[Infographics] TCS Stock | 8 Fundamental Reasons Why You Should Invest In TCS Stock

TCS is Tata Consultancy Services. It is formed by Tata Sons Private Limited in 1968. TCS is an IT consultancy and IT services. It is headquartered in Mumbai and has the largest campus located in Mumbai and Tamil Nadu, India.

It is one of the biggest companies in the Information Technology sector. As of February 2021, TCS is the largest IT services company in the world by the Market capitalization of $200 billion.

Tata Consultancy Services is the flagship company and a part of the Tata group. It is an IT services, consulting, and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for over 50 years.

TCS offers a consulting-led, cognitive-powered, integrated portfolio of business, technology, and engineering services and solutions. 

Key Takeaway

Revenue Breakup

Based on Industry classification, the company operates in 5 key verticals i.e. Banking, finance services & insurance (BFSI) which accounts for 39% of revenues, followed by, retail & consumer business (17%), Communication, media & technology (16%), Manufacturing (11%) & other platforms which accounts for the rest 17% of revenues.

Brand Value

TCS’ reputation for customer-centricity, domain depth, and execution excellence has made it the preferred growth and transformation partner to leading corporations across the world. In recent years, TCS has significantly built its presence and strengthened its brand across all major markets. Its brand alone is valued at a value of 13.5 Billion USD.

Geographical Concentration

TCS generates around 52% of total revenues from the Americas clients base, followed by Europe (31%), India (6%) & the rest of the world accounts for the rest 11% of revenues.

Heavy Dividend Payouts

TCS has been a generous payer to shareholders and has paid 70% of its cash flows from FY05 to FY20. It has paid about 80% of its cash flows as dividends since FY15. 

Research & Development

TCS Research and Innovation are strongly aligned with the Company’s vision of Growth and Transformation. It continues to expand its foundational research in core computing areas. In FY20, the company applied for ~5,200 patents and has been granted ~1,350 out of them.
Its innovation labs are located in India and across the world and its R&D expenditure for FY20 was 1,867 crores.

Employee Base

It is recognized as a top employer brand across the major markets it operates in, including North America, Europe, UK, India, Latin America, and Australia, among others. It has an employee base of 450,000+ employees of which about 37% are women.

TCS Today

TATA CONSULTANCY S
TCS.NS
₹ 3,661.95
-0.7897414%
Marketcap
13.40T
Volume
₹ 1,620,879.00
Shares
3,659,049,984
Range
₹ 3,655.55 - ₹ 3,709.85
52 Week Range
₹ 3,004.00 - ₹ 4,043.00
TATA CONSULTANCY S
sector
Technology
industryInformation Technology Services
addressTCS House, Mumbai, India
countryIndia
phone91 22 6778 9999
websitehttp://www.tcs.com
TATA CONSULTANCY S
₹ 3,661.95
Open ₹ 3,707.00
High ₹ 3,709.85
Marketcap 13.40T
Close ₹ 3,661.95
Low ₹ 3,655.55
Volume ₹ 1,620,879.00

TCS Chart

TCS index presence

Tata Consultancy Services present in 40 indices

NIFTYSERVICENIFTYENERGYNIFTY100WEIGHTNIFTYEQWGTNIFTY100NIFTY50NIFTY500
NIFTY200NV20NIFTYCDTYNIFTYINFRASTNIFTYPSENIFTYDIVOPPTNIFTYCPSE
NFTALQLV30NIFTY500VAL50NIFTYGEMID250NIFTYLOWVOLSENSEXBSE500SNSX50
BSEPSULMI250ALLCAPLRGCAPBASE100LARGECAPTMCBHRT22POWER
UTILSCPSESPBSLVIPS&PDIVSTABLESPBSEVIPESG100BSEINFRA
NT100LOW30NFTALL030BSE100CARBONEXS&PLARGEMIDCAP  

Key Takeaway

  • TCS stock has presence in 40 indices list, It shows how fundamentally strong the stock is.

TCS Infographics

TCS infographics by Kamlesh Rode
TCS infographics by Kamlesh Rode, created in Figma.com

Overview of TCS

Overview of TCS infographics
PE RatioSector PEPB RatioSector PBDividend YieldSector Dividend Yield
43.7239.1416.289.440.99%1.11%

Key Takeaways

  • Current price of TCS stock is lower than intrinsic value.
  • TCS stock is generating better return on equity than bank fixed-deposits.
  • TCS offers good stock dividends in return.
  • Stock is not in ASM/GSM lists and not a promoter holding is pledged.

