FINANCIAL STATEMENT ANALYSIS OF TCS & IT’S

COMPARISON WITH 5 PEERS

TCS was established in 1968 as a division of Tata Sons Limited.

TCS Ltd. got incorporated as a separate entity on January 19, 1995.

TCS operates in 46 countries out of which Americas,Europe,Middle East and Asia Pacific are major ones.The company is headquartered in Mumbai and has 199 branches across the world.

It is a subsidiary of the Tata Group and is listed on the Bombay Stock Exchange and the National Stock Exchange of India.

TCS is the largest Indian company by market capitalization and is the largest India-based IT services company by 2013 revenues.

ABOUT TCS

On 25 August 2004, TCS became a publicly listed company.

In 2005, TCS became the first India-based IT services company to enter the bioinformatics market.

In 2006, TCS designed an ERP system for the Indian Railway Catering and Tourism Corporation.

By 2008, TCS's e-business activities were generating over US$500 million in annual revenues.

Milestones

TCS entered the small and medium enterprises market for the first time in 2011, with cloud-based offerings.

On the last trading day of 2011, TCS overtook RIL to achieve the highest market capitalisation of any India-based company.

In the 2011/12 fiscal year, TCS achieved annual revenues of over US$10 billion for the first time.

In May 2013, TCS was awarded a six-year contract worth over  1100 crores to provide services to the Indian Department of Posts.

Promoters & Shareholders Pattern

Promoters74%

Individuals4%

Institutions7%

FII14%

Others0%

Promoters

Individuals

Institutions

FII

Govt.

Others

TCS’s technology products help to achieve superior operational efficiency and optimize the time, cost and energy investments.

The Key Products of TCS are as follows- TCS Knowledge Products TCS Engineering Products TCS Life Sciences & Healthcare Products TCS Banking & Insurance Products

Key Products

SERVICES

REVENUE BY SERVICES

GROWTH IN GEOGRAPHIC REGIONS

IT Solutions and Services 

71%

Business Process Outsourcing 

11%

Engineering and Industrial Services

5%

IT Infrastructure Services

6%

Asset Based Offerings3% Global Consulting

3%

Segment Sales Chart

IT Solutions and Services 

Business Process Outsourcing 

Engineering and Industrial Services

IT Infrastructure Services

Asset Based Offerings

Global Consulting

Avis Group AVIVA Bahrain National Insurance British Airways Hyundai Infineon ING Group Mizuho Motorola National Insurance Company Sony Tata Power 3 Australia

KEY CLIENTS & CUSTOMERS

N Chandrasekaran(Chief Executive Officer and Managing Director)

Natarajan Chandrasekaran (“Chandra”) is the Chief Executive Officer (CEO) and Managing Director of Tata Consultancy Services

Chandra has led TCS to great success with the market capitalization of the company touching USD 50 billion during 2012. 

Key Personnels

Mr.Rajesh Gopinathan, has been the Chief Financial Officer of Tata Consultancy Services Limited since February 9, 2013.

Mr. Gopinathan served as Deputy Chief Financial Officer at Tata Consultancy Services Limited from October 19, 2012 to February 2013.

He has over 11 years of experience and was previously employed at Tata Industries Ltd.

Mergers & Acquisitions

Of TCS

Name Acquisition Date

Activities Notes

Citigroup global services limited

Dec 2008 Captive BPO of Citigroup Inc.

TCS acquired key Banking and Financial Services (BFS) domain knowledge.

Supervalu Services India

15th Sep 2010 Captive IT/BPO unit of Supervalu Inc. in India

TCS had a deal with Supervalu to have their Software Outsourcing to TCS and acquired Supervalu India.

