Tata Consultancy Services Stock Analysis 2020

Tata Consultancy Services | LinkedIn

Tata Consultancy Services was started in 1968 by Tata Sons. It is the 2nd largest indian company by market capitalization. It got publicly listed in 2004.

J. R. D. Tata

IT SECTOR

TCS Business

It is a B2B company and provides IT services, consulting to its clients. It has ~4.5 lakh employees that consult clients in 46 countries.

Revenue distribution by geography

Business Areas and Revenue distributions

Business Model

TCS 2020 Business Review

Quarter 1

Launched TCS PacePort New York, a new innovation research center. Transformed India Post with modern mail delivery system that connects 1.5 lakh post offices. Deployed Ignio (TCS AI platform) for canadian food giant Loblaws.

Quarter 2

Launched TCS BaNCS Cloud for Financial services clients. Chosen strategic partner by RBI to implement AI-based Information and management system. Increased holding in TCS Japan Ltd, the Company’s joint venture with Mitsubishi Corporation, from 51% to 66%.

Quarter 3

Declared a special dividend of 40 per share, amounting to over 15,000 crore paid out to shareholders. Petco, America's leading pet specialty retailer, selected TCS Optumera (AI powered retail optimization suite). Expanded strategic partnership with Phoenix Group to digitally transform Standard Life Insurance.

Quarter 4

Israel’s first fully digital bank has signed up as the first customer of TCS’ Banking Service Bureau. Walgreens Boots Alliance, a leader in retail and wholesale pharmacy, expanded its partnership with a 10-year contract.

2021 Strategy and Covid-19 Impact

TCS will go ahead with its new operating model Secure Borderless Workspaces (SBWS) that helps in location independent work. TCS aims that by 2025 only 25% of its employees will require physical office space i.e. promote “Work From Home” for daily office routine.

Covid-19 Impact : Demand for IT services are expected to be adversely affected except from Healthcare clients. Q1 results showed same sign with 13% fall in profit.

Leadership

Natarajan Chandrasekaran, Chairman

Natarajan Chandrasekaran is the chairman of TCS and the Tata Group. He joined TCS in 1987 and was appointed CEO in 2009. He did his MCA from NIT, Trichy.

Rajesh Gopinathan, CEO and MD

Remuneration : 13 crores

Prior Experience : TCS (19 yrs), IIM Ahmedabad (alumni), NIT Trichy (alumni)

N. Ganapathy Subramaniam, COO and ED

Remuneration : 10 crores

Prior Experience : TCS(38 yrs)

V Ramakrishnan, CFO

Tata Consultancy Services Newsroom on Twitter: "V. Ramakrishnan ...

Remuneration : 4 crores

Prior Experience : TCS (21 yrs), ICAI, ICSI

Rajendra Moholkar, Company Secretary

Remuneration : 1.5 crores

Prior Experience : TCS (24 yrs)

Financials

Shareholding Pattern

Balance Sheet Metrics

Reserves

CAG 10 yrs - 16.48%

CAG 3 yrs - (-1)%

Debt/Equity = 0.08

Reserves (2020) = 83,751 crores

Borrowings (2020) = 6906 crores

Profit Loss Metrics

CAG 10 yr (Revenues) - 18.0%

CAG 10 yr (Expenses) - 18.44%

CAG 10 yr (Net Profit) - 16.72%

CAG 3 yr (Revenues) - 10.0%

CAG 3 yr (Expenses) - 10.15%

CAG 3 yr (Net Profit) - 7. 11%

Revenues (2020) - 156,949 crores (100%)

Expenses (2020) - 114,840 crores (73%)

Net Profit (2020) - 32,340 crores (20.6%)

Expense breakdown 2020

Cash Flow Metrics

Operating Cash Flow (2020) - 32,369 crores

Investing Cash Flow (2020) - 8565 crores

Financing Cash Flow (2020) - 39,915 crores

Net Cash Flow (2020) - 1019 crores

Competition Analysis

Thank You.

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