Read more about PE ratio with infographics | Read more about dividend and dividend yield with infographics

Financials of TCS stock

TCS infographics Finance

Income Sheet Table

Financial YearFY 2018FY 2019FY 2020FY 2021
Total Revenue1,26,746.001,50,774.001,61,541.001,67,311.00
EBITDA36,158.0043,817.0046,701.0048,462.00
PBIT34,144.0041,761.0043,172.0044,397.00
PBT34,092.0041,563.0042,248.0043,760.00
Net Income25,826.0031,472.0032,340.0032,430.00
EPS66.4883.0386.1987.04
DPS25307338
Payout ratio0.380.360.850.44
EPS and DPS in ₹. Other numbers except for Payout Ratio in ₹ cr

Key Takeaway

Lower than industry revenue growth

Over the last 5 years, revenue has grown at a yearly rate of 8.41%, vs industry avg of 9.05%

Lower than industry net income

Over the last 5 years, net income has grown at a yearly rate of 5.97%, vs industry avg of 8.18%

Decreasing market share

Over the last 5 years, market share decreased from 32.11% to 32.05%

Key Points

  1. Total revenue growth is good in the year 2018 to 2019.
  2. In year 2020 and 2021, Total revenue growth stayed constant.
  3. Net income is constantly growing.
  4. Earnings per share(EPS) is continuously growing from 2018 to 2021.

Balance Sheet Table

Financial YearFY 2018FY 2019FY 2020FY 2021
Current Assets81,224.0092,131.0090,237.0099,280.00
Non Current Assets23,902.0021,770.0029,883.0030,712.00
Total Assets1,05,126.001,13,901.001,20,120.001,29,992.00
Current Liabilities17,828.0022,084.0027,060.0034,155.00
Non Current Liabilities1,768.001,918.008,311.008,729.00
Total Liabilities19,596.0024,002.0035,371.0042,884.00
Total Equity85,530.0089,899.0084,749.0087,108.00
Total Liabilities & Shareholder’s Equity1,05,126.001,13,901.001,20,120.001,29,992.00
Total Common Shares Outstanding382.86375.24375.24369.91
Shares outstanding numbers in cr. Other numbers in ₹ cr

Key Takeaway

Lower than industry debt-to-equity ratio

Over the last 5 years, the debt to equity ratio has been 3.86%, vs an industry avg of 10.99%

Higher than Industry current ratio

Over the last 5 years, the current ratio has been 410.07%, vs industry avg of 268.1%

Key Points

  1. Current asset is growth is constant and it’s growing throughout, from the year 2018 to 2021.
  2. Total asset of TCS company is now 1,29,992 Crores.

Cash Flow Statement Table

Financial YearFY 2018FY 2019FY 2020FY 2021
Net Change in Cash1,286.002,341.001,422.00-1,788.00
Changes in Working Capital-7,818.00-12,127.00-10,513.00-8,229.00
Capital Expenditures1,862.002,231.002,730.003,075.00
Free Cash Flow23,205.0026,362.0029,639.0035,727.00
All numbers in ₹ cr

Key Takeaway

Lower than industry free cash flow growth

Over the last 5 years, free cash flow growth has been 15.85%, vs an industry avg of 21.91%

Good number of Cash flow

Overall cash flow of TCS company reached to 35,727 Crores

Peers of TCS

TCS infographics peers

Key Takeaway

  • TCS stock company have good PE and PB ratio as compare to peers.
  • Dividend yield is better than HCL and Wipro.
StockPE RatioPB RatioDividend Yield
Tata Consultancy Services Ltd43.7216.280.99%
Infosys36.819.281.61%
HCL Technologies Ltd.31.785.890.77%
Wipro Ltd32.736.420.16%

Shareholders of TCS

TCS infographics - Shareholders

Promoter Holding Trend

Total promoter holding

In last 6 months, promoter holding in the company has almost stayed constant

Low pledged promoter holding

Pledged promoter holdings are insignificant

Institutional Holding Trend

Mutual fund holding

In the last 3 months, the mutual fund holding of the company has almost stayed constant

Foreign institutional holding

In the last 3 months, foreign institutional holding of the company has almost stayed constant

TCS Investors Table

InvestorsSep-18Dec-18Mar-19Jun-19Sep-19Dec-19Mar-20Jun-20Sep-20Dec-20Mar-21Jun-21
Promoters72.0572.0572.0572.0572.0572.0572.0572.0572.0572.0572.1972.19
FIIs16.0515.815.815.8815.5215.915.7415.851615.8815.6215.43
DIIs7.447.687.787.878.218.0488.027.857.717.837.97
Government 0.050.050.050.060.060.060.060.070.070.070.060.04
Public 4.424.424.324.154.173.954.144.014.034.294.314.38

Key Takeaway

  • Total promoter holding reached to more than 72%
  • Mutual funds and other domestic institution have 2% to 4% of shareholding in TCS stock.
  • Foreign Institution (FII) have more than 15% of shareholding in TCS stock.

