PROJECT REPORT

(Submitted for the degree of B. Com Honours in Accounting and Finance under the University Of Calcutta)

A CASE STUDY OF FINANCIAL PERFORMANCE ANALYSIS

OF TCS LIMITED
Submitted by

Name of the Candidate: TAPAS SAHOO

Registration No.: 046-1114-0476-21
Roll No: 201046-21-0596
College ROLL: 2012100
Name of the College: PRAFULLACHANDRA COLLEGE
Supervised by DR. AINDRILA BISWAS, PRAFULLACHANDRA COLLEGE
MAY2024

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 SUPERVISOR’S CERTIFICATE
This is to certify that Mr TAPAS SAHOO a student of B. Com. Honours in
Accounting and Finance of in business of PRAFULLACHANDRA COLLEGE
under the University of Calcutta has prepared a project report with the title A Case
Study Of Financial Performance Analysis Of TCS Limited.
My contribution however, was mainly in the for general guidance and
discussion.

Name: Aidrila Biswas Signature

Place: Kolkata
Date:
Designation: Assistant Professor, Dept. of Commerce
Name of the college: PRAFULLA CHANDRA COLLEGE

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 STUDENT’S DECLARATION

I hereby declare that the project work with the title A Case Study Of Financial
Performance Analysis Of TCS Limited submitted by me for the partial
fulfilment of the degree of B. Com. Honours in Accounting and Finance under
the Calcutta University is my original work and has not been submitted either to
any other University /Institution for the fulfilment of the requirement for any
course of study.
I also declare that no chapter of this manuscript in whole or in part has been
incorporated in this report from any earlier work done by others or by me.
However, extracts of my literature which has been used for this report has been
duly acknowledged providing details of such literature in the references.

Place: Kolkata
Signature
Date:
Name: Tapas Sahoo
Address: 23, 49, Gariahat Rd, Dhakuria, Kolkata, West Bengal, 700029
C.U. Roll no.: 201046-21-0596
C.U. Registration No.: 046-1114-0476-21

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 ACKNOWLEDGEMENT

I am deeply indebted to my distinguished supervisor Dr Aindrila

Biswas, Associate Professor, PRAFULLACHANDRA COLLEGE, for her
expert advice, able guidance, utmost involvement and whole hearted co-
operation, which inspired me to complete this task successfully. I record my
sincere gratitude and thanks to her for having steered me through my research
work.
My family members, mostly my parents have been a source of tremendous
strength. I would like to whole heartedly thank them all for their constant
support, encouragement and valuable insights in fine-tuning the research work.
I take this opportunity to express my sincere thanks to all my well-wishers for
facilitation to carry out my research work.
TAPAS SAHOO

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INTRRODUCTION 6-7

COMPANY PROFILE 8

INDUSTRY VIEW 9-10

RESEARCH METHODOLOGY 11-15

DATA ANALYSIS AND 17-38

INTERPRETATION
MARKET DATA PRESENTATION 38-49

RESULT DISCUSSION 49-54

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INTRODUCTION
Financial analysis is the
process of evaluating
businesses, projects, budgets
and other finance-related
entities to determine their
performance and suitability. Typically, financial analysis is used to analyze
whether an entity is stable, solvent, liquid or profitable enough to warrant
a monetary investment. When looking at a specific company, a financial
analyst conducts analysis by focusing on the income statement, balance
sheet and cash flow statement. Financial analysis is used to evaluate
economic trends, set financial policy, build long-term plans for business
activity, and identify projects or companies for investment. This is done
through the synthesis of financial numbers and data.
One of the most common ways to analyze financial data is to calculate
ratios from the data to compare against those of other companies or
against the company's own historical performance. For example, return on
assets (ROA) is a common ratio used to determine how efficient a
company is at using its assets and as a measure of profitability. This ratio
could be calculated for several similar companies and compared as part of
a larger analysis.
Financial analysis can be conducted in both corporate finance and
investment finance settings. In corporate finance, the analysis is
conducted internally, using such ratios as net present value (NPV) and
internal rate of return (IRR) to find projects worth executing. A key area of
corporate financial analysis involves extrapolating a company’s past
performance, such as gross revenue or profit margin, into an estimate of
the company’s future performance. This allows the business to forecast
budgets and make decisions based on past trends, such as inventory
levels.
In investment finance, an outside financial analyst conducts financial analysis
for investment purposes. Analysts can either conduct a top-down or bottom-
up investment approach. A top-down approach first looks for macroeconomic
opportunities, such as high-performing sectors, and then drills down to find
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the best companies within that sector. A bottom-up approach, on the other
hand, looks at a specific company and conducts similar ratio analysis to
corporate financial analysis, looking at past performance and expected future
performance as investment indicators.

