profit12,66313,11613,43313,84513,41614,51615,55315,77414,99815,74616,38817,16416,662
OPM %28%28%27%27%25%26%27%27%25%26%27%28%27%
Other Income7211,1111,2059817899655201,1751,3971,006-961,157962
Interest146142251245199148160272163159230226173
Depreciation1,0751,1161,1961,2171,2301,2371,2691,2861,2431,2631,2331,2461,220
Profit before tax12,16312,96913,19113,36412,77614,09614,64415,39114,98915,33014,82916,84916,231
Tax %26%26%26%25%25%26%26%26%26%26%25%26%25%
Net Profit9,0319,6539,8069,9599,51910,46510,88311,43611,12011,38011,09712,50212,105
EPS in Rs24.3526.0226.4127.1325.9028.5129.6431.1330.2631.0030.5634.3733.28

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024TTM
Sales62,98981,80994,648108,646117,966123,104146,463156,949164,177191,754225,458240,893244,125
Expenses44,95056,65770,16777,96985,65590,588106,957114,840117,631138,697166,199176,597178,165
Operating Profit18,04025,15324,48230,67732,31132,51639,50642,10946,54653,05759,25964,29665,960
OPM %29%31%26%28%27%26%27%27%28%28%26%27%27%
Other Income1,1781,6373,7203,0844,2213,6424,3114,5921,9164,0183,4493,4643,029
Interest4839104333252198924637784779778788
Depreciation1,0801,3491,7991,8881,9872,0142,0563,5294,0654,6045,0224,9854,962
Profit before tax18,09025,40226,29831,84034,51334,09241,56342,24843,76051,68756,90761,99763,239
Tax %22%24%24%24%24%24%24%23%26%26%26%26%
Net Profit14,07619,33220,06024,33826,35725,88031,56232,44732,56238,44942,30346,09947,084
EPS in Rs35.5548.9250.6861.5866.7167.4683.8786.1987.67104.75115.19126.88129.21
Dividend Payout %31%33%78%35%35%37%36%85%43%41%100%58%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)37.34%3.77%21.33%8.30%-1.81%21.96%2.80%0.35%18.08%10.02%8.97%
Change in YoY Net Profit Growth (%)0.00%-33.57%17.56%-13.03%-10.11%23.76%-19.15%-2.45%17.72%-8.06%-1.05%

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:8%
Stock Price CAGR
10 Years:12%
5 Years:14%
3 Years:6%
1 Year:16%
Return on Equity
10 Years:40%
5 Years:44%
3 Years:47%
Last Year:52%

Last Updated: Unknown

Balance Sheet

Last Updated: October 15, 2024, 3:49 pm

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024Sep 2024
Equity Capital196196196197197191375375370366366362362
Reserves38,35048,99950,43970,87586,01784,93789,07183,75186,06388,77390,05890,127101,133
Borrowings332297358245289247628,1747,7957,8187,6888,0219,046
Other Liabilities13,05417,33722,32516,97415,83019,75124,39327,82035,76443,96744,74746,96250,583
Total Liabilities51,93266,82973,31888,291102,333105,126113,901120,120129,992140,924142,859145,472161,124
Fixed Assets9,8289,54411,63811,77411,70111,97312,29020,92821,02121,29820,51519,60420,729
CWIP1,8953,1682,7661,6701,5411,2789639069261,2051,2341,5641,500
Investments1,8973,4341,66222,82241,98036,00829,33026,35629,37330,48537,16331,76236,081
Other Assets38,31250,68257,25252,02547,11155,86771,31871,93078,67287,93683,94792,542102,814
Total Assets51,93266,82973,31888,291102,333105,126113,901120,120129,992140,924142,859145,472161,124

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity +11,61514,75119,36919,10925,22325,06728,59332,36938,80239,94941,96544,338
Cash from Investing Activity +-6,038-9,452-1,807-5,010-16,8953,1041,6458,968-7,956-7385486,091
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-152-3743944,433-2,6981,2862,3411,422-1,7885,630-5,3651,893

Free Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow-314.00-272.00-334.00-215.00-257.00-215.00-23.0034.0039.0046.0052.0056.00

