Report as on 23 November 2023 at 05:20 PM

STRONG
LONG TERM FUNDAMENTALS
3 Consecutive TCS
Positive Results
Strong buy
Bullish
Technical Trend
CMP: 3,508.95
High (22.54%) STOCK INFO:
Institutional Holding BSE – 532540/ NSE – TCS
Market Cap - Large Cap (Rs. 12,95,816 cr)
Sector – IT - Software
Largest Company 52 w H/L (Rs.) – 3680/3070.3
Dividend Yield: 3.31%
in IT - Software sector Debt Equity: -0.49%
Return on Equity: 44.35%
Price to Book: 12.83

www.marketsmojo.com
TCS
CMP: 3,508.95 Strong Buy 80
Report as on 23 November 2023 at 05:20 PM
Strong Sell Sell Hold Buy Strong Buy

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WHY IT’S A STRONG BUY? IS THIS STOCK FOR YOU?

Low Risk, Medium Return (1 Year)
Strong Long Term Fundamental Strength with an
average Return on Equity (ROE) of 40.36% Absolute Risk Volatility
Adjusted
-Healthy long term growth as Net Sales has grown by
an annual rate of 12.01% TCS 6.00% 0.34 17.43%
-Company has a low Debt to Equity ratio (avg) at 0 SENSEX 7.33% 0.75 9.79%
times
How much should you buy? -
The company has declared Positive results for Overall Portfolio exposure to TCS should be less than
the last 3 consecutive quarters 10%
-OPERATING CF(Y) Highest at Rs 41,965.00 Cr Overall Portfolio exposure to IT - Software should be
-NET SALES(Q) Highest at Rs 59,692.00 cr less than 30%
-DPR(Y) Highest at 99.86 % (If sector exposure > 30%, please use optimiser tool to
see which are the best stocks to hold in IT - Software )
Stock is technically in a Bullish range When to exit? - We will constantly monitor the company
-The technical trend has improved from Mildly and suggest at the appropriate time to exit from the
stock
Bullish on 20-Nov-23
-Multiple factors for the stock are Bullish like MACD,
Bollinger Band and KST
RETURNS SUMMARY (Price + Dividend)
The stock gave a total returns of 9.29% in the last 1 year In
High Institutional Holdings at 22.54% line with Sensex returns of 7.33%
-These investors have better capability and 75%

resources to analyse fundamentals of companies 50%

than most retail investors.
25%

Company is among the highest 1% of companies 0%

rated by MarketsMojo across all 4,000 stocks
-25%

With its market cap of Rs 12,91,590 cr, it is the

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biggest company in the sector and constitutes

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36.47% of the entire sector Tata Consultancy Services Ltd. SENSEX

-Its annual Sales of Rs 236,464.00 are 28.70% of the
industry
Investors Returns (3 years) –

Period 6M 1Y 2Y 3Y
Stock (%) 7.74% 9.29% 5.76% 35.76%
WHAT ARE YOUR RISKS?
Sector (%) 11.79% 11.79% -6.87% 38.32%
With ROE of 44.4, it has a Expensive valuation with a
Sensex (%) 6.51% 7.33% 12.53% 49.78%
12.8 Price to Book Value
-The stock is trading at a fair value compared to its
average historical valuations
-Over the past year, while the stock has generated a
return of 6.00%, its profits have risen by 12.8% ; the PEG
ratio of the company is 2.3

1
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TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

QUALITY

STRONG LONG TERM FUNDAMENTAL

STRENGTH WITH AN AVERAGE RETURN ON
EQUITY (ROE) OF 40.36%

High Growth in Net Sales 300000Cr

of 12.0% CAGR
12.0%
236,464
207,543
Company has experienced an increase
CAGR in its Net Sales in each of the past 5
200000Cr
158,257
177,998
152,497
consecutive years 134,094