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 COMPANY PROFILE
Tata Consultancy Services Limited (TCS) is an Indian
multinational information technology (IT) services and consulting
company headquartered in Mumbai. It is a part of the Tata Group
and operates in 150 locations across 46 countries.
IT services, consulting, and business solutions organization that
has been partnering with many of the world's largest businesses in
their transformation journeys for over 50 years.

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 INDUSTRY VIEW
Rationale of the study
Financial analysis nowadays is an important instrument for the critical review
of the performance of a business. It helps the concern to analyze the financial
data and provide information which is required to take decisions regarding
investments and also help to understand financial position better. The
financial analysis portrays the financial health of a company and helps the
companies to improve their financial resources and manage generated funds
efficiently.
Introduction to the industry
IT services in India was established in Mumbai in 1967 with the creation of
TATA Consultancy services who was partnered with Burroughs in 1977 which
beggar export of IT services. IT industry consist of two components i.e. IT
services and business process outsourcing. This sector is consist of software
development consultancies, software management online services and BPO.IT
industry achieved its breakthrough from 1990’s and it is one of the important
industries in India. The main reason for rapid development of IT industry is the
vast reservoir of technically skilled manpower which has transformed India
into software super power. According to an article in the Times of India,
India's liberalization was possible due to its IT industry. In the 1990s, the
industry started off with an export of nearly $100 million with around 5,000
employees. Now it is an industry that thrives globally and India's IT exports
are now around $70 billion with 2.8 million employees working in this sector.
The article states that the IT sector is one of the top two industries in the
country today. (wikipedia, n.d.)
According to an article in the Times of India, India's liberalization was possible
due to its IT industry. In the 1990s, the industry started off with an export of
nearly $100 million with around 5,000 employees. Now it is an industry that
thrives globally and India's IT exports are now around $70 billion with 2.8
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million employees working in this sector. The article states that the IT sector is
one of the top two industries in the country .

The sector has increased its contribution to India's GDP from 1.2% in 1998 to
7.7% in 2017. According to NASSCOM, the sector aggregated revenues of
US$180 billion in 2019, with export revenue standing at US$99 billion and
domestic revenue at US$48 billion, growing by over 13%. As of 2020, India's
IT workforce accounts for 4.36 million employees. The United States accounts
for two-thirds of India's IT services exports. (wikipedia, n.d.)

India’s IT industry is expected to grow at a rate of 12-14% during 2016-2017

as per a report by India’s software industry body national association of
software and services companies (wikipedia, n.d.).This severely states that
information technology is a sector which will make an appearance in the
coming days as India’s economy require more hardware software and IT
services.
One of the biggest benefit of IT industry is the employment it can generate in
India. There are many other benefits like export and foreign direct Investments
(FDI). IT industry is not limited to only software development. Technology is
used in libraries, hospitals, banks, shops, airports and many more other places
through database. Management systems. Among other sectors, IT sector in
India is driving growth for the last decade and more, India is now a major
destination for IT outsourcing. The top IT companies that offer job
opportunities in India are TCS, Wipro Technologies, Cognizant Yahoo,
Google, Tech Mahindra, Infosys Technologies and many more.

