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Last Updated on: 22 February, 2024|Author: Getaka | Social: X Twitter Profile
Stock Ticker - BSE: 532540 | NSE: TCS

Fundamental Analysis of Tata Consultancy Services Ltd

About the Company - Tata Consultancy Services Ltd (TCS)

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. N ChandrasekaranChairman
Mr. K KrithivasanManaging Director & CEO
Mr. N G SubramaniamExe.Director & COO
Ms. Aarthi SubramanianNon Exe.Non Ind.Director
Mr. Keki M MistryInd. Non-Executive Director
Mr. O P BhattInd. Non-Executive Director
Dr. Pradeep Kumar KhoslaInd. Non-Executive Director
Ms. Hanne SorensenInd. Non-Executive Director
Mr. Don CallahanInd. Non-Executive Director

Tata Consultancy Services Ltd. Share Price Update

Share PriceValue
Today₹4,130.00
Previous Day₹4,135.55

Basic Stock Data of Tata Consultancy Services Ltd

Market Cap 14,77,671 Cr.
Current Price 4,038
High / Low4,185/3,070
Stock P/E32.4
Book Value 275
Dividend Yield1.19 %
ROCE58.7 %
ROE46.9 %
Face Value 1.00

Data Source: screener.in

Competitors of Tata Consultancy Services Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
63 Moons Technologies Ltd 2,426 Cr. 526691/16212.3 7040.38 %1.99 %1.43 % 2.00
Melstar Information Technologies Ltd 7.28 Cr. 5.106.30/1.85 2.770.00 %177 %% 10.0
Sasken Technologies Ltd 2,624 Cr. 1,7431,820/77033.4 4991.42 %17.1 %13.8 % 10.0
Newgen Software Technologies Ltd 10,728 Cr. 766901/21350.5 69.10.33 %24.0 %20.0 % 10.0
Avance Technologies Ltd 277 Cr. 1.401.40/0.04102 1.880.00 %%% 1.00
Industry Average59.66 Cr259.939.64255.350.43%44.02%7.05%6.6

Tata Consultancy Services Ltd (TCS) Quarterly Results

MonthSep 2020Dec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023
Sales40,13542,01543,70545,41146,86748,88550,59152,75855,30958,22959,16259,38159,692
Expenses28,62229,80730,90432,74833,75135,45236,74639,34240,79342,67643,38844,38343,946
Operating Profit11,51312,20812,80112,66313,11613,43313,84513,41614,51615,55315,77414,99815,746
OPM %29%29%29%28%28%27%27%25%26%27%27%25%26%
Other Income-3046919317211,1111,2059817899655201,1751,3971,006
Interest174183138146142251245199148160272163159
Depreciation9981,0241,0671,0751,1161,1961,2171,2301,2371,2691,2861,2431,263
Profit before tax10,03711,69212,52712,16312,96913,19113,36412,77614,09614,64415,39114,98915,330
Tax %25%25%26%26%26%26%25%25%26%26%26%26%26%
Net Profit7,5048,7279,2829,0319,6539,8069,9599,51910,46510,88311,43611,12011,380
EPS in Rs19.9223.1925.0024.3526.0226.4127.1325.9028.5129.6431.1330.2631.00

Tata Consultancy Services Ltd Quarterly Chart

Tata Consultancy Services Ltd (TCS) Profit & Loss

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales48,89462,98981,80994,648108,646117,966123,104146,463156,949164,177191,754225,458236,464
Expenses34,45944,95056,65770,16777,96985,65590,588106,957114,840117,631138,697166,199174,393
Operating Profit14,43518,04025,15324,48230,67732,31132,51639,50642,10946,54653,05759,25962,071
OPM %30%29%31%26%28%27%26%27%27%28%28%26%26%
Other Income4281,1781,6373,7203,0844,2213,6424,3114,5921,9164,0183,4494,098
Interest224839104333252198924637784779754
Depreciation9181,0801,3491,7991,8881,9872,0142,0563,5294,0654,6045,0225,061
Profit before tax13,92318,09025,40226,29831,84034,51334,09241,56342,24843,76051,68756,90760,354
Tax %24%22%24%24%24%24%24%24%23%26%26%26%
Net Profit10,52314,07619,33220,06024,33826,35725,88031,56232,44732,56238,44942,30344,819
EPS in Rs26.6035.5548.9250.6861.5866.7167.4683.8786.1987.67104.75115.19122.03
Dividend Payout %47%31%33%78%35%35%37%36%85%43%41%100%

