A STUDY ON TCS WITH REFERENCE TO STOCK MARKET

PERFORMANCE

Submitted by

ROMI ROY
(2018-20)

To

Ms. ALFIA THAHA

(Faculty, Department of MBA)
FINANCIAL MANAGEMENT

SAINTGITS INSTITUTE OF MANAGEMENT

Kottukulam Hills, Pathamuttom P.O, Kottayam 686532
September 2018
 INTRODUCTION

Tata Consultancy Services Limited (TCS) is a subsidiary of the Tata Group, an Indian
information technology consulting and business solutions company which operates in 46
countries worldwide. TCS Limited was founded in 1968 by a division of Tata Sons Limited. Its
early contracts included punched card services to TISCO (now Tata Steel), working on an Inter-
Branch Reconciliation System for the Central Bank of India. In 1975 TCS made an electronic
depository and trading system called SEMCOM for Swiss company. TCS also established
India's first software research and development center called Tata Research Development and
Design Centre in Pune, Maharashtra. On 25 August 2004, TCS became a Publicly Listed
Company.

ABOUT TCS

Established in 1968, Tata Consultancy Services a member of the Tata Group has grown
to its current position as the largest IT services firm in Asia based on its record of outstanding
service, collaborative partnerships, innovation, and corporate responsibility.

It was founded by Jamsetji Tata in 1848 and it is one of India’s most respected
institutions today. Their mission reflects the Tata Group's longstanding commitment to
providing excellence. To help customers achieve their business objectives by providing
innovative, best–in–class consulting, IT solutions and services, and to actively engage all
stakeholders in a productive, collaborative, and mutually beneficial relationship. TCS is part
of the Tata Group, which has a heritage of over 135 years as one of India's leading corporate
groups. The Tata Group has interests in a diverse range of industries, and had combined sales
of approximately Rs542 billion (US$ 11.8 billion) in fiscal 2003.

TCS is a leading global IT services provider and was the first billion-dollar Indian IT
services organisation by annual revenues. Since its inception in 1968, TCS has pioneered many
of the significant developments in the Indian IT services industry, including the offshore
delivery model for IT services.

TCS is a global organisation with offices in 32 countries and development centres in

10 countries. TCS offers a comprehensive range of IT services to its clients in diverse industries
such as banking and financial services, insurance, manufacturing, telecommunications, retail
and transportation. TCS' clients include some of the world's largest and well-known
organisations including six of the top ten corporations in the Fortune 500 list of largest
corporations in the United States. TCS has developed extensive experience in providing end-
to-end IT services, integrating multiple technologies and delivering solutions in multiple
geographies for its global clients. It is the largest Indian IT services organisation in terms of
revenues as well as profits.

The IPO, besides giving TCS a separate corporate identity, would also help list its
shares on the National Stock Exchange and the Mumbai Stock Exchange.

TCS services over 548 active clients, including six of the ten largest corporations and
39 of the 100 largest corporations in the Fortune 500 list of American corporations. To service
this large client base, the company has on its rolls more than 30,000 consultants from over 30
different countries.

In FY 2004, TCS reported revenues of Rs7122.73 crore and a profit after tax of
Rs1612.45 crore. The company's revenues have recorded a magnificent compound annual
growth rate of 27 percent plus over the last four years.

The growth rates have been maintained during the first quarter of the current fiscal
year as well. For the first quarter of FY 2004-05 ending June 30, 2004, the company reported
revenues of Rs2,134 crore, up 40 per cent over previous year's first quarter figures of Rs1,526
crore. Net profit, before minority interest, too moved up by 71 per cent to Rs519 crore
compared to last year's first quarter net profit of Rs303 crore.

Besides the size of its operations and its status of being a pioneer of IT services in the
country, the other competitive strengths of TCS are a track record of executing large, end-to-
end mission critical projects, long-term client relations, extensive global footprint, world class
quality, strategic focus on Indian markets and a strong management team.

TCS has worked on mission critical projects, which are the IT backbone for the Indian
financial services industry, including National Stock Exchange, NSDL, Reserve Bank of
India's Public Debt Office, State Bank of India and Unit Trust of India.

The success of TCS can be attributed to its strong management team and excellent
training methods developed to make the Indian professional globally relevant and competitive.
TCS, with attrition rate on Indian payrolls of 6.5 per cent for FY 2004 has been ranked second
among the best IT employers in India by Dataquest in 2003. Its chief executive officer, S
Ramadorai, was recognised as one of the "Top 25 Most Influential Consultants in the World"
by the Consulting Magazine and "Asian Business Leader of the Year" (2002) by CNBC Asia
Pacific.

