NSEI:TCS

Stock Analysis Report

Tata Consultancy Services

Executive Summary

Tata Consultancy Services Limited provides information technology (IT) and IT enabled services worldwide.

Snowflake

Fundamentals

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Tata Consultancy Services's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TCS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.6%

TCS

-2.5%

IN IT

-1.1%

IN Market


1 Year Return

8.6%

TCS

7.3%

IN IT

5.5%

IN Market

Return vs Industry: TCS exceeded the Indian IT industry which returned 7.3% over the past year.

Return vs Market: TCS exceeded the Indian Market which returned 5.5% over the past year.


Shareholder returns

TCSIndustryMarket
7 Day-4.6%-2.5%-1.1%
30 Day5.7%1.6%5.8%
90 Day-4.7%-2.7%9.0%
1 Year12.4%8.6%10.2%7.3%7.6%5.5%
3 Year111.4%98.1%83.8%72.9%32.3%25.6%
5 Year79.3%62.5%59.7%44.8%39.1%26.3%

Price Volatility Vs. Market

How volatile is Tata Consultancy Services's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Tata Consultancy Services undervalued compared to its fair value and its price relative to the market?

24.33x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TCS (₹2100.95) is trading above our estimate of fair value (₹970.73)

Significantly Below Fair Value: TCS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TCS is poor value based on its PE Ratio (24.3x) compared to the IT industry average (10.7x).

PE vs Market: TCS is poor value based on its PE Ratio (24.3x) compared to the Indian market (13.2x).


Price to Earnings Growth Ratio

PEG Ratio: TCS is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: TCS is overvalued based on its PB Ratio (8.1x) compared to the IN IT industry average (0.9x).


Next Steps

Future Growth

How is Tata Consultancy Services forecast to perform in the next 1 to 3 years based on estimates from 38 analysts?

9.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TCS's forecast earnings growth (9.2% per year) is above the savings rate (7.6%).

Earnings vs Market: TCS's earnings (9.2% per year) are forecast to grow slower than the Indian market (18.9% per year).

High Growth Earnings: TCS's earnings are forecast to grow, but not significantly.

Revenue vs Market: TCS's revenue (9.1% per year) is forecast to grow slower than the Indian market (11.1% per year).

High Growth Revenue: TCS's revenue (9.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TCS's Return on Equity is forecast to be high in 3 years time (36%)


Next Steps

Past Performance

How has Tata Consultancy Services performed over the past 5 years?

9.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TCS has a high level of non-cash earnings.

Growing Profit Margin: TCS's current net profit margins (21.2%) are lower than last year (21.4%).


Past Earnings Growth Analysis

Earnings Trend: TCS's earnings have grown by 9.2% per year over the past 5 years.

Accelerating Growth: TCS's earnings growth over the past year (13%) exceeds its 5-year average (9.2% per year).

Earnings vs Industry: TCS earnings growth over the past year (13%) exceeded the IT industry 10.3%.


Return on Equity

High ROE: TCS's Return on Equity (33.3%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Tata Consultancy Services's financial position?


Financial Position Analysis

Short Term Liabilities: TCS's short term assets (₹984.9B) exceeds its short term liabilities (₹238.4B)

Long Term Liabilities: TCS's short term assets (984.9B) exceeds its long term liabilities (79.4B)


Debt to Equity History and Analysis

Debt Level: TCS is debt free.

Reducing Debt: TCS has no debt compared to 5 years ago when its debt to equity ratio was 0.1%.

Debt Coverage: TCS has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: TCS has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: TCS has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if TCS's debt is covered by short term assets.


Next Steps

Dividend

What is Tata Consultancy Services's current dividend yield, its reliability and sustainability?

1.43%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%0.6%markettop25%2.4%industryaverage1.6%forecastin3Years3.4%

Current dividend yield vs market & industry

Notable Dividend: TCS's dividend (1.43%) is higher than the bottom 25% of dividend payers in the Indian market (0.56%).

High Dividend: TCS's dividend (1.43%) is low compared to the top 25% of dividend payers in the Indian market (2.36%).


Stability and Growth of Payments

Stable Dividend: TCS's dividends per share have been stable in the past 10 years.

Growing Dividend: TCS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.1%), TCS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TCS's dividends in 3 years are forecast to be covered by earnings (69.6% payout ratio).


Next Steps

Management

What is the CEO of Tata Consultancy Services's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Rajesh Gopinathan (48yo)

2.8yrs

Tenure

₹160,285,000

Compensation

Mr. Rajesh Gopinathan, PGDM has been the Chief Executive Officer, Managing Director and Executive Director at Tata Consultancy Services Limited since February 21, 2017. Mr. Gopinathan served as the Chief F ...