Tata Consultancy Services Ltd Profit & Loss Yearly Chart

YoY Net Profit Growth
Year2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)33.76%37.34%3.77%21.33%8.30%-1.81%21.96%2.80%0.35%18.08%10.02%
Change in YoY Net Profit Growth (%)0.00%3.58%-33.57%17.56%-13.03%-10.11%23.76%-19.15%-2.45%17.72%-8.06%

Tata Consultancy Services Ltd Growth

Compounded Sales Growth
10 Years:14%
5 Years:13%
3 Years:13%
TTM:10%
Compounded Profit Growth
10 Years:12%
5 Years:10%
3 Years:9%
TTM:12%
Stock Price CAGR
10 Years:14%
5 Years:16%
3 Years:11%
1 Year:17%
Return on Equity
10 Years:39%
5 Years:41%
3 Years:43%
Last Year:47%

Tata Consultancy Services Ltd (TCS) Balance Sheet

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Sep 2023
Equity Capital196196196196197197191375375370366366366
Reserves29,28438,35048,99950,43970,87586,01784,93789,07183,75186,06388,77390,058100,315
Preference Capital1001000000000000
Borrowings127232297358245289247628,1747,7957,8187,6887,764
Other Liabilities11,55113,15417,33722,32516,97415,83019,75124,39327,82035,76443,96744,74746,495
Total Liabilities41,15751,93266,82973,31888,291102,333105,126113,901120,120129,992140,924142,859154,940
Fixed Assets8,6629,8289,54411,63811,77411,70111,97312,29020,92821,02121,29820,51519,568
CWIP1,4461,8953,1682,7661,6701,5411,2789639069261,2051,2341,408
Investments1,3501,8973,4341,66222,82241,98036,00829,33026,35629,37330,48537,16344,083
Other Assets29,69838,31250,68257,25252,02547,11155,86771,31871,93078,67287,93683,94789,881
Total Assets41,15751,93266,82973,31888,291102,333105,126113,901120,120129,992140,924142,859154,940

Tata Consultancy Services Ltd Reserves and Borrowings Chart

Tata Consultancy Services Ltd Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Cash from Operating Activity 7,12711,61514,75119,36919,10925,22325,06728,59332,36938,80239,94941,965
Cash from Investing Activity -2,727-6,038-9,452-1,807-5,010-16,8953,1041,6458,968-7,956-738548
Cash from Financing Activity -3,955-5,729-5,673-17,168-9,666-11,026-26,885-27,897-39,915-32,634-33,581-47,878
Net Cash Flow445-152-3743944,433-2,6981,2862,3411,422-1,7885,630-5,365

Tata Consultancy Services Ltd (TCS) Financial Efficiency Indicators

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Debtor Days868281798170746871678081
Inventory Days
Days Payable
Cash Conversion Cycle868281798170746871678081
Working Capital Days457052336263617067623633
ROCE %50%52%56%50%51%44%39%47%47%49%54%59%

Tata Consultancy Services Ltd Financial Efficiency Indicators Chart

Tata Consultancy Services Ltd (TCS) Share Holding Pattern

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Promoters72.19%72.19%72.19%72.19%72.30%72.30%72.30%72.30%72.30%72.30%72.30%72.41%
FIIs15.62%15.43%15.37%14.98%14.15%13.50%13.05%12.94%12.72%12.46%12.47%12.46%
DIIs7.83%7.97%7.89%7.93%7.81%8.36%8.53%9.25%9.58%9.80%10.01%10.03%
Government0.06%0.04%0.04%0.04%0.04%0.05%0.05%0.05%0.05%0.05%0.05%0.05%
Public4.31%4.38%4.51%4.86%5.70%5.80%6.06%5.45%5.36%5.38%5.17%5.03%
No. of Shareholders10,58,90111,30,83412,28,54015,77,35824,74,31025,02,38527,03,96625,56,97024,99,38425,02,83523,67,00323,36,016

Tata Consultancy Services Ltd Shareholding Pattern Chart

No. of Tata Consultancy Services Ltd Shareholders

Tata Consultancy Services Ltd Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)
SBI Nifty 50 ETF186422204.057071.74
SBI S&P BSE Sensex ETF133554414.715068.32
Axis ELSS Tax Saver Fund62048737.062367.75
UTI Nifty 50 ETF51418124.051950.5
Axis Bluechip Fund45658085.331742.29
UTI S&P BSE Sensex ETF45529734.711727.83
ICICI Prudential Technology Fund445355014.231689.41
Tata Digital India Fund381023815.591445.38
Kotak Flexicap Fund - Regular Plan29860042.541132.71
Axis Focused 25 Fund27928447.691065.74