Says Ramadorai, "We intend to maintain and enhance our position as a leading global
IT services organisation by offering a comprehensive portfolio of IT services and investing
further in our competitive strengths."

While expanding its global capabilities, TCS intends to maintain its focus on the
Indian market. The company believes that India is a strategically important growth market
offering opportunities to build competencies in terms of developing domain expertise, leverage
its assets, and most importantly develop its employees to be deployed on complex projects
globally.

TCS is strengthening the Business Process Outsourcing capabilities through a series

of acquisitions, WTI Technologies, Airline Finance Services and Phoenix Global among them,
which would provide them with a strong platform to further expand the BPO business.
 AREAS OF BUSINESS

Services
TCS helps clients optimise business processes for maximum efficiency and galvanise their IT
infrastructure to be both resilient and robust. TCS offers the following solutions:

 Assurance services.
 BI and performance management.
 Business process services.
 Consulting.
 Digital enterprise.
 Eco-sustainability services.
 Engineering and industrial services.
 Enterprise security and risk management.
 Enterprise solutions.
 iON - small and medium business.
 IT infrastructure services.
 IT services.
 Platform solutions.
 Supply chain management.

Industries
TCS has the depth and breadth of experience and expertise that businesses need to achieve
business goals and succeed amidst fierce competition. TCS helps clients from various
industries solve complex problems, mitigate risks and become operationally excellent. Some
of the industries it serves are:
 Banking and financial services.
 Energy - oil and gas, oil field services and renewable.
 Government.
 Healthcare.
 High tech.
 Insurance.
 Life sciences.
 Manufacturing.
 Media and information services.
 Resources - metals, mining and construction.
 Retail and consumer products.
 Telecom.
 Travel, transportation and hospitality.
 Utilities.

Software

 Digital software and solutions.

 TCS BaNCS.
 TCS MasterCraft.
 TCS technology products.

NATIONAL INDUSTRIAL CLASSIFICATION CODE

The National Industrial Classification Code (“NIC Code”) is a statistical standard for
developing and maintaining a comparable data base for various economic activities. This code
has been developed with an intent to ascertain and analyse as to how each economic activity is
contributing towards national wealth. The Department of Policy and Promotion in their Press
Note 4 (2014 series) dated 26 June 2014 decided to switch over to the NIC 2008 from NIC
1987 version. Since then, all Indian Companies are advised to follow NIC 2008. NIC 2008 is
more compatible with the international system of classification. This enables the compliance
processes for registration to flow in a smooth manner. The NIC code of TCS is MGT-9
WHERE IS THE NIC CODE USED?

1) UdhyogAadhar:
UdhyogAadhar is a registration provided to micro, small and medium sized businesses in India
under the Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act). While
applying for UdhyogAadhar, the NIC code needs to be submitted.

2) Company Registration/ LLP Registration:

For incorporating a company or a LLP, one needs to register the respective company/LLP on
the MCA (Ministry of Corporate Affairs) Portal. While registering, the NIC code of the
business is required.

V RAMAKRISHNAN CFO OF TCS

Tata Consultancy Services (TCS), (BSE: 532540, NSE: TCS) a leading global IT
services, consulting and business solutions organization, on February 20, 2017 announced V
Ramakrishnan has been appointed as the Chief Financial Officer. Ramakrishnan takes over
from Rajesh Gopinathan, who has been appointed as the Chief Executive Officer & Managing
Director of TCS.

Ramki joined TCS Finance in 1999 and served as the Finance head of TCS North
America for 7 years. Ramki closely partnered with business in the rapid growth of TCS’
operations in the region. Most recently he has been responsible for the financial controllership
of TCS subsidiaries and branches globally and various merger & acquisitions integration
initiatives.

Ramki is a graduate in commerce from Loyola College Chennai. He is a member of the

Institute of Chartered Accountants of India, the Institute of Company Secretaries of India and
the Institute of Cost Accountants of India.