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RESEARCH METHODOLOGY
Research is essentially a logical and an organized enquiry seeking facts through
objective verifiable methods in order to discover the relationship among them and to
refer from the board principles or laws. It is really a method of critical thinking.
Research may be defined as a systematic and objective analysis and recording of
controlled observation that may land to the development of generalization of
principles and theories resulting in prediction and possibly ultimate control of
events.
Methodology is often used in a narrow sense to refer to methods, technology or tools
employed for the collection of data as well as its processing. This is also used
sometimes to designate data collected to been done. It provides answers to some of
the major questions while search like what must be do

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ne, how it will be done, what data will be needed, what data gathering devices will be
employed, how sources of data will be analyzed at the conclusion.
DIFFERENT TYPE OF RESEARCH METHODS:
Success of conducting research depends over the result that is gained by the
researcher at the end of the research. These obtained results are affected by the used
methods to conduct research. In this way, there are
Two Types of Methods:
A) Primary Method
B) Secondary Method

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A) Primary Method: All the data that are collected at first time are included
under the primary data collection method. Three approaches or methods are
comprised under the primary data methods such as:
1. Observation method
2. In-depth interview and
3. Survey through questionnaire.
Under the primary data collection method, most of the researchers prefer to use
direct communication with the respondents to reach at the result of the research.
Tata Consultancy Services is a multinational technology company which has
its specialty in IT services and consulting its headquarters in Mumbai
Maharashtra India. TCS is the largest IT sector company in the world by its
market capitalization of $169.2 billion. It is established in 1968, it was founded
by Jamsethji Tata 1848 and it is the India’s most reverence institutions today.
TCS is one of the largest employers of women with 35.3% of women
employees. TCS became the first Indian IT company to reach $100 billion
market capitalization with a value of $102.6 billion in Bombay Stock
Exchange and a second Indian company ever after the Reliance industries that
achieved the same

in 2007. TCS is ranked 10th on the Fortune India 500 list in 2018.It is the
world's 9th largest IT service provider by revenue. TCS is ranked 64th overall
in Forbes World's most innovative company ranking, making it the highest-
ranked IT services company ever. In the latest, TCS, the biggest software
services company, has added 12,000 jobs in the first quarter of 8 .

TCS applies some of its intellectual capital in the direction of investments in

research and innovation, exploring the innovative use of new applied
technologies to solve business problems across different industry verticals. In
addition to its own intellectual capital, TCS also companions with superior
technology providers, start-ups and academic researchers to leverage their
intellectual capital and to generate solutions.
Some of the creative software solutions tested by R&I that are evaluated to
have a material market potential are productized, adding to TCS’ large
portfolio of products and platforms. These expands the enterprise, intelligence
capital create new revenue streams, adding to the financial capital and enhance
its brand positioning that is relationship capital. TCS uses its intellectual
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capital and human assets to build effective, customized technology and
business solutions that address the customer’s business problems. Further, its
ability to stitch together complex, integrated solutions that address the needs of
all stakeholders in the enterprise, along with the high levels of 9 .
.
TCS constantly invests in building newer capabilities and expanding its
offerings. By cross-selling and up-selling these new offerings, customer
engagements continually expand over the years, covering newer and newer
areas of the enterprise’s operations. This further broadens and deepens the
contextual knowledge of customers’ business and IT landscapes, further
enhancing TCS’ intellectual capital. (india education, n.d.)
This combination of business knowledge, contextual knowledge, technology
depth, and intellectual property has become a steadily deepening moat around
the company’s business model and sharpened its differentiated positioning.
(tcs, n.d.)
The investments in people, research and innovation, and intellectual property
creation are all charged off and not capitalized. The company’s capital
expenditure to support its growth – manufacturing capital – towards building
campuses, agile workspaces, innovation centers, and Pace Ports is modest
relative to its size. (tcs, n.d.)
TCS’ physical operations consume social capital in the form of license to
operate in each of the communities, and natural capital in terms of its
environmental footprint. TCS enhances its social capital with local
communities across the world by investing in areas such as education, skill
development, employability, health and wellness, and the environment,
mapped to UN Development Goals. On the environmental front, TCS has a
systematic program to reduce its carbon and resource consumption footprint –
including the use of green IT, green buildings, intelligent energy management
using its own IT-based solution and water and waste recycling. (tcs, n.d.)

