TCS Valuation
TCS Valuation
TCS Valuation
Income Statement
(All No. are INR Million, except the per share data)
(Red for Assumptions, Blue for Actual Data, Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25
Year 2013-A 2014-A 2015-A 2016-A 2017-A 2018-A 2019-A 2020-E 2021-E 2022-E 2023-E 2024-E 2025-E
Sales 62,989 81,809 94,648 108,646 117,966 123,104 146,463 156,949 173,272 191,485 211,835 234,599 260,097
Expenses 44,950 56,657 70,167 77,969 85,655 90,588 106,957 114,840 126,659 139,973 154,848 171,488 190,127
Operating Profit 18,040 25,153 24,482 30,677 32,311 32,516 39,506 42,109 46,613 51,513 56,987 63,111 69,970
Other Income 1,178 1,637 3,720 3,084 4,221 3,642 4,311 4,592 4,182 4,182 4,182 4,182 4,182
EBITDA 19,218 26,790 28,201 33,761 36,532 36,158 43,817 46,701 50,794 55,694 61,168 67,292 74,152
Depreciation 1,080 1,349 1,799 1,888 1,987 2,014 2,056 3,529 3,005 3,069 3,199 3,390 3,638
EBIT 18,138 25,440 26,403 31,873 34,545 34,144 41,761 43,172 47,790 52,626 57,970 63,903 70,514
Tax 4,014 6,070 6,239 7,502 8,156 8,212 10,001 9,801 10,957 12,078 13,318 14,694 16,228
Net profit (PAT) 13,917 19,164 19,852 24,270 26,289 25,826 31,472 32,447 36,272 39,986 44,091 48,647 53,725
No. of Share Holders 196 196 196 197 197 192 379 375 375 375 375 375 375
RATIOS:
Dividend Payout 30.94% 32.71% 77.94% 35.31% 35.22% 36.98% 35.75%
OPM 28.64% 30.75% 25.87% 28.24% 27.39% 26.41% 26.97%
Growth
Sales growth YOY 29% 30% 16% 15% 9% 4% 19% 7%
Profit growth YOY 34% 38% 4% 22% 8% -2% 22% 3%
Margins
Operating Profit Margin 28.6% 30.7% 25.9% 28.2% 27.4% 26.4% 27.0% 26.8%
EBITDA Margin 30.5% 32.7% 29.8% 31.1% 31.0% 29.4% 29.9% 29.8%
EBIT Margin 28.8% 31.1% 27.9% 29.3% 29.3% 27.7% 28.5% 27.5%
PBT Margin 28.7% 31.1% 27.8% 29.3% 29.3% 27.7% 28.4% 26.9%
Net Profit Margin 22.1% 23.4% 21.0% 22.3% 22.3% 21.0% 21.5% 20.7%
TATA CONSULTANCY SERVICES LTD
Balance Sheet
(All No. are INR Million, except the per share data)
(Red for Assumptions, Blue for Actual Data, Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25
Year 2013-A 2014-A 2015-A 2016-A 2017-A 2018-A 2019-A 2020-E 2021-E 2022-E 2023-E 2024-E 2025-E
Assets
Non-current assets
Property, plant and equipment 8,641 9,971 10,057 10,216 10,411 10,941 11,050 11,421 12,029 12,854 13,889
Capital work-in-progress 2,762 1,670 1,541 1,278 963 906 906 906 906 906 906
Right-of-use assets - - - 7,994 7,994 7,994 7,994 7,994 7,994
Goodwill 1,572 1,669 1,597 1,745 1,700 1,710 1,710 1,710 1,710 1,710 1,710
Other intangible assets 220 134 47 12 179 283 283 283 283 283 283
Financial assets
Investments 253 343 344 301 239 216 216 216 216 216 216
Trade receivables 67 94 95 74 74 74 74 74 74
Unbilled receivables 143 227 391 324 324 324 324 324 324
Loans receivables 1,581 2,472 9 1,975 60 29 29 29 29 29 29
Other financial assets 1,234 1,325 825 691 738 1,184 1,184 1,184 1,184 1,184 1,184
Income tax assets (net) 4,094 4,465 4,789 4,131 4,017 2,462 2,462 2,462 2,462 2,462 2,462
Deferred tax assets (net) 2,633 2,908 2,828 3,449 2,656 2,828 2,828 2,828 2,828 2,828 2,828
Other assets 1,075 926 689 953 1,363 1,711 1,711 1,711 1,711 1,711 1,711
Total non-current assets - - 24,065 25,883 22,936 25,072 22,812 30,662 30,771 31,142 31,750 32,575 33,610
Current assets
Inventories 15 16 21 26 10 5 5 5 5 5 5
Financial assets
Investments 1,501 22,479 41,636 35,707 29,091 26,140 26,140 26,140 26,140 26,140 26,140
Trade receivables 20,440 24,073 22,617 24,943 27,346 30,532 30,005 34,782 34,552 39,642 39,745
Unbilled receivables 3,827 3,992 5,208 6,686 5,157 5,732 5,732 5,732 5,732 5,732 5,732
Cash and cash equivalents 1,862 6,295 3,597 4,883 7,224 8,646 14,782 21,717 28,748 36,771 45,087