Dividend and Split

TCS infographics - Dividend and split

Dividend Table

Cash DividendDividend/ShareEx Date
Interim₹7.0015-Jul-21
Cash DividendDividend/ShareEx Date
Final₹15.0025-May-21
Cash DividendDividend/ShareEx Date
Interim 3₹6.0014-Jan-21
Cash DividendDividend/ShareEx Date
Interim 2₹12.0014-Oct-20
Cash DividendDividend/ShareEx Date
Interim₹5.0016-Jul-20

Read more about dividend and dividend yield with infographics

Bonus/Split Table

BuybackRatioEx Date
Tender Offer26-Nov-20
BuybackRatioEx Date
Tender Offer14-Aug-18
BonusRatioEx Date
1:1 Bonus Issue of Equity Shares1:0131-May-18
BuybackRatioEx Date
Tender Offer5-May-17

Key Takeaway

  • In the year 2021, TCS stock company have given dividend thrice. Total dividend per share paid in the year 2021 is Rs.28 per share.
  • TCS company splitted stocks in the year of 2018 by ratio 1:1. There is no split event after 2018.

Read more about stock split and bonus with infographics

Strength and Limitations

Strengths

  • The TCS Company is Virtually Debt Free.
  • The TCS Company has a good ROE track record of 41.55%.
  • The TCS company has effective cash conversion ratio of 109.24.
  • The TCS Company has healthy Operating Margin of 29.65%.

Limitations

  • TCS Stock is trading at 16.41 times its book value
  • The TCS company has delivered a poor sales growth of 8.61% over past five years.

Expert Forecast

TCS infographics - Expert forecast

The stock forecast of TCS stock for the year 2022

High

Rs. 4518

MEDIAN

Rs. 3762

LOW

Rs. 2712

Future stock price targets of TCS stock

The target of TCS Stock(Year)Future Stock Price(Rs.)
20224281 to 4550
20254883 to 6500
20309822 to 11500
203516155 to 18600
204025600 to 32150

Please Note

These are the stock forecast or stock predictions solely based on historical data and related estimates by industry experts. Please do take advice from certified people and then go for investment.

Here predictions are just data for your information. We here declare that the stock forecast team does not responsible for any price changes or the price does not go expected. At last, it is solely based on how the stock market is running at that certain conditions.

Stock Forecast Predictions

TCS infographics - Stock forecast by Kamlesh Rode

TCS stock is doing exceptionally well in terms of ratios.

This stock had a CAGR of more than 26% from the last 5 years which is a very huge number.

Earnings per share (EPS) is 87.88

The price-to-earnings ratio is 43.72.

What if I invest in 10 stocks for the upcoming years? You will be pretty amazed by the return showing in the image above

These are future investment values are calculated based on a CAGR(Compound Annual Growth Rate) of 26%.

If this stock keeps CAGR average value for upcoming years, then look at the huge numbers

For my investment of Rs. 38420(10 TCS stocks)

For the first year, I will be getting more than 48 Thousand

For the next 5 years, the Investment will be more than 1.22, Lac

then for the next 10 years, the investment will touch 3L.

For the next 15 years, more than 12 Lacs will be the investment value.

and in the next 20 years, the investment will touch more than 39 Lacs.

Look at after 25 years number, they are huge. Almost 1 Crore 24 Lacs.

You must be laughing but CAGR with compounding giving this amazing result.

Read How Rs.10,000 converted into 1770 Crores Wipro case study?

Conclusion

TCS is a very fundamentally strong stock company. Promoters have kept their holding for the last 5 years or so, which shows how the Tata Consultancy Services Company has grown and will grow in the next upcoming years. The ratio clearly defines the best performance of this stock company.

That’s why it is a favorite stock for the investors and TCS stock gained trust among shareholders.

Check TCS stock on NSE

Frequently Asked Questions

Que: Can I buy TCS stock?

Ans: The answer depends on how much capital you have in your pocket. This stock today reached more than 3800 levels. If you have enough capital then you can go for investment in this fundamentally strong stock.

Que: Is TCS stock is overvalued?

Ans: Yes right now TCS is trading at 16.41 times its book value. But if you look at the future perspective, then this stock will pay you a good value for your patience.

Que: Is TCS listed in the US stock market?

Ans: Yes, TCS stock is listed in the US stock market (Forex) and now trading at $10.

Que: Why TCS share is rising?

Ans: It is because of the strong fundamentals and great management team of TCS company. CAGR of 26% for the last 5 years shows how the investment is growing. The current EPS of 87 and PE ratio is more than 43, shows share is grown in past and will grow in future. That is why investors kept on increasing their stakes in this company.

Que: Is TCS giving a bonus?

Ans: TCS stock gave a 1:1 ratio bonus in the year 2018. Currently, this company is not giving any bonus on stocks.

Que: Do TCS employee gets stocks in compensation?

Ans: No, TCS does not give stock component in compensation.

Read more about fundamental analysis of stock with infographics.

Why Stock forecast by Kamlesh Rode?

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