TCS
TCS
Information Technology F&OKey Fundamentals
LargecapComputer Software & ConsultingInformation TechnologyTapetide Score
Data-driven rating, 0–100. How it works →
Key Insights
Strengths
3- Stock is providing a good dividend yield of 3.08%.
- Company has a good return on equity (ROE) track record: 3 Years ROE 51.9%
- Company has been maintaining a healthy dividend payout of 77.5%
Weaknesses
2- Stock is trading at 7.00 times its book value
- The company has delivered a poor sales growth of 10.2% over past five years.
Growth Rate
AI Analysis — Bull vs Bear
Tata Consultancy Services has a market capitalisation of about ₹7,47,642 crore, trades at a P/E of 15 and a P/B of 7.02, and has sustained ROE of around 52% over the last 3 years. Growth has slowed: sales compounded at 6% over 3 years against 10% over 5 years, and profit compounded at 8-9% across most periods. The stock has fallen 28% over 1 year, 17% annualised over 3 years and 12% annualised over 5 years, even as earnings kept growing, which points to a significant valuation de-rating.
- Return on equity is exceptionally high and consistent: 52% last year, 52% over 3 years, 49% over 5 years and 43% over 10 years. That shows strong capital efficiency and an asset-light business model.
- A 28% share-price decline over the past year has compressed the P/E to 15. The stock's valuation now reflects much more modest growth expectations than before.
- Shareholder payouts are generous: a reported dividend yield of 3.07% backed by a dividend payout ratio of 77.5%, which points to strong free cash flow generation.
- Recent growth has improved on the 3-year trend. TTM sales growth of 8% is above the 3-year sales CAGR of 6%, and TTM profit growth of 9% is above the 3-year profit CAGR of 8%.
- Profit has compounded at 8-9% across TTM, 3-year, 5-year and 10-year periods (10-year profit CAGR of 8%). Earnings have been stable through several technology and macro cycles.
- The P/B of 7.02 is largely explained by ROE of about 52%. At that level of return on equity, a high book multiple implies an earnings multiple of only about 15, so the premium to book value is less stretched than it first looks.
- With a market capitalisation of about ₹7,47,642 crore, TCS is one of India's largest listed companies. Its scale supports investment capacity, client relationships and bidding power for large deals.
- Long-term shareholder returns have been poor: stock CAGR of -28% over 1 year, -17% over 3 years and -12% over 5 years. The 10-year CAGR is only 6%.
- Top-line growth has slowed. The 3-year sales CAGR of 6% is below both the 5-year CAGR of 10% and the 10-year CAGR of 9%, and the 5-year sales growth of 10.2% is itself flagged as modest.
- The stock trades at 7.02 times book value. Any sustained fall in ROE from around 52% would leave little valuation cushion on an asset basis.
- Profit growth is stuck in single digits: 9% TTM, 8% over 3 years and 9% over 5 years. That is a mature growth profile rather than a compounding one.
- A dividend payout ratio of 77.5% means most earnings are distributed rather than reinvested. This suggests limited high-return avenues for organic growth.
- Sales CAGR of 6% over 3 years coincides with sector headwinds, including discretionary IT spending cuts and pricing pressure from AI-led automation. These could keep growth below the 10% achieved over 5 years.
- The share price fell 28% over 1 year even though TTM profit grew 9%. The market de-rated the stock despite earnings growth, and that sentiment could persist if growth does not re-accelerate.
This is AI-generated analysis, not financial advice. Do your own due diligence. Note: the source data had inconsistent dividend yields (0.57% in the key metrics vs 3.07% in the listed pros); this analysis uses 3.07%. ROE is the last-year figure (52%) from the growth metrics because the key-metrics ROE was null. The 52-week high/low values were unavailable (reported as 0) and were not used.
AI News Digest
- Deep YTD stock drawdown Sep 22
TCS closed 1.11% lower at ₹2,105, down 6.49% in a week, 8.56% in a month, 34.78% YTD and 31.52% over one year. Market cap fell to ₹7,61,969 crore from ₹8.21 lakh crore on Sep 8.
- Weak peer guidance, Choice REDUCE Sep 23
Infosys cut the upper end of its FY27 CC revenue guidance to 3% from 3.5%, and HCL Tech kept its guidance at 1-4%, which points to weak sector demand. Choice rated TCS 'REDUCE' with a ₹2,320 target.