TCS’ business model and strategy have resulted in deep and enduring
consumer relationships, a brilliant and engaged workforce, a balanced
expansion of its addressable market, a strong reputation as a responsible
corporate citizen and a proven track record in carry longer term 10

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TCS invests in broadening and deepening customer relationships by
continually looking for new areas in their value chain where it can add value,
proactively investing in building newer capabilities, reskilling its workforce
and launching newer services, solutions, products and platforms. In addition to
the IT budgets, TCS is now benefiting from the departmental budgets of other
stakeholders within the customers’ organizations – business heads, CMOs,
CROs, COOs, CFOs and even CEOs. This has not only embedded TCS deeper
into their businesses but has also resulted in higher quality revenues, stronger
revenue growth and enhanced share of wallet, as evidenced by the client
metrics reported every quarter and every year. (tcs, n.d.)
The products and platforms, coupled with business model innovations,
represent new, high quality revenue streams that are growing very fast. At an
aggregate level, this strategy has resulted in deep and enduring customer
relationships, and a steady expansion of the addressable market. Tcs Limited
is an Indian multinational corporation that provides information technology,
consulting and business process services. It is headquartered in Bangalore,
Karnataka, India. The company was incorporated on 29 December 1945 in
Amalner, Maharashtra by Mohamed Premji as "Western India Palm Refined
Oil Limited", later abbreviated to ”TCS". It was initially set up as a
manufacturer of vegetable and refined oils in Amalner, Maharashtra, British
India, under the trade names of Kisan, Sunflower, and Camel .In 1966, after
Mohamed Premji's death, his son Azim Premji took over Wipro as its chairman
at the age of 21. (wikipedia, n.d.)
In the Indian market, Wipro is a leader in providing IT solutions and services
for the corporate segment in India offering system integration, network
integration, software solutions and IT services. TCS also has profitable
presence in niche market segments of consumer products and lighting. In the
Asia Pacific and Middle East markets, LIKE Wipro provides IT solutions and
services for global corporations. (NDTV, 2012) 11

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 DATA ANALYSIS & INTERPRETATION OF DATA

A. Profitability Ratios

(1) EBITDA Margin: he ebitda margin measures a company’s ebitda as a percentage of the
revenue. The formula to calculate ebitda margin and an example calculation for Tata Consultancy
Services’s trailing twelve months is outlined below:

EBITDA Margin = EBITDA / Total

Revenue
The tables below summarizes Tata Consultancy Services’s performance over the last five years:

Fiscal Year EBITDA Revenue Margin

2020-03-31 408.4 B 1,569.5 B 26.0%
2021-03-31 450.5 B 1,641.8 B 27.4%
2022-03-31 514.9 B 1,917.5 B 26.9%
2023-03-31 576.3 B 2,254.6 B 25.6%
2024-03-31 625.8 B 2,408.9 B 26.0%
The tables below summarizes Tata Consultancy Services’s performance over the last four quarters:

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 YEAR EBITA REVENUE MARGIN
2020-21 408.4 B 1569.5B 26%
2021-22 450.5B 1641.8B 27.4%
2022-23 514.9 B 1917B 26.9%
2023-24 576.3B 2254.6B 25.6%
2024-25 625.8B 2408.9 B 26%