Other balances with banks 16,696 493 552 2,278 5,624 1,020 1,020 1,020 1,020 1,020 1,020
Loans receivables 1,493 2,743 2,909 3,205 8,029 8,475 8,475 8,475 8,475 8,475 8,475
Other financial assets 909 916 1,474 875 1,769 1,473 1,473 1,473 1,473 1,473 1,473
Income tax assets (net) 75 32 26 37 1,853 8 8 8 8 8 8
Other assets 2,083 2,174 2,276 2,584 6,028 8,206 8,206 8,206 8,206 8,206 8,206
Total current assets - - 48,901 63,213 80,316 81,224 92,131 90,237 95,846 107,558 114,359 127,473 135,891
Total Assets - - 72,966 89,096 103,252 106,296 114,943 120,899 126,617 138,700 146,109 160,048 169,501
Liabilities
Non-current liabilities
Financial liabilities
Lease liabilities 115 83 71 54 44 6,906 6,906 6,906 6,906 6,906 6,906
Other financial liabilities 662 493 454 503 287 291 291 291 291 291 291
Unearned and deferred revenue - 503 844 697 697 697 697 697 697
Employee benefit obligations 203 237 245 290 330 417 417 417 417 417 417
Provision 94 40 39 26 - - - - -
Deferred tax liabilities (net) 540 805 919 1,170 1,042 779 779 779 779 779 779
Other liabilities 404 442 432 392 413 - - - - - -
Total non-current liabilities - - 2,018 2,100 2,160 2,938 2,960 9,090 9,090 9,090 9,090 9,090 9,090
Current liabilities
Financial liabilities
Lease liabilities 186 113 200 181 - 1,268 1,268 1,268 1,268 1,268 1,268
Trade payables 8,832 7,541 4,905 5,094 6,292 6,740 3,870 6,486 3,455 5,876 2,609
Other financial liabilities 1,245 2,364 2,924 3,913 4,903 6,100 6,100 6,100 6,100 6,100 6,100
Unearned and deferred revenue 1,062 1,359 1,398 2,032 2,392 2,915 2,915 2,915 2,915 2,915 2,915
Provisions 103 115 66 240 239 293 293 293 293 293 293
Employee benefit obligations 1,356 1,635 1,862 2,018 2,356 2,749 2,749 2,749 2,749 2,749 2,749
Income tax liabilities(net) 546 805 1,412 1,421 2,667 3,712 3,712 3,712 3,712 3,712 3,712
Other liabilities 1,342 1,637 1,745 2,929 3,235 3,283 3,283 3,283 3,283 3,283 3,283
Total current liabilities - - 14,672 15,569 14,512 17,828 22,084 27,060 24,190 26,806 23,775 26,196 22,929
TOTAL EQUITY AND LIABILITIES - - 72,966 89,096 103,252 106,296 114,943 120,899 126,617 138,700 146,109 160,048 169,501
Checksum - - - - - - - - - - - -
PD(20)+ TP(20)+TP(19)/2
COGS(20)/365
TP(20)= PD(20)*COGS(20)/365*2-TP(19)
Working Capital
Debtors
Inventory
Debtor Days
Inventory Turnover
Return on Equity
Return on Capital Emp
Liquidity ratios
Current ratio
Quick ratio
Cash ratio
Solvency ratios
Debt to Equity ratio
interest coverage ratio
Equity as % of total capital
Reserves as % of total capital
Debt as % of total capital
0 0 0
0 0 0
-19 -181 0
-40 -186 -924
-10760 -11472 -37702 -27684 -30519 -33651 -37129 -41005
-24 -13 -1062
-16042 -16045 -227
-26885 -27897 -39915 -27684 -30519 -33651 -37129 -41005
Revenue Mix
Information Technology and Consultancy Services 61223 80140 92702 108646
Sale of Equipment and Software Licenses 1766 1670 1947 0
67 64 70 71 73 76 78 80
9% 4% 19% 7%
10% 0% 17% 6% 8% 8% 8% 8%
3% 14% 28% 10% 17% 17% 17% 17%
10% 6% 6% 7% 6% 6% 6% 6%
12% 4% 13% 6% 8% 8% 8% 8%
8% 2% 20% 5% 9% 9% 9% 9%
34% 4% 19% 4% 9% 9% 9% 9%
64% 8% 13% 9% 10% 10% 10% 10%
15% 7% 17% 5% 10% 10% 10% 10%
-32% 6% 24% 14% 15% 15% 15% 15%
12% 2% 7% 6% 7% 7% 7% 7%
Mar-25
2025-E
260097
11%
3149
83
45%
40%
5%
10%
100%
118270
106466
12187
26404
263327
11%
8%
17%
6%
8%
37%
16%
17%
10%
21%
100%
93815
40187
42401
26243
54221
256867
9%
9%
10%
10%
15%
616069
7%
TATA CONSULTANCY SERVICES LTD
Cost Driver
(All No. are INR Crore, except the per share data)
(Red for Assumptions, Blue for Actual Data, Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16
Year 2013-A 2014-A 2015-A 2016-A