- Iran-US tensions hit IT stocks Sep 7
TCS fell for a fifth straight session, down 1.53% to ₹2,268.8, as Nifty IT dropped 2.61% and Brent rose to $96.84 on Strait of Hormuz threats. It fell another 2.40% to ₹2,201.30 on Sep 9.
- Q1 FY27 profit dipped sequentially Sep 7
Q1 FY27 consolidated net profit fell 2.7% QoQ to ₹13,349 crore from ₹13,718 crore. Revenue rose only 2.2% sequentially to ₹72,275 crore.
- HyperVault capex dilutes ROCE Sep 5
The ₹70,000 crore commitment is about 17x TCS's historical ~₹4,000 crore annual capex, with ₹52,000 crore funded by debt. Data centre ROCE of 12-18% compares with over 50% for IT services, and early phases may run at negative EBITDA.
- Best Buy deal margin pressure Sep 2
Competitive pricing and aggressive SLAs could mean initial deal margins 200-400 bps below TCS's ~25% corporate average. Integrating 600 GCC staff also carries execution risk.
- Best Buy GCC win over Accenture Sep 1
TCS won a five-year mandate worth about ₹2,000 crore to run Best Buy's 600-person Bengaluru GCC, covering data, analytics and AI. It adds roughly $48M a year to a relationship HFS estimates at $75-100M annually.
- HyperVault 1GW Hyderabad AI campus Sep 5
HyperVault secured 264 acres in Hyderabad for a 1GW AI data centre, with up to ₹70,000 crore of investment and an expected 7,000 jobs. Telangana is targeting a June 2, 2028 inauguration, and TPG is investing up to ₹8,820 crore.
- DGCX deal lifts stock 5% Sep 15
TCS will modernise Dubai Gold & Commodities Exchange's trading, clearing and surveillance systems using TCS BaNCS and Quartz, with scope to expand into crypto and tokenised assets. Shares rose 5.19% to ₹2,315 intraday.
- Aareal Bank long-term partnership Sep 15
TCS will host and run Germany-based Aareal Bank's data centre and handle cloud, workplace, cybersecurity and infrastructure services end to end. It strengthens a German presence of about 15,000 employees.
- METRO AG strategic partner Sep 3
TCS will consolidate METRO AG's country-specific IT into a centralised, AI-led platform. METRO operates in 30+ countries with 84,000+ employees and €32.4B in sales. The contract value was not disclosed.
- Odisha OSWAS 3.0 order Sep 7
TCS won a ₹122.6 crore order to build OSWAS 3.0 on its DigiBOLT platform, extending the partnership about six years. The system serves 4,600+ offices and nearly 50,000 users, though the order is small relative to TTM revenue.
- Q2 results, dividend Oct 8 Sep 25
The Board meets on October 8, 2026 to approve Q2 FY27 results and consider a second interim dividend, with an October 14 record date. The first interim dividend was ₹12 per share in July, and the trading window has been closed since Sep 23.
- Split analyst views Sep 23
Trendlyne consensus is BUY with a 12-month average target of ₹2,474.61, about 17.5% above ₹2,105. Choice's REDUCE call carries a ₹2,320 target, which is also above the current price.
- BBY Services LLP acquired for ₹1 lakh Oct 1
TCS bought 100% of BBY Services India LLP, whose turnover rose to ₹294.53 crore in FY26 from ₹48.12 crore in FY25, to set up an AI Native Capability Center with about 450 employees. Completion is expected in 3-4 weeks.
- Pune lights-out factory lab Sep 9
TCS launched what it calls India's first lights-out factory lab at Sahyadri Park, Pune, featuring a fully robotic battery pack assembly line. It adds to an earlier NVIDIA-powered lab in Bengaluru.
- London AI creative studio Sep 7
TCS opened a 4,500-sq-ft AI-native creative engineering studio in London, part of a pledge to create 5,000 UK jobs over three years. It follows a similar New York studio launched in 2025.
- Jaguar TCS Racing renewed Sep 23
TCS renewed its multi-year Formula E title partnership and expanded its role to Official AI Partner ahead of the GEN4 era.