Company’s Net Sales growth has 100000Cr

increased in each of the past 5
consecutive years
Net Sales has seen a high growth of 0Cr
13.93% over previous period Sep 2018 Sep 2019 Sep 2020 Sep 2021 Sep 2022 Sep 2023

Total Debt Debt to Equity Ratio

Low Debt to Equity Ratio Sep 2023 7,764.00 -0.43
Company’s average Debt to Equity ratio over the past few years Sep 2022 7,460.00 -0.42
is low at -0.43 times
Sep 2021 8,209.00 -0.39
No clear trend in Debt to Equity Ratio numbers Sep 2019 6,784.00 -0.45

ROE
The company has been able to generate a Return on Equity
40.36% ROE
(avg) of 40.36% signifying high profitability per unit of
shareholders funds

Dividend Payout Ratio

Company's high Dividend Pay-out ratio of 99.86% signifying the
99.86%
Dividend Payout Ratio
profits of the company are real

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TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

FINANCIAL TREND
Positive

THE COMPANY HAS DECLARED

results for

POSITIVE RESULTS FOR THE LAST 3 3

CONSECUTIVE QUARTERS consecutive
quarters

The company has generated

Rs higher cash revenues from 39 949 41 965
business operations 38 802

41,965.0 Operating Cash Flows (Rs Cr)

cr Highest at Rs 41,965.00 Cr and Grown
Operating Cash each year in the last three years
Flow- Annually
Mar 2021 Mar 2022 Mar 2023

Near term sales trend is very

Rs positive 55 309
58 229 59 162 59 381 59 692

59,692.0 Net Sales (Rs Cr)

Highest at Rs 59,692.00 cr and Grown
cr each quarter in the last five quarters
Net Sales -
Quarterly
Sep 2022 Dec 2022 Mar 2023 Jun 2023 Sep 2023

Near term PBT trend is positive

Rs PBT less Other Income (Rs Cr)
Highest at Rs 14,324.00 cr.
13 131
14 124 14 216 13 592
14 324

14,324.0 in the last five quarters

cr
PBT - Quarterly

Sep 2022 Dec 2022 Mar 2023 Jun 2023 Sep 2023

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TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

FINANCIAL TREND

Company is distributing higher

proportion of profits generated as
99.9% dividend 84.65
99.86

Dividend Payout
DPR (%)
Ratio (DPR) - 43.35
Highest at 99.86 % 35.75
41.06
Annually
in the last five years

Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023

Sep'23 Jun'23 Change%

Net Sales 59,692.0 59,381.0 0.5%
Key Operating Profit (PBDIT) excl Other Income 15,746.0 14,998.0 5.0%
Result Interest 159.0 163.0 -2.5%
Highlights Exceptional Items 0.0 0.0
Consolidated Net Profit 11,342.0 11,074.0 2.4%
Operating Profit Margin (Excl OI) 26.4 25.3 1.1%
Consolidate- figures in Rs
Cr

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TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

TECHNICALS

STOCK IS TECHNICALLY IN A BULLISH

RANGE
Bullish Daily Moving Averages indicating near term price strength
Current Price 50 Day Moving Average 200 Day Moving Average

3,508.95 3,489.80 3,360.85

Factors with upward momentum

Indicator Technical Trend
MACD Bullish (monthly)
Bollinger Band Bullish (weekly)
Bollinger Band Bullish (monthly)
KST Bullish (monthly)
Dow Theory Mildly Bullish (weekly)
OBV Mildly Bullish (weekly)

In the last 1 year Stock has generated 6% returns vs a market (BSE 500) return of
12.68%
3 Months 1 Year 3 Years

3.75%
3.22% 12.68% 65.37%

6.00% 28.82%

Stock BSE 500 Stock BSE 500 Stock BSE 500

5
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perform, modify, create derivative works, transmit, or in any way exploit any such content. Unauthorized usage is an infringement of our intellectual property rights and
a violation of law and it may also result in cancellation of your subscription package without any refund and may lead to legal action.

TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

SHAREHOLDING

INSTITUTIONAL INVESTORS COLLECTIVELY

HOLD 22.54 % OF THE COMPANY
These investors have better capability and resources 30%

to analyse fundamentals of companies than most

22.54%
retail investors. 21.90% 21.64% 22.26% 22.35% 22.32%

20%

10%

0%
Jun 22 Sep 22 Dec 22 Mar 23 Jun 23 Sep 23

Mutual Funds
3.49%
Shareholding Snapshot : Sep 23
Insurance Majority shareholders : Promoters
Companies
5.9% Pledged Promoter Holdings : 0.48
FIIs
Mutual Funds : Held in 38.00 Schemes (3.49%)
Promoters 12.47%
72.3%
Non Institution FIIs : Held by 1514 FIIs (12.47%)
5.16%
Promoter with highest holding : Tata Sons Private Limited (72.27%)
Highest Public shareholder : Lic Of India (4.81%)
Individual Investors Holdings : 4.54%

FII
15%
13.05% 12.94% 12.72% 12.46% 12.47%

holding has increased by 0.01%

10%
Number of FIIs holding stake in the company has
increased to 1514 from 1469
5%

0%
Sep 2022 Dec 2022 Mar 2023 Jun 2023 Sep 2023

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perform, modify, create derivative works, transmit, or in any way exploit any such content. Unauthorized usage is an infringement of our intellectual property rights and
a violation of law and it may also result in cancellation of your subscription package without any refund and may lead to legal action.

TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

MOJOSTOCK

PART OF MOJO STOCKS

Mojo Stocks are the highest rated stocks across thee market.
1% Less than 1% of the companies qualify as a Mojo Stock
For a company to Qualify as Mojo Stock it has to score highly across Mojo Parameters of
QUALIFY
Quality: Long Term Fundamental Performance
Valuation: Attractiveness of Stock Price at the current fundamentals
Financial Trend: Near term fundamental strength
Technicals: Price and volume momentum

Mojo Analysis of TCS

NEAR TERM DRIVERS: MILDLY POSITIVE

QUARTERLY FINANCIAL TREND TECHNICALS

Operating CF (A) Highest at Rs Technical trend turned Bullish

41,965.00 Cr from Mildly Bullish on 20 Nov
Positive Net Sales (Q) Highest at Rs 59,692.00
2023 at Rs 3519.3 Bullish
cr Moving Averages (daily) turned
Bullish from Mildly Bullish on 16
PBT less OI (Q) Highest at Rs
Nov 2023 at Rs 3498
14,324.00 cr.

LONG TERM DRIVERS: MILDLY POSITIVE

QUALITY VALUATION

Largest company in IT - Software At the current stock price and

sector financial performance the stock
Excellent has Expensive valuation Expensive

7
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perform, modify, create derivative works, transmit, or in any way exploit any such content. Unauthorized usage is an infringement of our intellectual property rights and
a violation of law and it may also result in cancellation of your subscription package without any refund and may lead to legal action.

TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

SIZE

BIGGEST COMPANY IN THE INDUSTRY IT -

SOFTWARE .

TCS is 36.47% of the entire IT - Software Industry (by market cap)

Contribution to Industry Size

Contribution to Industry Size 150

100 100 100 100 100

100
TCS has been the largest company in the industry
51.43
for the past 5 years 57.55 65 60.82 63.53
50

48.57 42.45 35 39.18 36.47

0
DEC-2019 DEC-2020 DEC-2021 DEC-2022 Nov-2023

Rest industry TCS

71.3% 63.37% TCS contributes 28.70% of the industry’s

Sales and 36.63% of Profits

28.7% 36.63%

TCS Rest of the Industry

Companies which form a sizable part of the industry generally enjoy a competitive edge due to the scale of their business

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perform, modify, create derivative works, transmit, or in any way exploit any such content. Unauthorized usage is an infringement of our intellectual property rights and
a violation of law and it may also result in cancellation of your subscription package without any refund and may lead to legal action.

TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

FACTORS
NOT WORKING
FOR THE COMPANY


9
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perform, modify, create derivative works, transmit, or in any way exploit any such content. Unauthorized usage is an infringement of our intellectual property rights and
a violation of law and it may also result in cancellation of your subscription package without any refund and may lead to legal action.

TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

VALUATION

WITH ROE OF 44.4, IT HAS A EXPENSIVE

VALUATION WITH A 12.8 PRICE TO BOOK
VALUE
Expensive

Expensive
valuation
Wipro TCS

Valuation Infosys

HCL Technologies

as compared to its Fundamentals LTI Mindtree

Attractive
Weak Fundamental Strong

Price to Book Value vs ROE

Fair 60 16
Fundamental

Valuation
as compared to its 30 12

past valuations 0 8

3
8

2
19

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23

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Company Valuation Price to Book PE Ratio PEG Ratio Dividend

Ratio Yield
Key
TCS Expensive 12.8 28.9 2.3 3.3%
Valuation
Multiples Infosys Fair 7.5 24.3 2.4 2.4%
vs Peers HCL Technologies Attractive 5.5 23.4 2 3.8%
Wipro Expensive 3.2 18.9 6 0.2%
LTI Mindtree Very Attractive 9.1 37.1 0 1.4%

10
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a violation of law and it may also result in cancellation of your subscription package without any refund and may lead to legal action.

TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

RESULT
ANALYSIS 

11
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TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

QUARTERLY VARIANCE

QUARTER RESULTS VARIANCE ANALYSIS

Sep'23 Jun'23 QoQ Sep'22 YoY Comments
Total Operating income 59,692 59,381 0.5% 55,309 7.9% QoQ and YoY increase
Total Expenditure (Excl Depreciation) 43,946 44,383 -1% 40,793 7.7%
Operating Profit (PBDIT) excl Other Income 15,746 14,998 5% 14,516 8.5% QoQ and YoY increase
Other Income 1,006 1,397 -28% 965 4.3%
Operating Profit (PBDIT) 16,752 16,395 2.2% 15,481 8.2% QoQ and YoY increase
Interest 159 163 -2.5% 148 7.4%
Exceptional Items 0 0 0% 0 0%
Depreciation 1,263 1,243 1.6% 1,237 2.1% QoQ and YoY increase
Profit Before Tax 15,330 14,989 2.3% 14,096 8.8% QoQ and YoY increase
Tax 3,950 3,869 2.1% 3,631 8.8% QoQ and YoY increase
Provisions and contingencies 0 0 0% 0 0%
Net Profit 11,380 11,120 2.3% 10,465 8.7% QoQ and YoY increase
Share in Profit of Associates 0 0 0% 0 0%
Minority Interest 38 46 -17.4% 34 11.8%
Other related items 0 0 0% 0 0%
Consolidated Net Profit 11,342 11,074 2.4% 10,431 8.7% QoQ and YoY increase

Consolidate results triggered in Rs Cr

Margins
Sep'23 Jun'23 Mar'23 Dec'22 Sep'22 Avg. (4 Comments
Qtrs)

OPM 26.4% 25.3% 26.7% 26.7% 26.3% 26.2% In line with average (4 Qtrs)
GPM 27.8% 27.3% 28.2% 27.3% 27.7% 27.7% In line with average (4 Qtrs)
NPM 19.1% 18.7% 19.3% 18.7% 18.9% 18.9% In line with average (4 Qtrs)

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a violation of law and it may also result in cancellation of your subscription package without any refund and may lead to legal action.

TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

ANNUAL RESULT

NET SALES - YOY GROWTH IN YEAR ENDED

MAR 2023 IS 17.58% VS 16.80% IN MAR
2022
Consolidated Net Profit: YoY Growth in year ended Mar 2023 is 9.97% vs 18.18% in Mar
2022
Operating Profit (PBDIT) excl Other Income: YoY Growth in year ended Mar 2023 is
11.69% vs 13.99% in Mar 2022
Interest: YoY Growth in year ended Mar 2023 is -0.64% vs 23.08% in Mar 2022 17.58%
Operating Profit Margin (Excl OI): YoY Growth in year ended Mar 2023 has fallen from Mar NET SALES
2022

Mar'23 Mar'22 Change(%)

Net Sales 2,25,458.00 1,91,754.00 17.58%
Key Operating Profit (PBDIT) excl Other Income 59,259.00 53,057.00 11.69%
Annual Interest 779.00 784.00 -0.64%
Results Exceptional Items 0.00 0.00
Consolidated Net Profit 42,147.00 38,327.00 9.97%
Operating Profit Margin (Excl OI) 26.28 27.67 -1.39%
Figures in Rs Cr | Seasonal companies are compared with the same quarter last year

Net Sales-YoY Growth in year ended Mar 2023 is 17.58% vs Consolidated Net Profit-YoY Growth in year ended Mar 2023
16.80% in Mar 2022 is 9.97% vs 18.18% in Mar 2022
400000 50000 42,147.00
38,327.00
31,472.00 32,340.00 32,430.00
225,458.00
191,754.00
200000 146,463.00 156,949.00 164,177.00 25000

0 0
Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023

Operating Profit (PBDIT) excl Other Income-YoY Growth in Operating Profit Margin (Excl OI)-YoY Growth in year ended
year ended Mar 2023 is 11.69% vs 13.99% in Mar 2022 Mar 2023 has fallen from Mar 2022
100000 40
26.97 26.83 28.35 27.67 26.28
59,259.00
53,057.00
50000 39,506.00 42,109.00 46,546.00 20

0 0
Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023

Figures in Rs Crore

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perform, modify, create derivative works, transmit, or in any way exploit any such content. Unauthorized usage is an infringement of our intellectual property rights and
a violation of law and it may also result in cancellation of your subscription package without any refund and may lead to legal action.

TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

BALANCESHEET AND CASHFLOW

BALANCE SHEET AND CASH FLOW

ANALYSIS

0.0% Borrowings
Mar'23
0.00
Mar'22
0.00
Change%

Increase
Other Long Term Liabilities 8,095.00 8,727.00 -7.24%
Fixed Assets 14,189.00 14,867.00 -4.56%
Investments 266.00 223.00 19.28%
in Borrowings in quarter Current Assets 1,10,270.00 1,08,310.00 1.81%
ended Mar 2023 vs in
Figures in Rs Cr
Mar 2022

Other Long Term Liabilities: YoY Growth in year ended Mar 2023 is -7.24% vs -0.02% in Mar 2022
Fixed Assets: YoY Growth in year ended Mar 2023 is -4.56% vs 3.86% in Mar 2022
Investments: YoY Growth in year ended Mar 2023 is 19.28% vs 4.69% in Mar 2022
Current Assets: YoY Growth in year ended Mar 2023 is 1.81% vs 9.10% in Mar 2022

Cash From Operation - YoY Growth in year ended Mar

5.05% 2023 is 5.05% vs 2.96% in Mar 2022
Mar'23 Mar'22 Change%
GROWTH Cash Flow from Operating Activities 41,965.00 39,949.00 5.05%
Figures in Rs Cr

60000

41,965.00
38,802.00 39,949.00
40000
32,369.00
28,593.00

20000

0
Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023

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TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

