Tata Consultancy Services Limited
Tata Consultancy Services Limited Fundamental Analysis
Tata Consultancy Services Limited (TCS.BO) shows moderate financial fundamentals with a PE ratio of 17.84, profit margin of 18.43%, and ROE of 46.29%. The company generates $2670.6B in annual revenue with moderate year-over-year growth of 5.99%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 83.8/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TCS.BO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentTCS.BO demonstrates superior asset utilization.
Valuation Score
ModerateTCS.BO shows balanced valuation metrics.
Growth Score
ModerateTCS.BO shows steady but slowing expansion.
Financial Health Score
ExcellentTCS.BO maintains a strong and stable balance sheet.
Profitability Score
ExcellentTCS.BO achieves industry-leading margins.
Key Financial Metrics
Is TCS.BO Expensive or Cheap?
P/E Ratio
TCS.BO trades at 17.84 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, TCS.BO's PEG of 13.16 indicates potential overvaluation.
Price to Book
The market values Tata Consultancy Services Limited at 8.18 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 12.25 times EBITDA. This signals the market has high growth expectations.
How Well Does TCS.BO Make Money?
Net Profit Margin
For every $100 in sales, Tata Consultancy Services Limited keeps $18.43 as profit after all expenses.
Operating Margin
Core operations generate 29.00 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $46.29 in profit for every $100 of shareholder equity.
ROA
Tata Consultancy Services Limited generates $26.98 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Tata Consultancy Services Limited produces operating cash flow of $533.05B, showing steady but balanced cash generation.
Free Cash Flow
Tata Consultancy Services Limited generates strong free cash flow of $495.13B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $136.85 in free cash annually.
FCF Yield
TCS.BO converts 5.64% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
17.84
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
13.16
vs 25 benchmark
P/B Ratio
Price to book value ratio
8.18
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.29
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.11
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.19
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.46
vs 25 benchmark
ROA
Return on assets percentage
0.27
vs 25 benchmark
ROCE
Return on capital employed
0.64
vs 25 benchmark
How TCS.BO Stacks Against Its Sector Peers
| Metric | TCS.BO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 17.84 | 36.23 | Better (Cheaper) |
| ROE | 46.29% | 1019.00% | Weak |
| Net Margin | 18.43% | 5872993857.00% | Weak |
| Debt/Equity | 0.11 | 0.57 | Strong (Low Leverage) |
| Current Ratio | 2.19 | 5.00 | Strong Liquidity |
| ROA | 26.98% | -294054.00% (disorted) | Strong |
TCS.BO outperforms its industry in 4 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Tata Consultancy Services Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
68.71%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
55.70%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
56.70%
Industry Style: Growth, Innovation, High Beta
High Growth