Check Before You Invest : Tata Consultancy Services Ltd

Q: Which industry/sub-sector does Tata Consultancy Services Ltd belong to?

Tata Consultancy Services Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.

Q: Is Tata Consultancy Services Ltd a good quality company?

Tata Consultancy Services Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Tata Consultancy Services Ltd undervalued or overvalued?

Tata Consultancy Services Ltd appears Undervalued, as its key valuation ratios are lower than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 17.11, Historic Median: 30.33. Price to Book, Current: 7.85, Historic Median: 12.84. Price to Sales, Current: 3.15, Historic Median: 5.47. EV to EBITDA, Current: 10.8, Historic Median: 19.24

Q: Is Tata Consultancy Services Ltd a good buy now?

Tata Consultancy Services Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd revenue growth is 4.6% for FY-2026, which is below its 5-year CAGR of 10.22%, indicating slower growth.

Q: Gross Profit margin of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Gross profit margin which is the profit after deduction of direct costs, is 28.3% for FY-2026, which is in line with its 5-year median of 28.2%, indicating stable margins.

Q: Operating Profit Margin of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 27.11% for FY-2026, which is in line with its 5-year median of 26.69% indicating stable margins.

Q: Net Profit Margin of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Net Profit Margin is 18.52% for FY-2026, is in line with its 5-year median of 19.11%, indicating stable margins. Profitability Metrics. Gross Profit Margin (%), Current: 28.3, Historic Median: 28.2. Operating Profit Margin (%), Current: 27.11, Historic Median: 26.69. Net Profit Margin (%), Current: 18.52, Historic Median: 19.11

Q: Return on Asset of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Return on Asset is 29.62%, which is in line with its 5-year historical median of 30.42%, indicating stable asset utilization efficiency.

Q: Return on capital employed (ROCE) of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Return on capital employed is 66.25% for FY-2026, which is in line with its 5-year historical median of 66.25%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Check Before You Invest : Tata Consultancy Services Ltd

BSE: 532540 NSE: TCS ISIN: INE467B01029

| Sector: IT & ITES | Industry: IT - Software

Snapshot

Q.1 Which industry/sub-sector does Tata Consultancy Services Ltd belong to?

Tata Consultancy Services Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.

Q.2 Is Tata Consultancy Services Ltd a good quality company?

Tata Consultancy Services Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Tata Consultancy Services Ltd undervalued or overvalued?

Tata Consultancy Services Ltd appears Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	17.11	30.33
Price to Book	7.85	12.84
Price to Sales	3.15	5.47
EV to EBITDA	10.8	19.24

Q.4 Is Tata Consultancy Services Ltd a good buy now?

Tata Consultancy Services Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd revenue growth is 4.6% for FY-2026, which is below its 5-year CAGR of 10.22%, indicating slower growth.

Q.2 Gross Profit margin of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Gross profit margin which is the profit after deduction of direct costs, is 28.3% for FY-2026, which is in line with its 5-year median of 28.2%, indicating stable margins.

Q.3 Operating Profit Margin of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 27.11% for FY-2026, which is in line with its 5-year median of 26.69% indicating stable margins.

Q.4 Net Profit Margin of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Net Profit Margin is 18.52% for FY-2026, is in line with its 5-year median of 19.11%, indicating stable margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	28.3	28.2
Operating Profit Margin (%)	27.11	26.69
Net Profit Margin (%)	18.52	19.11

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Return on Asset is 29.62%, which is in line with its 5-year historical median of 30.42%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Return on capital employed is 66.25% for FY-2026, which is in line with its 5-year historical median of 66.25%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Return on equity is 49.11% for FY-2026, which is in line with its 5-year historical median of 49.11%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Cash conversion cycle is 56 days, above its 5-year historical median of 53 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	1.6	1.62
ROE (%)	49.11	49.11
ROCE (%)	66.25	66.25
Cash Conversion Cycle	56 days	53 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.01, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Tata Consultancy Services Ltd?

Tata Consultancy Services Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Tata Consultancy Services Ltd?

Q.1 Promoter shareholding and pledge status of Tata Consultancy Services Ltd?

Promoters hold 71.77% of the Tata Consultancy Services Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Tata Consultancy Services Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Tata Consultancy Services Ltd vs industry peers?

Tata Consultancy Services Ltd revenue CAGR is 10.22%, compared to the industry median CAGR of 10.42%, indicating stable growth and maintaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	4.6	10.4
Gross Profit Growth (%)	7.1	9.1
Operating Profit Growth (%)	6.5	7.8
Net Profit Growth (%)	1.4	8.7

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	1.6	1.19
ROE (%)	49.11	24.52
ROCE (%)	66.25	31.91
Cash Conversion Cycle (days)	55.68	43

Valuation & price assessment

Q.1 Stock return of Tata Consultancy Services Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 6.3% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	6.3%	-5.5%	-11%	-33.2%

Q.2 Valuation ratios of Tata Consultancy Services Ltd vs historical?

The current P/E ratio of 17.11 is lower than its historical median of 30.33, indicating that the stock is trading below its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	17.11	30.33	47.38
Price to Book	7.85	12.84	2.64
Price to Sales	3.15	5.47	4.79
EV to EBITDA	10.8	19.24	16.75

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Check Before You Invest : Tata Consultancy Services Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

Check more companies

Check trending companies

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