• 11th February 2019
  • Sameer Mungekar
  • 0

Overview:

Tata Consultancy Services was founded by the late J R D Tata and F C Kohli in the year 1968.The company started as a provider of punch card services and other basic IT services to a couple of companies in India. It’s headquarters is in Mumbai, India. Over the next fifty years, the company grew from being a small IT start up, to becoming the largest Indian company registered in the Indian stock exchanges, in terms of market capitalization.

TCS got listed on the Indian stock exchanges in 2004. It is currently valued at over 100 billion USD. It’s annual revenue in 2018 was 19 billion USD. The company operates in the Information Technology, business consulting and outsourcing space. Total assets in 2018 stand at USD 16.66 billion and Equity capital contributes USD 13.41 billion to its assets. The debt to equity ratio stands at zero. It has acquired several Indian and foreign companies in its fifty years journey.

TCS has 284 offices in 46 countries and 147 delivery centres in 21 countries across the globe. The total employee strength is over 400,000, globally, most of them being Indians. It ranks as the third largest employer in the Information Technology space after IBM and HP. It is the fourth largest employer in India after the Indian Railways, Indian Army and Indian Postal Service.

Board of Directors:

TCS parent company is the Tata Group. TCS has an issued, subscribed and paid up capital of 3.5 billion shares of rupees 1 each. TCS equity shares are trading at Rs.1920/- per share as on the date this article is being written, in the last week of January 2019. The board of directors include Mr Natarajan Chandrashekaran as chairman and Mr Rajesh Gopinathan as managing director and CEO. Mr N Ganapathy Subramaniam is the Chief Operating Officer and Executive Director.

Clients and Services:

TCS has several leading organizations, globally, as their clients. They have clients across the following industries: Banking and Finance, Insurance, Manufacturing, Retail, IT and Hitech, Energy, Health Care, Government and public sector, Travel, Transportation and Hospitality, Communication and Media. The list of clients in the above industries include: Citibank UK, State Bank of India, Aviva, Aegon UK, Bombardier, Nissan, Cummins, Asda, Woolworths, GET Power, Scottish Water, Vedanta, AstraZeneca, Cardinal Health, University of Alberta, Indian Passport Service, Malaysian Airlines, KLM, Quantas, to name a few.

TCS offers solutions in the following domains: Cognitive Business, Consulting, Analytics, Automation and Artificial Intelligence, Internet of Things, Cloud Applications, Cloud Infrastructure, Cyber Security, Industrial Engineering, Quality Engineering, Enterprise.

The Road Ahead:

TCS has, in the last fifty years, built a strong brand for itself. It has built strong and lasting relationships with all stakeholders. The company’s customer centric attitude and ability to change and adapt to new technologies, has built tremendous brand equity and brand loyalty. It’s ability to scale up and deliver concrete and sustainable results in key technologies has established TCS as a reliable brand the world over. It has managed to keep its investors happy. The market value of TCS shares has gained tremendously since its listing in 2004. The company has given regular dividends and bonus shares from time to time. It has been recognized as one of the best companies to work with, in employee surveys across the world.

The company promotes itself through other strategies such as sponsoring health and fitness and sports events, across the world. It sponsors ten marathons world wide, such as marathons in Singapore, New York, London, Amsterdam, Mumbai, and Canberra. Other events sponsored by TCS include the Davos Reception, TCS Summit and TCS Innovation Forum. TCS has been recognized as one of the top 50 companies that changed the world by Forbes in 2018. It has been recognized as one of the top two thousand companies in the world by revenue in 2017. It has been recognized as one of the Top hundred brands in the US and a Super Brand in the UK.

Financials (2017-2018):
Year 31st March 2018 2017 2016 2015 2014
Revenue 123,104 117,966 108,646 94,648 81,809
Total Expenses 92,645 87,674 80,024 72,069 58,044
Operating Profit 30,502 30,324 28,789 25,424 23,808
Operating Margin 24.80% 25.70% 26.5% 26.90% 29.10%
Profit before Taxes 34,092 34,513 31,675 25,808 25,401
Income Tax Paid 8,212 8,156 7,301 6,238 6,070
Profit after Tax 25,880 26,357 24,291 19,852 19,163
EPS 134.19 133.41 123.18 111.87 97.67

Notes:
Income Statement:
Employee cost to total revenue: 53.9%
Other Operating Costs to total revenue: 19.7%
Total Cost to total revenue: 73.6%
Profit before tax to total revenue: 27.7%
Tax to total revenue: 6.7%
Profit after tax to total revenue: 21.0%

Revenue Break up:
Banking and Financial Services: 39.3%
Communications, Media and Technology: 17.2%
Retail: 17.1%
Manufacturing: 10.9%
Others: 15.5%

Major Growth areas (Sectors) in constant currency terms:
Energy and Utilities: 26.8%
Travel and Hospitality: 22.4%
Life Sciences and Health Care: 11.9%
Communications and Media: 11.6%
Major Growth areas (Geographically) in constant currency terms:
Continental Europe: 19.1%
UK: 8.6%
Latin America: 7.8%
India: 6.9%

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