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.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days828179817074687167808181
Inventory Days
Days Payable
Cash Conversion Cycle828179817074687167808181
Working Capital Days705233626361706762363336
ROCE %52%56%50%51%44%39%47%47%49%54%59%64%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthSep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Promoters72.19%72.19%72.30%72.30%72.30%72.30%72.30%72.30%72.30%72.41%71.77%71.77%
FIIs15.37%14.98%14.15%13.50%13.05%12.94%12.72%12.46%12.47%12.46%12.70%12.35%
DIIs7.89%7.93%7.81%8.36%8.53%9.25%9.58%9.80%10.01%10.03%10.61%11.00%
Government0.04%0.04%0.04%0.05%0.05%0.05%0.05%0.05%0.05%0.05%0.06%0.06%
Public4.51%4.86%5.70%5.80%6.06%5.45%5.36%5.38%5.17%5.03%4.86%4.82%
No. of Shareholders12,28,54015,77,35824,74,31025,02,38527,03,96625,56,97024,99,38425,02,83523,67,00323,36,01622,03,20921,81,391

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
SBI Nifty 50 ETF18,409,8463.717187.483,183,8732024-11-20478.22%
SBI BSE Sensex ETF13,234,9034.365168.163,183,8732024-11-20315.69%
Axis ELSS Tax Saver Fund5,465,0665.752133.643,183,8732024-11-2071.65%
UTI Nifty 50 ETF5,320,4183.712077.173,183,8732024-11-2067.11%
UTI BSE Sensex ETF4,843,0074.361891.173,183,8732024-11-2052.11%
SBI Blue Chip Fund4,562,3313.621781.23,183,8732024-11-2043.3%
Axis Bluechip Fund4,071,2514.61589.483,183,8732024-11-2027.87%
ICICI Prudential Technology Fund3,930,15512.111534.393,183,8732024-11-2023.44%
HDFC Balanced Advantage Fund - Regular Plan3,238,8721.411264.53,183,8732024-11-201.73%
Tata Digital India Fund3,183,87312.181243.033,183,8732024-11-200%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue1.001.001.001.001.00
Basic EPS (Rs.)125.88115.19103.6286.7186.19
Diluted EPS (Rs.)125.88115.19103.6286.7186.19
Cash EPS (Rs.)141.12129.30117.6398.9995.94
Book Value[Excl.RevalReserv]/Share (Rs.)252.26249.20245.48235.43226.00
Book Value[Incl.RevalReserv]/Share (Rs.)252.26249.20245.48235.43226.00
Revenue From Operations / Share (Rs.)665.45616.01523.92443.72418.53
PBDIT / Share (Rs.)189.83171.33155.94134.27124.54
PBIT / Share (Rs.)176.06157.61143.36123.28115.13
PBT / Share (Rs.)171.26155.48141.22118.27112.66
Net Profit / Share (Rs.)127.35115.58105.0588.0186.53
NP After MI And SOA / Share (Rs.)126.82115.16104.7287.6586.24
PBDIT Margin (%)28.5227.8129.7630.2629.75
PBIT Margin (%)26.4525.5827.3627.7827.50
PBT Margin (%)25.7325.2426.9526.6526.91
Net Profit Margin (%)19.1318.7620.0519.8320.67
NP After MI And SOA Margin (%)19.0518.6919.9819.7520.60
Return on Networth / Equity (%)50.7346.6142.9937.5238.44
Return on Capital Employeed (%)63.5157.6352.9147.2146.00
Return On Assets (%)31.3429.3327.0824.8026.74
Asset Turnover Ratio (%)1.661.581.411.181.19
Current Ratio (X)2.452.532.562.913.33
Quick Ratio (X)2.452.532.562.913.33
Dividend Payout Ratio (NP) (%)54.7598.1034.7433.45116.36
Dividend Payout Ratio (CP) (%)49.3987.6531.0129.73104.92
Earning Retention Ratio (%)45.251.9065.2666.55-16.36
Cash Earning Retention Ratio (%)50.6112.3568.9970.27-4.92
Interest Coverage Ratio (X)88.3380.5072.8077.9950.54
Interest Coverage Ratio (Post Tax) (X)61.4855.3050.0454.0336.12
Enterprise Value (Cr.)1393389.101163072.801350886.801167058.00674600.75
EV / Net Operating Revenue (X)5.785.167.047.114.30
EV / EBITDA (X)20.2818.5523.6723.4914.45
MarketCap / Net Operating Revenue (X)5.845.207.147.164.36
Retention Ratios (%)45.241.8965.2566.54-16.36
Price / BV (X)15.5412.9815.3513.608.13
Price / Net Operating Revenue (X)5.845.207.147.164.36
EarningsYield0.030.030.020.020.04