CEO Compensation Analysis

Compensation vs Market: Rajesh's total compensation ($USD2.24M) is above average for companies of similar size in the Indian market ($USD1.15M).

Compensation vs Earnings: Rajesh's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.8yrs

Average Tenure

58.5yo

Average Age

Experienced Management: TCS's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

2.8yrs

Average Tenure

60yo

Average Age

Experienced Board: TCS's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: TCS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buy₹1,011,00018 Oct 19
Rajesh Gopinathan
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Executive Director
Shares500
Max Price₹2,022.00
Sell₹1,114,15719 Aug 19
Radhika Ravichandran
EntityIndividual
Shares500
Max Price₹2,228.31
Sell₹6,003,39315 May 19
Suresh Menon
EntityIndividual
Shares2,784
Max Price₹2,156.39
Sell₹2,144,98025 Apr 19
Ganesan Krishnamurthy
EntityIndividual
Shares1,000
Max Price₹2,154.61
Buy₹6,991,98629 Nov 18
Milind Lakkad
EntityIndividual
Shares3,730
Max Price₹1,884.62

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Rajendra Moholkar (60yo)

    Compliance Officer & Company Secretary

    • Tenure: 2.6yrs
    • Compensation: ₹14.02m
  • Ravi P. Viswanathan (57yo)

    Chief Marketing Officer

    • Tenure: 2.3yrs
  • NGS Subramaniam (60yo)

    COO & Executive Director

    • Tenure: 2.8yrs
    • Compensation: ₹116.11m
  • Ramki Ramakrishnan (61yo)

    Chief Financial Officer

    • Tenure: 2.8yrs
    • Compensation: ₹41.31m
  • K. Krishnan (56yo)

    Chief Technology Officer

    • Tenure: 0yrs
  • Rajesh Gopinathan (48yo)

    CEO, MD & Executive Director

    • Tenure: 2.8yrs
    • Compensation: ₹160.29m
  • Kamal Bhadada

    Head of Communication

    • Tenure: 0yrs
  • Kedar Shirali

    Head of Global Investor Relations

    • Tenure: 0yrs
  • Vivek Padiyar

    Head of Corporate Communications

    • Tenure: 0yrs
  • Madhav Anchan

    General Counsel

    • Tenure: 0yrs

Board Members

  • Om Bhatt (68yo)

    Independent Non-Executive Director

    • Tenure: 7.6yrs
    • Compensation: ₹22.25m
  • NGS Subramaniam (60yo)

    COO & Executive Director

    • Tenure: 2.8yrs
    • Compensation: ₹116.11m
  • Natarajan Chandrasekaran (56yo)

    Non-Independent Non-Executive Chairman

    • Tenure: 2.8yrs
    • Compensation: ₹360.00k
  • Pradeep Khosla (62yo)

    Additional Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: ₹15.21m
  • Rajesh Gopinathan (48yo)

    CEO, MD & Executive Director

    • Tenure: 2.8yrs
    • Compensation: ₹160.29m
  • Aarthi Subramanian (52yo)

    Non-Executive Director

    • Tenure: 4.7yrs
    • Compensation: ₹570.00k
  • Hanne Birgitte Sorensen (54yo)

    Independent Director

    • Tenure: 0.9yrs
    • Compensation: ₹5.06m
  • Keki Mistry (65yo)

    Independent Director

    • Tenure: 0.9yrs
    • Compensation: ₹5.06m
  • Don Callahan (63yo)

    Additional & Independent Director

    • Tenure: 0.8yrs
    • Compensation: ₹3.53m

Company Information

Tata Consultancy Services Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Tata Consultancy Services Limited
  • Ticker: TCS
  • Exchange: NSEI
  • Founded: 1968
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: ₹7.884t
  • Shares outstanding: 3.75b
  • Website: https://www.tcs.com

Number of Employees


Location

  • Tata Consultancy Services Limited
  • Nirmal Building
  • 9th Floor
  • Mumbai
  • Maharashtra
  • 400021
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
532540BSE (Mumbai Stock Exchange)YesEquity SharesININRAug 2004
TCSNSEI (National Stock Exchange of India)YesEquity SharesININRAug 2004

Biography

Tata Consultancy Services Limited provides information technology (IT) and IT enabled services worldwide. It operates through Banking, Financial Services and Insurance; Manufacturing; Retail and Consumer B ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/12 12:50
End of Day Share Price2019/11/11 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.