PEER COMPARISION

PEER COMPARISON
TCS Infosys HCL Wipro LTI Mindtree
Technologies
Size
Market Cap (Cr.) 1,295,816 605,964 361,460 221,690 164,819
Annual Sales (TTM) (Cr.) 236,464 152,686 106,274 91,766 34,919
Annual Net Profit (TTM) (Cr.) 44,654 24,871 15,445 11,644 4,428
Growth Factors (TTM)
Net Sales Growth 1 year 13.9% 13% 14.2% 7.7% 43.6%
Operating Profit Growth 1 year 13.3% 10.5% 16% 5.8% 29.1%
Net Profit Growth 1 year 12.8% 8.7% 11.9% 3.2% 25%
Net Sales Growth 5 year 12% 15.1% 14.2% 10.3% 33.1%
Operating Profit Growth 5 year 10.7% 12.6% 12.7% 11.5% 32.2%
Net Profit Growth 5 year 9.3% 8.5% 10.8% 8.5% 27.1%
Capital Structure Factors
EBIT to Interest 75.6 82.8 43 11.6 31.5
Debt to EBITDA 0.1 0.2 0.2 1 0.3
Net Debt to Equity -0.5 -0.2 -0.3 -0.2 -0.3
Sales to Capital Employed 4.6 2.3 2.2 1.7 2.9
Management Quality Factors
ROCE (latest) 111.2% 48.9% 40% 25.8% 46.1%
ROE(latest) 44.4% 30.8% 23.5% 16.8% 24.5%
Tax Ratio 25.7% 27.7% 23.8% 23% 23.8%
Operating CF to Net Profit 99.6% 93.2% 121.3% 115.1% 70.2%
Dividend Payout Ratio 99.9% 58.4% 87.8% 4.8% 40.3%
Valuation Factors
PE Ratio 28.9 24.3 23.4 18.9 37.1
Price to Book 12.8 7.5 5.5 3.2 9.1
PEG Ratio 2.3 2.4 2 6 -
Dividend Yield 3.3% 2.4% 3.8% 0.2% 1.4%
EV to EBITDA 20 16 14.6 11.8 25.3
EV to Capital Employed 24.2 8.9 7.1 3.8 13.3
Shareholding
Promoter Holdings 72.3% 14.9% 60.8% 72.9% 68.7%
Promoter Pledged Holdings 0.5% - - - -
Total Institutional Holding 22.5% 69.1% 34.5% 16.9% 21.1%
FII Holdings 12.5% 33.6% 18.8% 6.5% 8.1%
Returns
1 Month 2.9% 2.9% 7.7% 5% 5.1%
3 Months 3.2% 3% 12.5% -3.1% 5.7%
YTD 7.7% -3.9% 28% 2.4% 25.3%
1 Year 6% -8.4% 20.7% 3.5% 15.3%
3 Years 28.8% 27.1% 58.5% 13% 67.6%

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a violation of law and it may also result in cancellation of your subscription package without any refund and may lead to legal action.

TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

COMPANY BACKGROUND

COMPANY BACKGROUND

About the Company

Tata Consultancy Services Ltd is a leading global IT services, consulting and
INDUSTRY : IT - business solutions organization offering transformational as well as outsourcing
Software services to global enterprises.

1,295,816 cr (Large
Cap)

Part of SENSEX

Board of Directors
N Chandrasekaran Chairman (Non-Executive)

O P Bhatt Non-Exec. & Independent Dir.

Aarthi Subramanian Non-Exec & Non-Independent Dir

Rajesh Gopinathan Managing Director & CEO

N Ganapathy Executive Director & COO

Subramaniam

4 more board of directors

Company Coordinates

Company Details: Registrat Details:

9th Floor, Nirmal Building, Nariman Point Mumbai TSR Darashaw Ltd, 6-10 , Haji Moosa Patrawala Indl. Est , 20
Maharashtra : 400021 Dr.E.Moses Road , Mahalaxmi , Mumbai
Tel: 91-022-67789595 Fax: +91-22-66568494
Fax: 91-022-67789660 Email: csg-unit@tsrdarashaw.com
Email: investor.relations@tcs.com
Website: www.tcs.com

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TCS STRONG BUY | Report as on 23 November 2023 at 05:20 PM

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The Company is also a SEBI registered Investment Advisor (“IA”). The Company and its associates do not own any
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Research Analysis.

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