Hello, in today’s post we are going to do a complete analysis of Tata Consultancy Services Limited i.e. TCS Company, in which we will also talk about the SWOT analysis of the company i.e. Strengths, Weaknesses, Opportunities, and Threats. With the complete analysis of a company, you can know about the company better and you can also take the decision of whether to invest in a company or not, so let’s start today’s video.
How does TCS start?
Tata Consultancy Services Limited was started in 1968 by JRD TATA. That is, today it has been more than 50 years since TCS started. Earlier it was known as “Tata Computer Systems”. Initially, TCS used to manufacture punch cards for its own group company TISCO which is now known as Tata Steel.
Tata Consultancy Services Limited ie TCS is an Indian Multinational IT Services and Consulting company headquartered in Mumbai. TCS is a subsidiary of TATA Group and is working in 149 locations in 46 countries.
TCS
TCS is the second-largest Indian company by market capitalization. Today the market cap of TCS is more than Rs 9 lakh crore. Tata Consultancy Services is now counted among the most valuable IT Services Brands across the globe.
Now let’s talk about the SWOT analysis of the company, in which let’s talk first.
About the Strengths of TCS Company-
Customers from Different Markets — TCS has a client base in different industries like banking, financial services, retail, telecom & media, and entertainment, etc. Which is a Positive Signal.
TCS has strategically expanded into Geographically Diversified Markets throughout the world including North America, the UK, Middle East Europe, Africa, and Asia-Pacific.
The company’s Return on Capital Employed i.e. ROCE is continuously improved for the last 2 years. Return on Capital Employed is a Financial Ratio that helps in finding out Generate, Profit Percentage from the Total Capital employed on a business. That is, RoCE tells how well the company is using its capital to generate returns in the business.
The Net Profit of the Company is increasing on Quarter on Quarter Basis. The company is generating good cash from Core Business and Cash Flow is continuously improving for the last 2 years. Foreign Institutional investors are increasing their shareholding.
For the last 2 years, the company is effectively using the shareholders’ funds, that is, the return on equity is improved from the last 2 years. Return on Equity is an important financial ratio that helps in measuring the profit of the company. RoE helps in the measurement of the company’s efficiency by using the equity of the shareholder. In other words, it measures how well the company is earning a return on the shareholder’s money. This is one of the most useful ratios from the perspective of investors.
There is no debt on the company.
The company’s Annual Net Profit is also improving continuously for 2 years.
Now let’s talk about the Weaknesses of the company-
Legal battle: In 2014, TCS was accused of misusing confidential information from a software company, Epic Systems. In 2016, TCS was found guilty and ordered to pay $940 million in damages. TCS opposed the decision and challenged it. The image of the company is affected by such incidents.
Company’s Book Value Per Share is decreasing from last 2 years.
The Net Cash Flow of the company is decreasing i.e. the company is having trouble in maintaining the cash flow.
TCS subsidiary Diligenta has consistently performed below average.
Now let’s talk about Opportunities-
The company’s sales and profit are increasing with strong price momentum.
Digital Transformation Technologies- The world is becoming digital and so business dynamics are also changing into a digital economy. TCS’s focus is on transforming itself digitally and providing digital solutions. TCS should be ready to spend more on digital transformation technologies.
With the advent of digital transforming technology and fast internet connectivity, the whole world is moving towards cloud-based solutions and the expenses on cloud services are expected to grow at more than 19% compound annual growth rate i.e. CAGR in the next 5 years. TCS has a solid infrastructure to provide cloud-based solutions and hence it is a good opportunity for TCS.
Now let’s talk about Threats-
Immigration restrictions — With strict immigration restrictions, an increase in H-1B visa fees,s and changing political situation in the US, Indian IT companies may find it difficult to do business as it will affect their cost and profit, and hence it will affect the IT industry. danger to.
TCS faces intense competition from companies like Wipro, Infosys, Accenture, Capgemini, and Deloitte. Due to this, there are pricing wars in the industry and the share in the market becomes limited.
Now let’s talk about the Financial Highlights of TCS Company-
The company’s revenue in the financial year 2019–20 was Rs 1,56,949 crore, which was Rs 1,17,966 crore in the financial year 2016–17. That is, the company’s revenue has increased by about 25% in the last 3 years.
TCS finances
The company’s Profit Before Tax stood at Rs 42,248 crore this financial year, which was Rs 34,513 crore three years ago. That is, in the last 3 years, the profit before tax of the company has increased by about 19%.
TCS analysis
If we talk about the profit after tax of the company, then in the financial year 2019–20 it stood at Rs 32,340 crore, which was Rs 26,289 crore in the financial year 2016–17. That is, the company’s Profit after Tax has also increased by about 19% in the last 3 years.
TCS profit
Talking about Basic Earnings Per Share in the financial year 2019–20, it was Rs 86.19 which was Rs 133.41 3 years ago. That is, the company’s Basic Earnings Per Share has decreased by about 36% in the last 3 years.
TCS basic
According to the Annual Report of TCS Company, as of 31 March 2020, the number of shareholders of the company has increased to 32,340 which was 31,472 1 year ago. That is, the number of shareholders in the company has increased by about 3% in the last 1 year.
TCS shareholders
How is the management of the company?
Talking about the Board of Directors of the Company, Rajesh Gopinathan is the Chief Executive Officer and Managing Director of the Company, N G Subramaniam is the Chief Operating Officer and Executive Director of the Company, N Chandrasekaran is the Chairman of the Company, Aarthi Subramanian is the Director of the Company. Apart from this, O P Bhatt, Don Callahan, Dr. Pradeep Kumar Khosla, and Keki M are Independent Directors of the Mistry Company.
So this was the complete analysis of TCS company which also includes SWOT analysis, after this analysis, you will be able to understand this company better and you will be able to easily take your decision regarding investment in the company. Next, which company do you want a complete analysis of, tell us by commenting, thank you!