Tata Consultancy Services Ltd ROCE Trend

Tata Consultancy Services Ltd EPS Trend

Tata Consultancy Services Ltd Key Financial Ratios

MonthMar 23Mar 22Mar 21Mar 20Mar 19
FaceValue1.001.001.001.001.00
Basic EPS (Rs.)115.19103.6286.7186.1983.05
Diluted EPS (Rs.)115.19103.6286.7186.1983.05
Cash EPS (Rs.)129.30117.6398.9995.9489.65
Book Value[Excl.RevalReserv]/Share (Rs.)249.20245.48235.43226.00239.73
Book Value[Incl.RevalReserv]/Share (Rs.)249.20245.48235.43226.00239.73
Revenue From Operations / Share (Rs.)616.01523.92443.72418.53390.57
PBDIT / Share (Rs.)171.33155.94134.27124.54116.85
PBIT / Share (Rs.)157.61143.36123.28115.13111.36
PBT / Share (Rs.)155.48141.22118.27112.66110.83
Net Profit / Share (Rs.)115.58105.0588.0186.5384.17
NP After MI And SOA / Share (Rs.)115.16104.7287.6586.2483.93
PBDIT Margin (%)27.8129.7630.2629.7529.91
PBIT Margin (%)25.5827.3627.7827.5028.51
PBT Margin (%)25.2426.9526.6526.9128.37
Net Profit Margin (%)18.7620.0519.8320.6721.54
NP After MI And SOA Margin (%)18.6919.9819.7520.6021.48
Return on Networth / Equity (%)46.6142.9937.5238.4435.18
Return on Capital Employeed (%)57.6352.9147.2146.0044.97
Return On Assets (%)29.3327.0824.8026.7427.38
Asset Turnover Ratio (%)1.461.271.181.191.20
Current Ratio (X)2.532.562.913.334.17
Quick Ratio (X)2.532.562.913.334.17
Dividend Payout Ratio (NP) (%)98.1034.7433.45116.3632.03
Dividend Payout Ratio (CP) (%)87.6531.0129.73104.9230.07
Earning Retention Ratio (%)1.9065.2666.55-16.3667.97
Cash Earning Retention Ratio (%)12.3568.9970.27-4.9269.93
Interest Coverage Ratio (X)80.5072.8077.9950.54221.30
Interest Coverage Ratio (Post Tax) (X)55.3050.0454.0336.12160.40
Enterprise Value (Cr.)1163072.801350886.801167058.00674600.75737799.00
EV / Net Operating Revenue (X)5.167.047.114.305.04
EV / EBITDA (X)18.5523.6723.4914.4516.84
MarketCap / Net Operating Revenue (X)5.207.147.164.365.12
Retention Ratios (%)1.8965.2566.54-16.3667.96
Price / BV (X)12.9815.3513.608.138.39
Price / Net Operating Revenue (X)5.207.147.164.365.12
EarningsYield0.030.020.020.040.04

Tata Consultancy Services Ltd Profitability Ratios (%)

Tata Consultancy Services Ltd Liquidity Ratios

Tata Consultancy Services Ltd Liquidity Ratios (%)

Tata Consultancy Services Ltd Interest Coverage Ratios (X)

Tata Consultancy Services Ltd Valuation Ratios

Fair Value / Intrinsic Value of Tata Consultancy Services Ltd

Fair Value: ₹4228.52

The stock is undervalued by 4.72% compared to the current price ₹4038

*Investments are subject to market risks

Strength and Weakness of Tata Consultancy Services Ltd

StrengthWeakness
  1. The stock has a high average ROCE of 49.83%, which is a positive sign.
  2. The company has higher reserves (72,840.92 cr) compared to borrowings (15.38 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (134.85 cr) and profit (36.46 cr) over the years.
  1. The stock is trading at a high valuation with an average P/B ratio of 130.15 and average Dividend Yield of 27.35%.
  2. The stock has a high average Working Capital Days of 54.50, which may not be favorable.
  3. The stock has a high average Cash Conversion Cycle of 76.67, which may not be favorable.

Should I Buy Tata Consultancy Services Ltd Share Now?

  • Considering various financial indicators, investors might exercise caution regarding investment in Tata Consultancy Services Ltd:
    1. Net Profit Margin: 18.76%
      • 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: 57.63% (Industry Average ROCE: 9.85%)
      • 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. Interest Coverage Ratio (Post Tax): 55.30
      • 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.
    4. Quick Ratio: 2.53
      • 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.
    5. ✗ Stock P/E: 32.4 (Industry average Stock P/E: 25.42)
      • 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.
    6. ✗ Total Debt / Equity: N/A
      • 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 suggests exercising caution. It's advisable to conduct further research or consult with financial experts before considering any investment.

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