Tata Consultancy Services Limited

TCS.BO•information-technology-services

Current Price

3,049.45INR

per share

Fair Value

2,135.88INR

Overvalued

42.8%

Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 8.00%, lower than industry average of 9.16%.

Growth Trajectory

Profitability

In the growth phase company makes 23.18% profit on every dollar of sales, higher than industry average of 7.18%.

Profitability Trajectory

Risk Profile

Investors expect at least 8.69% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)

Return on Invested Capital (%)

Financial Health Overview

Enterprise Value

7.41T INR

Equity Value

7.72T INR

FCF Yield

55.38%

Average ROIC

68.53%

Cost of Capital

8.75%

P/E Ratio

22.26x

Financial Metric	Most Recent 12 months (INR)	Previous Year (INR)
Revenues	2.56T INR	2.41T INR
Operating Income or EBIT	669.78B INR	638.33B INR
Interest Expense	8.18B INR	7.78B INR
Book Value Of Equity	979.10B INR	904.89B INR
Book Value Of Debt	96.10B INR	80.21B INR
Cash and Marketable Securities	420.44B INR	439.04B INR
Number of Shares Outstanding	3.62B	--
Minority interests	8.30B INR	0 INR
Current Stock Price	3049.45 INR	--
Effective Tax Rate	26.00%	--
Marginal Tax Rate	30.00%	--

Performance vs Industry

Revenue Growth

-2.83%

6.33%Company

9.15%Industry

Below Industry

Operating Margin

+18.97%

26.14%Company

7.17%Industry

Above Industry

Tata Consultancy Services Limited demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate

4.65%

Cost of Capital

8.88%

Return on Capital

8.88%

Reinvestment Rate

52.36%

Terminal value represents 51% of total enterprise value, based on 4.65% perpetual growth and 8.88% discount rate.

Equity Value Breakdown

Component	Value	Type
Present Value (Terminal Value)	3.78T INR	Add
Present Value (Cash Flow Over Next 10 Years)	3.62T INR	Add
Value of Operating Assets	7.41T INR	Sub-total
Debt	96.10B INR	Subtract
Minority Interests	8.30B INR	Subtract
Cash	420.44B INR	Add
Value of Equity	7.72T INR	Sub-total
Number of Shares	3.62B shares	Divisor
Estimated Value per Share (Fair Value)	2.13K INR	Total
Current Market Price	3.04K INR	Reference

Financial Projections

Total FCF Present Value

3.62T INR

Avg Revenue Growth

6.16%

Avg Operating Margin

22.52%

Avg ROIC

68.53%

Year	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal Year
REVENUE
Revenue	2.74T INR	2.96T INR	3.20T INR	3.46T INR	3.74T INR	4.01T INR	4.28T INR	4.53T INR	4.77T INR	5.00T INR	5.23T INR
Growth Rate	7.32%	8.00%	8.00%	8.00%	8.00%	7.33%	6.66%	5.99%	5.32%	4.65%	4.65%
PROFITABILITY
Operating Income	718.80B INR	717.62B INR	743.34B INR	768.58B INR	793.10B INR	851.24B INR	907.95B INR	962.34B INR	1.01T INR	1.06T INR	1.10T INR
Operating Margin	26.14%	24.17%	23.18%	22.19%	21.20%	21.20%	21.20%	21.20%	21.20%	21.20%	21.20%
EBIT (1-tax)	531.91B INR	531.03B INR	550.07B INR	568.75B INR	586.89B INR	623.11B INR	657.35B INR	689.03B INR	717.58B INR	742.47B INR	776.99B INR
CASH FLOW
Reinvestment	34.50B INR	37.26B INR	40.24B INR	43.46B INR	43.00B INR	56.72B INR	54.41B INR	51.21B INR	47.14B INR	49.34B INR	406.87B INR
Free Cash Flow	497.41B INR	493.77B INR	509.82B INR	525.28B INR	543.88B INR	566.39B INR	602.94B INR	637.81B INR	670.43B INR	693.12B INR	370.12B INR
Terminal Value	--	--	--	--	--	--	--	--	--	--	8.74T INR
Present Value	457.64B INR	417.96B INR	397.04B INR	376.37B INR	358.54B INR	343.39B INR	336.09B INR	326.76B INR	315.57B INR	299.64B INR	—
EFFICIENCY
ROIC	81.23%	77.04%	75.71%	74.17%	72.43%	73.02%	72.23%	71.44%	70.65%	69.86%	8.88%
Cost of Capital	8.69%	8.69%	8.69%	8.69%	8.69%	8.72%	8.76%	8.80%	8.84%	8.88%	8.88%
Sales/Capital	6.37x	6.37x	6.37x	6.37x	6.37x	4.71x	4.71x	4.71x	4.71x	4.71x	—

Profitability & Efficiency

Operating Margin (%)

ROIC (%)

Value Creation Analysis

ROIC (%)

Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow (₹B)

Reinvestment (₹B)