Tata Consultancy Services
Tata Consultancy Services demonstrates strong business quality and financial health, supported by impressive profitability metrics such as a high ROE and ROCE. While revenue growth has been consistent, profit growth shows a slightly lower CAGR. The company maintains a healthy balance sheet with minimal debt and robust cash flow generation, underscoring operational efficiency. The current valuation suggests a reasonable price with a positive margin of safety, indicating potential for long-term value creation.
Business Performance (CAGR)
Valuation Snapshot
Financial Health
Profitability Metrics
Cash Flow Intelligence
Intrinsic Value
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AI Business Verdict
Tata Consultancy Services presents a strong profile for long-term value creation, driven by excellent profitability, robust financial health, and consistent, though moderating, growth. The current valuation offers a reasonable entry point with a positive margin of safety.
- Exceptional profitability with high ROE (45.89%) and ROCE (56.29%).
- Very strong financial health, characterized by minimal debt (Debt-to-Equity 0.11) and high interest coverage.
- Consistent revenue growth (9.50% CAGR) over the period.
- Robust cash flow generation, with OCF to PAT over 100% and substantial Free Cash Flow.
Balance Sheet
Tata Consultancy Services maintains a balanced sheet with adequate liquidity and manageable leverage.
Capacity to fund growth, withstand downturns and return capital.
- Tata Consultancy Services maintains a balanced sheet with adequate liquidity and manageable leverage.
- Net cash position — debt fully covered by cash & investments
- Large cash & investment reserves
- Very low leverage with net cash balance
- High interest coverage
- Long working capital cycle
- Large 'other assets' bucket — investigate composition
- Slow book value compounding