TCS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.5
| Stock Code | TCS | Market Cap | 8,95,079 Cr. | Current Price | 2,474 ₹ | High / Low | 3,630 ₹ |
| Stock P/E | 17.1 | Book Value | 234 ₹ | Dividend Yield | 2.43 % | ROCE | 76.7 % |
| ROE | 65.2 % | Face Value | 1.00 ₹ | DMA 50 | 2,586 ₹ | DMA 200 | 2,964 ₹ |
| Chg in FII Hold | -0.71 % | Chg in DII Hold | 0.53 % | PAT Qtr | 14,526 Cr. | PAT Prev Qtr | 12,684 Cr. |
| RSI | 46.1 | MACD | -17.9 | Volume | 44,27,098 | Avg Vol 1Wk | 45,12,311 |
| Low price | 2,346 ₹ | High price | 3,630 ₹ | PEG Ratio | 1.69 | Debt to equity | 0.11 |
| 52w Index | 9.94 % | Qtr Profit Var | 30.7 % | EPS | 136 ₹ | Industry PE | 21.6 |
📊 TCS (Tata Consultancy Services Ltd.) demonstrates exceptional fundamentals with ROE of 65.2% and ROCE of 76.7%, reflecting world-class efficiency and profitability. EPS of ₹136 provides strong earnings visibility, while quarterly PAT growth of 30.7% (₹14,526 Cr vs ₹12,684 Cr) highlights robust momentum. Valuations remain attractive with a P/E of 17.1 compared to industry average of 21.6, and PEG ratio of 1.69 suggests fair growth-adjusted value. Dividend yield of 2.43% adds income stability. Technical indicators show weakness (RSI 46.1, MACD -17.9), but fundamentals remain highly supportive for long-term investors.
💰 Ideal Entry Price Zone: ₹2,400 – ₹2,500 (aligned with valuation comfort and 52-week low).
📈 Exit / Holding Strategy: Hold for 5+ years; consider partial profit booking near ₹3,500–₹3,600 resistance. Long-term holding is justified given strong profitability metrics, global IT demand, and consistent dividend payouts.
✅ Positive
- Exceptional ROE (65.2%) and ROCE (76.7%) highlight operational efficiency.
- Quarterly PAT growth of 30.7% shows strong earnings momentum.
- EPS of ₹136 supports valuation strength.
- Dividend yield of 2.43% provides steady income support.
- Valuation comfort with P/E (17.1) below industry average (21.6).
⚠️ Limitation
- Weak technical indicators (RSI 46.1, MACD -17.9).
- FII holdings decreased (-0.71%), showing reduced foreign interest.
- Stock trading below 50 DMA (₹2,586) and 200 DMA (₹2,964).
📉 Company Negative News
- Short-term technical weakness with RSI below 50 and bearish MACD.
- Reduced foreign institutional participation.
📈 Company Positive News
- Strong quarterly profit growth and earnings momentum.
- Domestic institutional investors increasing stake (+0.53%).
- Robust fundamentals with high ROE/ROCE and consistent dividend payouts.
🏭 Industry
- IT services sector trading at PE 21.6, offering moderate valuation levels.
- Industry supported by global demand for digital transformation, cloud, and AI services.
🔎 Conclusion
TCS is a strong candidate for long-term investment, driven by exceptional ROE/ROCE, attractive valuations, and consistent dividend support. Entry near ₹2,400–₹2,500 offers favorable risk-reward. Hold for 5+ years with profit booking near ₹3,500–₹3,600 resistance. Despite short-term technical weakness, strong fundamentals and sectoral demand make TCS highly attractive for portfolio inclusion.