TOP OFFICERS

Name Age Since Current Position

N. Chandrasekaran 54 2017 Non-Executive Chairman of the Board

Rajesh Gopinathan 2017 Chief Executive Officer, Managing Director, Non-

Independent Executive Director
V. Ramakrishnan 2017 Chief Financial Officer

N. Subramaniam 58 2017 Chief Operating Officer, Non-Independent, Executive

Director

Ajoyendra Mukherjee 2012 Executive Vice President, Global Head - Human

Resources

Rajendra Moholkar 2017 Company Secretary and Compliance Officer Designate

Pradipta Bagchi Head – Communication

Vishwanathan Iyer Head – Legal

K. Ananth Krishnan Research & Development

Aarthi Subramanian 50 2017 Non-Executive Director

Om Bhatt 67 2012 Independent Non-Executive Director

Aman Mehta 71 2004 Independent Non-Executive Director

Ron Sommer 69 2006 Independent Non-Executive Director

Kedar Shirali Head - Global Investor Relations

TCS' IPO opened on 29 July
• TCS to issue 55,452,600 equity shares of Rs1 each for cash at a premium through a 100 per
cent book building process.
• The indicative price band has been fixed at Rs775 and Rs900 per equity share of Rs1 each.
• The books will open to accept offers/bids on 29 July 2004 and close on 5 August 2004.
• The shares are to be listed on the National Stock Exchange and The Stock Exchange,
Mumbai.
• The Book Running Lead Managers for the issue are JM Morgan Stanley Pvt Ltd., DSP
Merrill Lynch Ltd. and JP Morgan India Pvt. Ltd.
TCS BSE CODE BOM: 532540

NSE CODE: TCS

Profit & Loss - Tata Consultancy Services Ltd. Rs (in Crores)

Mar'18 Mar'17 Mar'16 Mar'15 Mar'14

12Months 12Months 12Months 12Months 12Months

INCOME:

Sales Turnover 97356.00 92693.00 85864.00 73582.15 64676.08

Excise Duty .00 .00 .00 4.09 3.15

NET SALES 97356.00 92693.00 85864.00 73578.06 64672.93

Other Income 0 0 0 0 0

TOTAL INCOME 103159.00 97261.00 89621.00 78044.79 67787.64

EXPENDITURE:

Manufacturing Expenses 1920.00 1664.00 .00 19796.40 16950.73

Material Consumed 86.00 94.00 .00 64.83 39.72

Personal Expenses 51499.00 48116.00 42420.00 27368.32 21466.56

Selling Expenses .00 .00 .00 .00 .00

Administrative Expenses 16046.00 15730.00 16390.00 5320.31 4682.20

Expenses Capitalised .00 .00 .00 .00 .00

Provisions Made .00 .00 .00 .00 .00

TOTAL EXPENDITURE 69551.00 65604.00 58810.00 52549.86 43139.21

Operating Profit 27805.00 27089.00 27054.00 21028.20 21533.72

EBITDA 33608.00 31657.00 30811.00 25494.93 24648.43

Depreciation 1647.00 1575.00 1459.00 1393.77 1080.55

Other Write-offs .00 .00 .00 .00 .00

EBIT 31961.00 30082.00 29352.00 24101.16 23567.88

Interest 30.00 16.00 13.00 79.57 23.41

EBT 31931.00 30066.00 29339.00 24021.59 23544.47

Taxes 6690.00 6413.00 6264.00 5293.01 5069.55

Profit and Loss for the Year 25241.00 23653.00 23075.00 18728.58 18474.92

Non Recurring Items 86.00 -200.00 -107.00 528.38 .00

Other Non Cash Adjustments .00 .00 .00 .00 .00

Other Adjustments -86.00 200.00 107.00 .00 .00

REPORTED PAT 25241.00 23653.00 23075.00 19256.96 18474.92

KEY ITEMS

Preference Dividend .00 .00 .00 .00 28.76

Equity Dividend 7842.00 7377.00 6507.00 12882.33 5478.37

Equity Dividend (%) 4105.75 3744.67 3303.04 6576.97 2796.94

Shares in Issue (Lakhs) 19142.88 19704.28 19704.28 19587.28 19587.28

EPS - Annualised (Rs) 131.86 120.04 117.11 98.31 94.32

Resources:
www.tata.com

https://www.moneycontrol.com/india/stockpricequote/computers-
software/tataconsultancyservices/TCS

https://www.nseindia.com/live_market/dynaContent/live_watch/get_quote/GetQuote.jsp?symbol=
TCS

https://www.businesstoday.in/magazine/money/the-facevalue-trap/story/4324.html

https://www.reuters.com/finance/stocks/company-officers/TCS.BO