Computational Research Laboratories

August 2012 High Performance Computing

Acquire expertise in High Performance Computing (HPC) applications and Cloud services

Alti SA April 2013 IT Services Access to blue-chip French and European clients in banking, luxury, manufacturing and utilities sectors

InformationBSE Code :532540Book Value (Rs.) :165.73Dividend Yield (%) :1.04Market Cap (Rs cr.) :4,12,419.97P/E :24.70EPS (Rs.) :85.24Face Value (Rs.) :1

Peers

Name Last Price

Market capitalization

Sales Turnover

Net Profit Total Assets

Infosys 3,247.05 186,457.35 36,765.00 9,116.00 36,059.00

Oracle Fin Serv

2,951.50 24,832.32 2,937.70 1,029.26 7,292.35

TCS 2,079.85 407,386.04 48,426.14 12,786.34 32,725.37

Tech Mahindra 1,803.15 42,098.66 6,001.89 652.52 5,287.30

HCL 1406.95 98,405.48 23,075.50 1,496 14,133.92

Wipro 542.60 133,807.07 33,517.30 5,650.20 28,275.50

LIQUIDITY RATIOS

Current ratio-

A current ratio of 2 would mean that current assets are sufficient to cover for twice the amount of a company's short term liabilities.

Quick ratio=Quick Ratio, also known as Acid Test Ratio, shows the ratio of cash and other liquid resources of an organization in comparison to its current liabilities. – quick ratio of 0.5 would suggest that a company is able to settle half of its current liabilities instantaneously.

Quick Ratio= CA – stock CL

CURRENT & QUICK RATIO

Quick Ratio= CA – stock CL

2011 2012 20132.10

2.20

2.30

2.40

2.50

2.60

2.70

2.80

2.90

2.392.42

2.85

CURRENT RATIO

2011 2012 20130

0.5

1

1.5

2

2.5

3

3.5

2.4 2.44

2.89

QUICK RATIO

LEVERAGE RATIOS Interest Coverage Ratio, states the number of times a company is capable of

bearing its interest expense obligation out of the operating profits earned during a period.

An interest cover of 2 implies that the entity has sufficient profitability to bear

twice the amount of its current finance cost.

Debt-equity ratio -Debt-to-Equity ratio is the ratio of total liabilities of a business to its shareholders' equity

• Lower values of debt-to-equity ratio are favourable indicating less risk.

Profit before interest and tax (PIBT)

Interest Expense

Debt-to-Equity Ratio = Total Liabilities

Shareholders' Equity

INTEREST COVERAGE RATIO

2011 2012 20130

100

200

300

400

500

600

700

800

900

435.804097951024

816.02012195122

513.840627041149

INTEREST COVERAGE RATIO

DEBT EQUITY RATIO

2011 2012 20130.29

0.30

0.31

0.32

0.33

0.34

0.35

0.36

0.37

0.38

0.39

0.33

0.38

0.32

DEBT EQUITY RATIO

TURNOVER RATIO Turnover ratios, also referred to as asset

management ratios, measure how efficiently the assets are employed by a firm.

These ratios are based on the relationship between the level of activity.

Inventory turnover ratio- This ratio measures how fast the inventory is

moving through the firm & generating sales

Debtor’s turnover ratio- This ratio indicates how many times sundry

debtors (accounts receivables) turnover during the year.

TURNOVER RATIOS

2011 2012 20130

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

4823.01153212521

8172.14300736067

9241.62977099237

INVENTORY TURNOVER RATIO

2011 2012 20130

1

2

3

4

5

6

7

87.19

5.58

4.76

DEBTOR'S TURNOVER RATIO

Profitability ratios EBITDA This ratio helps in determining the

percentage of revenue left over after the company pays its operating expenses.

ROCE-It measures the profitability of a company by expressing its operating profit as a percentage of its capital employed.

ROCE = 

Net Operating Profit

Capital Employed

ROE The amount of net income returned as a

percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

ROE is expressed as a percentage and calculated as:

Return on Equity = Net Income/Shareholder's Equity

PAT In accounting, profit is the difference between

the purchase and the component costs of delivered goods and/or services and any operating or other expenses.

SALES MARGIN The amount added (either a percentage or an

absolute amount) to a rate that will be offered to a customer.

PAT=NET PROFIT-TOTAL EXPENSES

Profitability Ratio Of TCS

2011-12 2012-13 2013-14EBITDA 16536.66 14070.9 9258.26

ROCE 0.552 0.563 0.537

ROE 0.392 0.446 0.396

PAT 7569.99 10975.98 12786.34

SALES MARGIN 99.68% 99.66%-

EPS The portion of a company's profit allocated to

each outstanding share of common stock.  Earnings per share serves as an indicator of a

company's profitability.

