Our 4th company in the Series of Best Stocks to Buy in India for Long term 2021 is Tata Consultancy Services Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Tata Consultancy Services Limited provides information technology (IT) and IT enabled services worldwide. The company operates through Banking, Financial Services and Insurance; Manufacturing; Retail and Consumer Business; Communication, Media and Technology; and Others segments. It offers CHROMA, a cloud-based talent management solution; ignio, a cognitive automation software product; TCS iON, an assessment platform; TAP, a procurement offering; TCS Master Craft, a platform to automate and manage IT processes; Quartz, a blockchain solution; and TCS Omni Store, a commerce platform.
Now Let’s check the important fundamental figures of this company. This is a large cap company with Market Cap ₹13,96,077cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 43.05
Sector PE Ratio: 38.19
PE Ratio of this company is high than Sector’s PE. So it’s a Average PE than the peers of this company.
PB Ratio : 16.03
Sector PB Ratio : 9.22
PB Ratio of this company is high than Sector’s PB ratio. So it’s Below Average PB than the peers of this company.
Dividend Yield : 1.01%
Sector Dividend Yield : 1.13%
Dividend of this company is low than Sector’s dividend. So it’s Average PB than the peers of this company.
ROE: 37.52%
ROCE: 47.21%
ROE (Return on equity) and ROCE (Return on capital equity) is Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 1,67,311.00 | 32,430.00 |
| 2020 | 1,61,541.00 | 32,340.00 |
| 2019 | 1,50,774.00 | 31,472.00 |
| 2018 | 1,26,746.00 | 25,826.00 |
You can see the company growth clearly in the above table, in 2019 Net profit was 31,472.00 Cr. only and in 2020, It increased to 32,340.00 Cr. and in 2021, it is increased to 32,430.00 Cr.
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 42,884.00 | 35,371.00 | 24,002.00 | 19,596.00 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021 , Company have 42,884.00 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| 35,727.00 | 29,639.00 | 26,362.00 | 23,205.00 |
Debt Level: TCS is debt free.
Reducing Debt: TCS has no debt compared to 5 years ago when its debt to equity ratio was 0.01%.
Debt Coverage: TCS has no debt, therefore it does not need to be covered by operating cash flow.
Interest Coverage: TCS has no debt, therefore coverage of interest payments is not a concern.
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 72.19% | 15.43% | 2.96% | 4.89% | 4.53% |
| Mar 2021 | 72.19% | 15.62% | 2.85% | 4.89% | 4.45% |
| Dec 2020 | 72.05% | 15.88% | 2.73% | 4.92% | 4.43% |
| Sep 2020 | 72.05% | 16.00% | 2.84% | 4.96% | 4.15% |
Above table showing there is no big change in Promotors holding which is 72.19% in June 2021. FIIs invested in June 2021 with 15.43% and retail investor is 4.53%.
Now We’ll check the return of the company, This company given 60.73% returns in last 1 year from 2020 to 8 Sep 2021.
Investment Checklist for Tata Consultancy Services Ltd.
- The company is currently profitable
- Earnings are forecast to grow by an average of 9.8% per year for the next 3 years
- They are debt free
- Dividend of 1.01% is sustainable
- Share price has been stable over the past 3 months
- The company’s earnings are high quality
- Profit margins improved or TCS became profitable
- They have sufficient analyst coverage
- No concerning events detected
- Shareholders have not been meaningfully diluted in the past year or recently listed
- Revenue is meaningful (₹1,713B)
- Market cap is meaningful (₹13,961B)
- TCS does not have negative shareholders equity.
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 3350 to 3400
Target: 4000 (25% Upside)
Time Horizon: 1 Year
Risk Profile: Low Risk (Stock is 1.88x as volatile as Nifty)
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Hope you liked Our 4th company in the Series of Best stocks to buy in India for Long term 2021. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
Disclaimer: This is an Educational Initiative and is NOT registered under any SEBI regulations. All the information that we provide is just for Educational purposes and you should consult your financial adviser before taking any investment decision. Also we do NOT provide any form of Stock Tips or Advise on stocks or portfolios. My All Trades Only Education Purpose. All trades will be at your risk. You have the responsibility of any trade or any benefit or loss