Revenue from Operations in INR 62,989 81,809 94,648 108,646
Revenue from Operation in USD 1,157 1,344 1,545 1,654
Expenses
Employee benefit expenses 24040 29860 27368 30068
Cost of equipment and software licences 0 0 0 0
Other expenses 20910 26797 25182 28846
Finance costs 48 39 80 14
Depreciation and amortisation expense 1080 1349 1394 1559
(Since the DDT is now in the hand of investor, I have assumed that com
10 rupees so now 2020 onwards, for the same case, TCS will pay the div
Dividend payout ratio 41.2% 28.8% 86.2% 39.2%
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
2017-A 2018-A 2019-E 2020-E 2021-E 2022-E 2023-E 2024-E
117,966 123,104 146,463 156,949 173272 191485 211835 234599
1,758 1,909 2,091 2,203 2361 2534 2721 2926
67 64 70 71 73 76 78 80
or, I have assumed that company will pay the div of whole amount. Ie: If earlier, TCS was paying a dividend of 100 and tax on it was
me case, TCS will pay the dividend of 110 rupees)
41.7% 41.7% 36.5% 116.2% 76.3% 76.3% 76.3% 76.3%
Mar-25
2025-E
260097
3149
83
140697
3594
45836
54.1%
1.4%
17.6%
23.2%
41005
76.3%
TATA CONSULTANCY SERVICES LTD
Asset Schedule
(All No. are INR Crore, except the per share data)
(Red for Assumptions, Blue for Actual Data, Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16
Year 2013-A 2014-A 2015-A 2016-A
Dep(18)= D%*{TFA(17)+PFA(17)/2}
D%= Dep(18)/TFA(17)+PFA(17)/2
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
2017-A 2018-A 2019-E 2020-E 2021-E 2022-E 2023-E 2024-E
13,889
283
14,172
3,638
23.51%
4,673
1.8%
TATA CONSULTANCY SERVICES LTD
Valuation DCF
(All No. are INR Lakhs, except the per share data)
(Red for Assumptions, Blue for Actual Data, Black for Calculations)
Valuation Data
Total Debt (Long Term Borrowing) 2,574
Cash & Cash Equivalents (2020) 6,362
Number of Diluted Shares (2021) 87
Tax Rate(2021) 30.00%
Interest Expense Rate (2021) 10%
MV of Equity 16,985
Total Debt 2,574
Total Capital 19,559
WACC
We 87%
Wd 13%
Ke 7.89% Rf+Beta*(Rm-Rf)
Kd 7.00% NOPAT=
WACC 7.8%
FCFF
Explicit Forecast Period
2021 2022 2023 2024
EBIT*(1-Tax Rate) = NOPAT 33,453 36,838 40,579 44,732
Dep 3,005 3,069 3,199 3,390
Purchase of Assets (3,113) (3,440) (3,806) (4,215)
Change in WC (8,479) (9,095) (9,832) (10,693)
FCFF 24,865 27,371 30,140 33,214
% Returns 3410.71%
Rating Buy
Te
6881 4.0% 4.5%
5.3%
5.8%
6.3%
WACC
6.8%
7.3%
7.8%
8.3%
8.8%
9.3%
nd Yeild (Trade Economics)
Nifty + Dividend Yield
heet "Share Price"
Terminal Growth %
5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0%
Gordan Growth Model TV= FCFF(TV)
WACC-g
TATA CONSULTANCY SERVICES LTD
Capitalization
Maximum
75th Percentile
Median
25th Percentile
Minimum
Valuation Statistics
Shree Cement
Ultratech
Birla Soft Corp
Jk Cement
Maximum
75th Percentile
Median
25th Percentile
Minimum
TCS
Enterprise Revenue EPS
Value FY19-20 TTM
42772 437
20550 254
10074 105
6619 15
5463 10
13197 1015 20
60.7x 186.7x
37.4x 84.6x
27.0x 44.9x
23.7x 35.3x
21.7x 23.7x
13.0x 9.8x
TATA CONSULTANCY SERVICES LTD
Cashflow Statement EV=
(All No. are INR Million, except the per share data) EQ Val=
(Red for Assumptions, Blue for Actual Data, Black for Calculations) Imp Share
Multiple
Min 25 %ile Median 75 %ile Max
Relative Valuation
EV/Revenue 21.7x 23.7x 27.0x 37.4x 60.7x
P/E 23.7x 35.3x 44.9x 84.6x 186.7x
DCF Valuation
DCF
"1.5*156949
1.5*156949-Debt+Cash
"(1.5*156949-Debt+Cash)/No of Shares
2000
1800
1600
1400
1200
Returns
1000
800
600
400
200
0
25-Aug-04 25-Jun-05 25-Apr-06 25-Feb-07 25-Dec-07 25-Oct-08 25-Aug-09 25-Jun
Nifty vs TCS Return
-Oct-08 25-Aug-09 25-Jun-10 25-Apr-11 25-Feb-12 25-Dec-12 25-Oct-13 25-Aug-14 25-Jun-15 25-Apr-16 25-Feb-17 25-Dec-17 25-Oct-18 25-Au
NIFTY
TCS