P/E RATIO

A valuation ratio of a company's current share price compared to its per-share earnings.

 Current Share Price

Earnings per Share

2011 2012 20130

10

20

30

40

50

60

70

38.62

55.97

65.23

EPS

2011 2012 20130

5

10

15

20

25

30

35

30.06

22.4824.7

Chart Title

P/E ratio

Share price of last one year of TCS

Fundamental Analysis Of TCS And It’s Peer

Companies

TCS INFOSYS WIPRO ORACLE TECH MAHINDRA

HCL0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

0.33

0.17

0.60

0.13

0.79

0.54

0.38

0.2

0.58

0.138

0.840000000000001

0.646000000000001

0.32

0.19

0.68

0.14

0.735000000000001

0.55

DEBT-EQUITY RATIO

LIQUIDITY RATIO

TCS INFOSYS WIPRO ORACLE TECH MAHINDRA

HCL0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2.39

5.34

1.72

7.02

1.581.95

2.42

4.91

1.94

6.89

0.981.38

2.85

4.75

1.55

6.98

0.950000000000001

1.82

CURRENT RATIO

LIQUIDITY RATIO

TCS INFOSYS WIPRO ORACLE TECH MAHINDRA

HCL0

1

2

3

4

5

6

7

8

2.4

5.28

2.22

6.92

2.49

1.84

2.44

4.88

2.5

6.82

1.23 1.42

2.89

4.69

2.02

6.91

1.321.76

QUICK RATIO

Profitability RatiosEBITDA= OPERATING PROFIT + DEPRECIATION+AMORTISATION

2010-11 2011-12 2012-130

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

17511.4418039.91

14435.31

8258.79999999999

7270.46441.6

11478

14384

16435

11801090 800

9080

1300 16001682.64

2811.08

5063.11

TCS

WIPRO

INFOSYS

TECH MAHINDRA

ORACLE FINANCIAL SERVISES

HCL

ROCE= EBIT / CAPITAL EMPLOYED

2010-11 2011-12 2012-130

0.5

1

1.5

2

2.5

3

3.5

2.1

2.5

3.5

0.643

0.243 0.235

0.783

0.345 0.365

2.05

2.322.44

1.5

1.7

2.1

0.306

0.5350.646

TCS

WIPRO

INFOSYS

TECH MAHINDRA

ORACLE FINANCIAL SERVICES

HCL

ROE= NET INCOME/SHAREHOLDERS EQUITY

2010-11 2011-12 2012-130

50000

100000

150000

200000

250000

139173

104135

173401167829

145626

8761.79999999999

178876

198832

236265

124357134258

178263

142252

175829189267

0.425 0.624 0.36

TCS

WIPRO

INFOSYS

TECH MAHINDRA

ORACLE FINANCIAL SERVICES

HCL

PAT= NET PROFIT-TOTAL EXPENSES

2010-11 2011-12 2012-130

2000

4000

6000

8000

10000

12000

1400012776.3

10975.2 10913.4

5650.2

4685.1 4843.7

10897

9429

83328769

7674

98709887

89659896

2422.7

4040.093704.72

TCSWIPROINFOSYSTECH MAHINDRAORACLE FINANCIAL SERVICESHCL

Current news and Recommendations In FY14, 18 companies to join group

reporting $1billion and more in net income.

TCS, NCB (National Commercial Banks) ink pact to implement core banking platform.

India's largest software services exporter Tata Consultancy Services (TCS) today said it has been judged as the fastest growing IT services brand globally by Brand Finance.

Conclusion

We think that the stock price of TCS have moved up quite a bit whereas it will be doing more well in up coming days its the right time to invest.

http://www.tcs.com/Pages/default.aspx http://en.wikipedia.org/wiki/Tata_Consultanc

y_Services http://www.moneycontrol.com/financials/tat

aconsultancyservices/balance-sheet/TCS

http://www.moneycontrol.com/financials/tataconsultancyservices/profit-loss/TCS

http://www.economictimes.indiatimes.com

Bibliography

Faraz Alam-13023 Finil Pandya-13026 Mausumi Sen-13042 Kaustubbhi Chaturvedi-13093 Ashish Jain-13096 Sanyukta Khodke-13098

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