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INVESTMENT INSIGHTS

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 10 year financial track record.
Q.3 Is Tata Consultancy Services Ltd undervalued or overvalued?
Tata Consultancy Services Ltd appears Undervalued, as its key valuation ratios are below with their past averages.
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

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 10.2% , 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 above its 5 year median of 28.2% , indicating increasing 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 above its 5 year median of 26.69% indicating increasing 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 below with its 5 year median of 19.11%, indicating decreasing margins.
Current Level Historic Median
Gross Profit Margin 28.3 28.2
Operating Profit Margin 27.11 26.69
Net Profit Margin 18.52 19.11
Q.5 Return on Asset of Tata Consultancy Services Ltd?
Tata Consultancy Services Ltd Return on Asset is 29.62%, which is below its 5 year historical median of 30.42%, indicating deteriorated asset utilization efficiency.
Q.6 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 historical median of 49.11%, indicating the business is making similar use of its shareholders capital.
Q.7 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 above its estimated weighted average cost of capital(WACC) 11.25%, indicating value creation.
Q.8 Cash conversion cycle of Tata Consultancy Services Ltd?
Tata Consultancy Services Ltd Cash conversion cycle is 56 days, above its historical median of 53 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 1.6 1.62
ROE 49.11 49.11
ROCE 66.25 66.25
Cash Conversion Cycle 56 days 53 days
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 with the industry average of 0.03 , 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

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)

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 11.32% , indicating slower growth and losing its market share.
Profit Metrics
Current Level Industry Median
Revenue 2,67,021 1,17,927.7
Gross Profit 75,566.9 27,851.9
Operating Profit 71,787 25,544
Net Profit 49,454 17,737.5
Operating Efficiency
Current Level Industry Median
Asset Turnover 1.6 1.28
ROE 49.11 26.41
ROCE 66.25 35.53
Cash Conversion Cycle (days) 55.68 44

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 7.4% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 7.4% -4.2% -6.3% -21.7%
Q.3 Valuation ratios of Tata Consultancy Services Ltd vs historical?
The current P/E is lower that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 18.95 27.00 22.96
Price to Book 8.69 9.33 2.61
Price to Sales 3.49 5.37 4.40
EV to EBITDA 11.97 18.27 17.20

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