25 November 2012 Sector: IT Consulting & Software CMP: 1288 Rating: BUY Target Price: 1500 Stock Info
Investment Period: 15months Introduction: Tata Consultancy Services Limited is an Indian multinational information technology services, business solutions and outsourcing Services Company founded by JRD Tata in the year 1968 headquartered in Mumbai. TCS is a subsidiary of the Tata Group. It is one of India's most valuable companies and is the largest India‐based IT services company by 2012 revenues. It has 183 offices across 43 countries and 117 delivery centres across 21 countries. It also has 58 subsidiary companies. Products & Services: TCS provides a wide range of IT related products & services such as; application development, BPO (business process outsourcing), consulting, enterprise software, payment processing, software management and education services. Following are the service lines and their percentage to the total TCS revenue in the Q2 2012‐13:‐ Application development and maintenance: ADM is a part of IT that works with the business to develop new software, keep it running and make ongoing improvements. Asset leverage solutions: Assurance services: Assurance services provide independent and professional opinions that reduce the information risk (risk that comes from incorrect information). Business intelligence: BI is the ability of an organization to collect, maintain, and organize knowledge. This produces large amounts of information that can help develop new opportunities.
Market Cap: 2,52,109crs Equity: 195.7crs Face Value: 1 52 Week H/L: 1438‐1045
Key Financials (in crores) Net Sales EBIDTA Margin % Net Profit EPS Dividend FY 11‐12 38,858.55 33.87 13366.33 55.97 25 FY 10‐11 29,275.40 29.47 8700.44 38.62 14
FY 11‐12 20.60 8.5 55.31 44.24 0.72
FY 10‐11 23.7 10.4 44.38 38.80 na
Price to Earning Price to Book RoCE % RoNW % Beta
3months 1year 5.3%
Share Holding Pattern (%) Promoter FII DII Retail & Others 74 15 6.5 4.5
Promoter and Promoter group: Tata Sons Ltd – 73.75% Others – 0.25% Foreign Institutional Investors: Number of FII Shareholders – 853 some of them include; ........................ Domestic Institutional Investors: Life Insurance Corporation of India – 3.10% Franklin Templeton Investment Funds – 1.67% Others – 1.73% Retail & Others: Individuals with value less than 1lac – 3.5% Individuals with value more than 1lac – 1%
Dividend Policy (Mar’12): Indicators TCS Wipro EPS D/P Ratio (%) D/R Ratio (%) Div Yield (%) Face Value Book value 55.97 52 48 1.94 1 19 36.60 63.40 1.64 2
HCL 28.13 49.50 50.50 1.87 2 95.25
Business process outsourcing: BPO is a subset of outsourcing that involves the contracting of operations and responsibilities of specific business functions or process to a third party service provider. Consulting: IT consulting is a field that focuses on advising businesses on how best to use information technology to meet their business objectives. Engineering and Industrial services: E&I services help evolve the right innovative solutions that deliver engineering excellence and operational efficiency, ensuring a competitive advantage. Enterprise solutions: An enterprise solution is any business tool that reliably empowers you to access, share and apply resources with any of your peers and customers, anywhere, at any time. IT infrastructure services: IT Infrastructure Services (IS) Or Infrastructure Management Services (IMS) deliver end‐to‐end, effective and reliable solutions that transform help to business operations. Services Contribution to Quarter on overall revenue Quarter (%) (%) AMD 43.1 3.8 Engg Srvcs ...
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