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Tata Consultancy Services Ltd as of November 21, 2024 is: 4,488.06

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 November 21, 2024, Tata Consultancy Services Ltd is Undervalued by 10.19% compared to the current share price 4,073.00

Intrinsic Value of Tata Consultancy Services Ltd as of November 21, 2024 is: 4,850.07

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 November 21, 2024, Tata Consultancy Services Ltd is Undervalued by 19.08% compared to the current share price 4,073.00

Last 5 Year EPS CAGR: 8.07%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 51.00%, which is a positive sign.
  2. The company has higher reserves (77,584.08 cr) compared to borrowings (3,874.77 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (150.08 cr) and profit (40.38 cr) over the years.
  1. The stock has a high average Working Capital Days of 53.75, which may not be favorable.
  2. 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:
    1. Net Profit Margin: 19.13%
      • 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.
    2. ROCE: 63.51% (Industry Average ROCE: 18.02%)
      • 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.
    3. ROE%: 50.73% (Industry Average ROE: 18.8%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 61.48
      • 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.
    5. Quick Ratio: 2.45
      • 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.
    6. Stock P/E: 30.6 (Industry average Stock P/E: 91.08)
      • 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.
    7. 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.
INDUSTRYADDRESSCONTACT
IT Consulting & Software9th Floor, Mumbai Maharashtra 400021investor.relations@tcs.com
https://www.tcs.com
Management
NamePosition Held
Mr. Keki M MistryInd. Non-Executive Director
Mr. N ChandrasekaranChairman
Mr. K KrithivasanManaging Director & CEO
Mr. N G SubramaniamExe.Director & COO
Ms. Aarthi SubramanianNon Exe.Non Ind.Director
Mr. O P BhattInd. Non-Executive Director
Dr. Pradeep Kumar KhoslaInd. Non-Executive Director
Ms. Hanne SorensenInd. Non-Executive Director
Mr. Al-Noor RamjiInd. Non-Executive Director

FAQ

What is the latest intrinsic value of Tata Consultancy Services Ltd?

The latest intrinsic value of Tata Consultancy Services Ltd as on 21 November 2024 is ₹4488.06, which is 10.19% higher than the current market price of ₹4,073.00.

What is the Market Cap of Tata Consultancy Services Ltd?

The Market Cap of Tata Consultancy Services Ltd is 14,73,684 Cr..

What is the current Stock Price of Tata Consultancy Services Ltd as on 21 November 2024?

The current stock price of Tata Consultancy Services Ltd as on 21 November 2024 is ₹4,073.

What is the High / Low of Tata Consultancy Services Ltd stocks in FY 2024?

In FY 2024, the High / Low of Tata Consultancy Services Ltd stocks is 4,592/3,432.

What is the Stock P/E of Tata Consultancy Services Ltd?

The Stock P/E of Tata Consultancy Services Ltd is 30.6.

What is the Book Value of Tata Consultancy Services Ltd?

The Book Value of Tata Consultancy Services Ltd is 281.

What is the Dividend Yield of Tata Consultancy Services Ltd?

The Dividend Yield of Tata Consultancy Services Ltd is 1.35 %.

What is the ROCE of Tata Consultancy Services Ltd?

The ROCE of Tata Consultancy Services Ltd is 64.3 %.

What is the ROE of Tata Consultancy Services Ltd?

The ROE of Tata Consultancy Services Ltd is 51.5 %.

What is the Face Value of Tata Consultancy Services Ltd?

The Face Value of Tata Consultancy Services Ltd is 1.00.

About the Author

Author Avatar
Getaka

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