TL;DR: TCS is winning deals steadily, including Best Buy (~₹2,000 crore), METRO AG, Aareal Bank and DGCX, and the ₹70,000 crore HyperVault 1GW campus makes a large bet on AI infrastructure. The stock has still fallen 34.78% YTD to ₹2,105 on weak sector demand, peer guidance cuts, a 2.7% QoQ profit dip and geopolitical risk, while HyperVault's capital needs and aggressive deal pricing threaten ROCE and margins. The trend is still deteriorating despite the deal flow, and the October 8 Q2 FY27 results, especially TCV, margins and commentary on AI revenue, will show whether the stock can bottom out.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 59,381 | 59,692 | 60,583 | 61,237 | 62,613 | 64,259 | 63,973 | 64,479 | 63,437 | 65,799 | 67,087 | 70,698 | 72,275 |
| Expenses | 44,383 | 43,946 | 44,195 | 44,073 | 45,951 | 47,528 | 46,939 | 47,499 | 46,562 | 47,821 | 48,818 | 51,422 | 53,719 |
| Operating Profit | 14,998 | 15,746 | 16,388 | 17,164 | 16,662 | 16,731 | 17,034 | 16,980 | 16,875 | 17,978 | 18,269 | 19,276 | 18,556 |
| OPM % | 25% | 26% | 27% | 28% | 27% | 26% | 27% | 26% | 27% | 27% | 27% | 27% | 26% |
| Other Income | 1,397 | 1,006 | -96 | 1,157 | 962 | 729 | 1,243 | 1,028 | 1,660 | -268 | -2,273 | 757 | 900 |
| Interest | 163 | 159 | 230 | 226 | 173 | 162 | 234 | 227 | 195 | 229 | 538 | 265 | 273 |
| Depreciation | 1,243 | 1,263 | 1,233 | 1,246 | 1,220 | 1,266 | 1,377 | 1,379 | 1,361 | 1,413 | 1,380 | 1,406 | 1,239 |
| PBT | 14,989 | 15,330 | 14,829 | 16,849 | 16,231 | 16,032 | 16,666 | 16,402 | 16,979 | 16,068 | 14,078 | 18,362 | 17,944 |
| Tax % | 26% | 26% | 25% | 26% | 25% | 25% | 25% | 25% | 24% | 24% | 24% | 25% | 25% |
| Net Profit | 11,120 | 11,380 | 11,097 | 12,502 | 12,105 | 11,955 | 12,444 | 12,293 | 12,819 | 12,131 | 10,720 | 13,784 | 13,420 |
| EPS in Rs | 30.26 | 31 | 30.56 | 34.37 | 33.28 | 32.92 | 34.22 | 33.79 | 35.27 | 33.37 | 29.45 | 37.92 | 36.9 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 94,648 | 1,08,646 | 1,17,966 | 1,23,104 | 1,46,463 | 1,56,949 | 1,64,177 | 1,91,754 | 2,25,458 | 2,40,893 | 2,55,324 | 2,67,021 | 2,75,859 |
| Expenses | 70,167 | 77,969 | 85,655 | 90,588 | 1,06,957 | 1,14,840 | 1,17,631 | 1,38,697 | 1,66,199 | 1,76,597 | 1,87,917 | 1,94,623 | 2,01,780 |
| Operating Profit | 24,482 | 30,677 | 32,311 | 32,516 | 39,506 | 42,109 | 46,546 | 53,057 | 59,259 | 64,296 | 67,407 | 72,398 | 74,079 |
| OPM % | 26% | 28% | 27% | 26% | 27% | 27% | 28% | 28% | 26% | 27% | 26% | 27% | 27% |
| Other Income | 3,720 | 3,084 | 4,221 | 3,642 | 4,311 | 4,592 | 1,916 | 4,018 | 3,449 | 3,464 | 3,962 | -124 | -884 |
| Interest | 104 | 33 | 32 | 52 | 198 | 924 | 637 | 784 | 779 | 778 | 796 | 1,227 | 1,305 |
| Depreciation | 1,799 | 1,888 | 1,987 | 2,014 | 2,056 | 3,529 | 4,065 | 4,604 | 5,022 | 4,985 | 5,242 | 5,560 | 5,438 |
| PBT | 26,298 | 31,840 | 34,513 | 34,092 | 41,563 | 42,248 | 43,760 | 51,687 | 56,907 | 61,997 | 65,331 | 65,487 | 66,452 |
| Tax % | 24% | 24% | 24% | 24% | 24% | 23% | 26% | 26% | 26% | 26% | 25% | 24% | — |
| Net Profit | 20,060 | 24,338 | 26,357 | 25,880 | 31,562 | 32,447 | 32,562 | 38,449 | 42,303 | 46,099 | 48,797 | 49,454 | 50,055 |
