TCS - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.7

📊 Core Financials Analysis

Profitability & Returns

ROE: 52.4% and ROCE: 64.6% are world-class — TCS is a benchmark for capital efficiency.

EPS of ₹136 and consistent quarterly PAT growth (₹12,760 Cr. vs ₹12,224 Cr.) reflect strong earnings momentum.

Debt & Liquidity

Debt-to-equity ratio of 0.10 indicates near-zero leverage — excellent financial health.

Strong cash flows and dividend yield of 1.96% add to shareholder value.

Growth

Quarterly profit growth of ~6% is steady.

PEG ratio of 2.74 suggests moderate overvaluation relative to growth, but justified by quality.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 22.4 Undervalued vs. industry PE of 29.1

P/B Ratio ~11.7 High, but typical for premium tech stocks

PEG Ratio 2.74 Slightly expensive, but acceptable for a market leader

Intrinsic Value Near CMP or slightly higher Supported by strong fundamentals

🏢 Business Model & Competitive Advantage

Business Model: Global IT services and consulting, with diversified verticals across BFSI, retail, healthcare, and manufacturing.

Competitive Edge

Scale, brand, and global delivery model.

Deep client relationships and high renewal rates.

Strong moat in talent, execution, and innovation.

Risks

RSI of 20.1 indicates oversold territory — potential short-term rebound.

MACD negative, but long-term fundamentals remain intact.

📌 Entry Zone & Investment Guidance

Entry Zone: ₹3,050–₹3,150 range is attractive, especially near 52-week low and RSI oversold levels.

Long-Term View

Strong buy for long-term investors.

Ideal for SIP-style accumulation.

Hold for compounding returns, dividend income, and portfolio stability.

Would you like a peer comparison with Infosys, HCL Tech, or Wipro to see how TCS stacks up in the IT space?

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