TATA CONSULTANCY SERVICES LTD - Quantamental Equity Research Report

Quantamental Equity Research on TATA CONSULTANCY SERVICES LTD | Release: 13 Jan 2019 00:07:01 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:TCS and BSE CODE:532540
Last Close:  INR 1842.55
Fair Value:  INR 1163.9
Est. Price by Mar 19:  INR 1519.4
Market Capitalization (INR Crs):  691395.64
Industry:  IT Consulting & Software
Rating:  SELL
Downside:  -18%
Company Profile
Tata Consultancy Services Limited (TCS) is engaged in providing information technology (IT) services, digital and business solutions. The Company's segments include banking, finance and insurance services (BFSI); manufacturing; retail and consumer packaged goods (CPG); telecom, media and entertainment
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 4% 44% 104%  
EBIT % -1% 29% 88%  
Earnings % -2% 30% 86%  
Book Value %  -1% 68% 121%  
Stock Total Return %  35% 25% 116%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 72.05  
(B) FII/FPI 16.06  
(C) DII/Insurance Companies 7.03  
(D) Public holding < 2 lakhs of cap. 3.10  
(E) Others 1.76  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 396 595 573 737 1091 1268 1241 1177 1588 1519 1772 1998 2181 2309  
Return on Equity 38% 37% 35% 36% 39% 39% 34% 31% 30% 27% 26% 25% 23% 21%  
Price to Earning  11.1 12.9 10.8 10.4 11.1 12.5 10.1 8.8 11.8 20.8 20.8 20.8 20.8 20.8  
EVTI 2.4 3.0 2.3 2.2 2.5 2.5 2.0 1.6 2.1 3.5 3.5 3.4 3.4 3.3  
EVTIFM 11.1 12.9 10.8 10.4 11.1 12.5 10.1 8.8 11.8 20.8 20.8 20.8 20.8 20.8  
Price to Book Value 4.2 4.8 3.8 3.7 4.3 4.9 3.4 2.7 3.6 5.6 5.4 5.1 4.8 4.4  
Debt to Equity  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0  
Dividend Yield 5% 2% 4% 3% 3% 6% 4% 4% 3% 2% 2% 2% 2% 2%  
Cash Flow to Firm 11% 2% 7% 6% 7% 9% 14% 20% 10% 6% 6% 7% 7% 7%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales  1,23,104.00  1,46,667.52  1,69,556.26  1,90,022.68  2,06,241.66  2,16,553.74  
EBITDA     36,158.00     44,019.33     50,888.92     57,031.51     61,899.31     64,994.28  
EBIT     34,144.00     41,619.82     48,464.63     54,667.88     59,678.39     63,175.52  
PBT     34,092.00     41,567.82     48,464.63     54,667.88     59,678.39     63,175.52  
NPAT     25,826.00     27,381.67     31,924.75     36,010.97     39,311.51     41,615.15  
Price to Earning             11.77            20.82            20.82            20.82            20.82            20.82  
Price to Book Value              3.57              5.56              5.41              5.14              4.79              4.39  
Debt to Equity               0.00                  -                    -                    -                    -                    -    
Return on Equity              0.30              0.27              0.26              0.25              0.23              0.21  
Enterprise Value to Total Income (EVTI)              2.12              3.47              3.46              3.43              3.38              3.32  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            12.07            22.81            22.60            22.27            21.81            21.25  
Price or Est. Share Prices       1,587.72       1,519.40       1,771.50       1,998.25       2,181.40       2,309.25  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT     41,567.82     48,464.63     54,667.88     59,678.39     63,175.52  
Interest            52.00                  -                    -                    -                    -    
Depreciation       2,399.50       2,424.29       2,363.63       2,220.93       1,818.76  
Cash Flow Before Tax     44,019.33     50,888.92     57,031.51     61,899.31     64,994.28  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax     29,057.16     33,591.78     37,646.50     40,859.74     42,902.72  
Terminal Cash Flow                                                                                      -    6,21,925.98  
Total Cash Flow     29,057.16     33,591.78     37,646.50     40,859.74  6,64,828.70  
Present Value of Cash Flow  4,36,723.37  
Debt                  -    
Value of Equity  4,36,723.37  
Fair Value Per Share       1,163.90  
Equity       6,91,396
Debt               247
Beta Take from Reuters 0.987
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                 52
Tax Benefit                 13
Interest Net of Tax                 39
Debt               247
Cost of Debt 16%
Cost of Equity 15%
Debt Weight 0%
Equity Weight 100%
WACC 15%
Cash Flow of Mar-23 E     42,902.72
Growth 7.3%
Present Value of Terminal Cashflow  6,21,925.98
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  TCS        1,842.55       6,91,396          202.93            47.90            39.57              4.21            22.61              9.08            22.86                  -                1.38            30.19            79.50       1,54,004            69.93               100              1.31            20.82              2.58            24.10          602.37
   2  Infosys           683.50       2,98,597          148.75            27.21            29.52              3.01            22.54              4.60            19.95                  -                3.18            11.14            13.92          88,612            12.82               105              3.84            20.27           -12.19           -29.64          340.05
   3  HCL Technologies           940.05       1,30,914          294.67            35.10            31.02              2.06            13.46              3.19            14.13              0.02              1.27            28.39            30.19          60,576            60.17                 58              7.08            19.52              4.24            14.82          664.45
   4  Wipro           328.70       1,48,739          114.24            19.55            16.95              2.18            23.07              2.88            19.21              0.29              0.30            18.45            35.87          60,821            74.31               119              2.37              8.53           -10.93           -13.82          208.55
   5  Tech Mahindra           699.20          68,609          196.66            28.11            24.77              1.80            17.05              3.56            16.66              0.13              2.00            18.96            22.21          35,220            35.96                 78              4.27            13.46            17.60            26.29          454.48
   6  Oracle Fin.Serv.        3,637.35          31,192          548.91            37.59            46.14              5.65            22.67              6.63            24.38                  -                3.56              3.88              3.53            5,052            73.53               103             -9.78              2.00           -12.40              2.96       1,360.55

Comments

Post a Comment

Popular Posts