| EPS in Rs | 50.68 | 61.58 | 66.71 | 67.46 | 83.87 | 86.19 | 87.67 | 105 | 115 | 127 | 134 | 136 | 138 |
| Div. Payout % | 78% | 35% | 35% | 37% | 36% | 85% | 43% | 41% | 100% | 58% | 94% | 81% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 196 | 197 | 197 | 191 | 375 | 375 | 370 | 366 | 366 | 362 | 362 | 362 |
| Reserves | 50,439 | 70,875 | 86,017 | 84,937 | 89,071 | 83,751 | 86,063 | 88,773 | 90,058 | 90,127 | 94,394 | 1,06,878 |
| Borrowings | 358 | 245 | 289 | 247 | 62 | 8,174 | 7,795 | 7,818 | 7,688 | 8,021 | 9,392 | 11,283 |
| Other Liabilities | 22,325 | 16,974 | 15,830 | 19,751 | 24,393 | 27,827 | 35,764 | 43,967 | 44,747 | 46,962 | 54,501 | 62,644 |
| Total Liabilities | 73,318 | 88,291 | 1,02,333 | 1,05,126 | 1,13,901 | 1,20,127 | 1,29,992 | 1,40,924 | 1,42,859 | 1,45,472 | 1,58,649 | 1,81,167 |
| Fixed Assets | 11,638 | 11,774 | 11,701 | 11,973 | 12,290 | 20,928 | 21,021 | 21,298 | 20,515 | 19,604 | 23,053 | 31,343 |
| CWIP | 2,766 | 1,670 | 1,541 | 1,278 | 963 | 906 | 926 | 1,205 | 1,234 | 1,564 | 1,546 | 2,665 |
| Investments | 1,662 | 22,822 | 41,980 | 36,008 | 29,330 | 26,356 | 29,373 | 30,485 | 37,163 | 31,762 | 30,964 | 33,988 |
| Other Assets | 57,252 | 52,025 | 47,111 | 55,867 | 71,318 | 71,937 | 78,672 | 87,936 | 83,947 | 92,542 | 1,03,086 | 1,13,171 |
| Total Assets | 73,318 | 88,291 | 1,02,333 | 1,05,126 | 1,13,901 | 1,20,127 | 1,29,992 | 1,40,924 | 1,42,859 | 1,45,472 | 1,58,649 | 1,81,167 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 19,369 | 19,109 | 25,223 | 25,067 | 28,593 | 32,369 | 38,802 | 39,949 | 41,965 | 44,338 | 48,908 | 52,094 |
| Investing | -1,807 | -5,010 | -16,895 | 3,104 | 1,645 | 8,968 | -7,956 | -738 | 548 | 6,091 | -2,144 | -11,886 |
| Financing | -17,168 | -9,666 | -11,026 | -26,885 | -27,897 | -39,915 | -32,634 | -33,581 | -47,878 | -48,536 | -47,438 | -42,133 |
| Net Cash Flow | 394 | 4,433 | -2,698 | 1,286 | 2,341 | 1,422 | -1,788 | 5,630 | -5,365 | 1,893 | -674 | -1,925 |
| Free Cash Flow | 16,426 | 17,144 | 23,270 | 23,263 | 26,461 | 29,281 | 35,663 | 36,985 | 38,902 | 41,688 | 44,994 | 48,013 |
| CFO/OP | 110 | 87 | 103 | 100 | 98 | 91 | 103 | 97 | 93 | 88 | 96 | 92 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 79 | 81 | 70 | 74 | 68 | 71 | 67 | 80 | 81 | 81 | 84 | 93 |
| Cash Conversion Cycle | 79 | 81 | 70 | 74 | 68 | 71 | 67 | 80 | 81 | 81 | 84 | 93 |
| Working Capital Days | 33 | 62 | 62 | 61 | 70 | 64 | 59 | 33 | 30 | 34 | 34 | 38 |
| ROCE % | 50% | 51% | 44% | 39% | 47% | 47% | 49% | 54% | 59% | 64% | 65% | 63% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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70 extracted metrics + investor summaries across FY05–FY27.
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Company Information
Tata Consultancy Services is the flagship company and a part of Tata group. It is an IT services, consulting and business solutions organization that has been partnering with many of the world's largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. [1]
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