TATA CUNSULTANCY SERVICES

For the fast reach of services to everywere, every country need to have sound IT infrastructure. IT industry contributes 5.8% of our GDP which is expected to grow at a CAGR of 12% for the next five year. India has low computer penetration and large pool of skilled based people. Indian IT industry is fastest growing industry, will have 12% of total market share by 2013. TCS wants to repeat “NANO” story in software business, as it is targeting 8Million small & medium sector enterprises (SMEs), scaling up its “IT-As-A-service” to increase market share. Given increasing business of “SaaS”, “PaaS” & “IaaS” coupled with advantage cloud computing to SMEs, TCS is expected to have better industry share. TCS has high level of customer satisfaction it uses Global Network Delivery Model™ (GNDM) which allows company to provide reliable and cost effective delivery of services and solutions. It is also looking for new markets like Singapore, Malaysia, Australia, and New Zeeland etc. Gross margin improvement, to 27.52% in OND FY2010 from 25.25% in JAS FY2010, happens because of a process. It did not merely registered growth by selling services; it has also implemented necessary cost management techniques. TCS is also able to increase its employee utilization ratio from 79.5% in JAS FY2010 to 81.1% in OND FY2010. TCS Performance of last 3 Years
Sales 2007 2008 2009 1 4,939.97 1 8,533.72 22,404.00 Net P rofit 3,757.29 4,508.76 4,696.21 EP S 38.39 46.07 47.91

1800 1300 % 800 300 Jan-07

Price Trend & P/E Movement

33 13 3 Multiple 23

Source: BSE

(Rs. In Crore)

Jan-08 Price(LHS)

-7 Jan-09 Jan-10 P/E Ratio(RHS)

On 17th June 2009 TCS has issued bonus share in the ratio 1:1. P/E is short for the ratio of a company's share price to its per-share earnings. The most common measure of how expensive a stock is. Although a simple indicator to calculate, the P/E is actually quite difficult to interpret. P/E ratio tells us about P/E ratio shows the aggressiveness of the company. Higher the growth rates higher the P/E ratio. TCS was worst affected during global recession because its most revenue comes from America’s Nation and its dependency on these nations. Rising Rupee in 2007 posses challenge to TCS in 2007 it fell about 15% in 2007, whereas 2008-09 was worst as it decreased about 45% due high dependency on America’s Nations which has huge by Sub-prime crisis. In last six it has given a return of about 50%. It also affected by depreciation in INR. As TCS started picking up its growth, P/E ratio started rising. The movement of P/E ration also tells about undervalued or overvalued stock. TCS has outperformed all its competitors; it has given a return of 18.64% over the 3 months ending December 2009.

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