2. Data Interpretation
Liquidity Ratio
Liquidity Ratio is a financial ratio which is used to determine the
company’s abilities to pay its short-term debt. When it comes to financing,
liquidity is a necessary thing to consider about and liquidity ratio is an
essential accounting tool that is used to decide the current debt repaying ability
of a borrower this ratio shows. Whether and individual or enterprise can pay
off its short term dues besides any exterior financial help.
Current Ratio
Current Ratio suggests the financial capability of an enterprise to set off
the current obligations by utilizing its current assets.
Formula
Current Ratio= TCS WIPRO
Current
Assets/Current
Liabilities YEAR
2016 3.3 2.7
2017 4.2 2.9
2018 4.8 2.8
2019 6.4 3.5
2020 4.7 2.9
Mean 4.68 2.96
Standard Deviation 1.130044 0.31305
Coefficient of 0.241 0.105
variance

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Growth 0.42 7.4

Interpretation
The ideal quick ratio is 1, if the quick ratio is 1:1 then it indicates that the
company can pay its current debts by without selling its long term assets. If a
company has a quick ratio higher than the 1:1 this means company owns more
quick assets than current liabilities. From the above table it can be concluded
that by comparing between the two companies TCS has more quick assets than
WIPRO and TCS can pay its currents debts without selling its long term assets.
In the year 2016, 2017, 2018 the quick ratio of TCS is increasing in the year
2019 the quick ratio of TCS was the highest with 6.4:1 this means that the in
the 2019 TCS has the more quick assets and in the year 2020 the company’s
quick ratio reduced from 6.4 to 4.7 it means TCS must have sold its quick
assets to pay off its debt. WIPRO ltd quick ratio is increasing and decreasing
from 2.8 to 2.9 and again in 2019 WIPRO ltd has its highest quick ratio of 3.5
and in the year 2020 WIPRO ltd must have sold its quick assets to pay off its
current debts.
Gross Profit.

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-
Gross Profit Ratio is ratio which has the relationship between gross profit and
Net revenue of the companies. It is used to measure a company’s financial
health, the amount left from sales after subtracting the cost of goods sold.
The higher attrition among women in FY 2023 is a setback to our efforts
to promote gender diversity but we are doubling down
on it. Focused leadership development programs like iExcel
are driving tremendous change. Of all the leadership positions
fulfilled with internal candidates in FY 2023, women made up
23% of the selected candidates, even though they account for
only 14% of the applicant pool. This speaks well of the quality
of the women candidates in our leadership pool as well as
the supportive attitudes of our business leaders in promoting
diversity. Likewise, in our external hiring, women make up 38.1%
of our net hires this year, versus 35.7% in our world.

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Formula
Gross Profit/Net TCS ltd WIPRO ltd
Sales*100 Year
2016 29.80% 18.14%
2017 27.52% 16.25%
2018 26.86% 15.18%
2019 26.99% 16.38%
2020 26.39% 16.77%
Mean 27.51 16.544
Standard Deviation 1.340 1.0691

Interpretation
The higher the gross profit margin the better it is. A higher gross profit
margin indicates the company did it well in managing its cost of sales. From
the above table it can be conclude that comparing between the two companies
TCS TCS has the higher the gross profit margin and it is performing well. In
the year 2016 TCS has the highest gross profit ratio. In the year 2016 Wipro ltd
also had the highest gross profit margin and it drop down in 2017 but after
2017 it starts increasing.
0
Net Profit Ratio
Net Profit ratio, calculates how much net income or profit it generates as
percentage of revenue. It is the most important indicators of company’s
financial health. It is a popular profitability ratio that shows relationship
between net profit after tax and net sales.
Formulae
Net Profit/Net Sales

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 Gross Profit Ratio
TCS
WIPRO
Formulae
Net Profit/Net Sales*100 26

Year TCS ltd WIPRO ltd

2016 26.87% 17.22%
2017 25.51% 15.82%
2018 25.92% 17.27%
2019 24.4% 17.72%
2020 25.33% 18.35%
Mean 25.606 17.276
Standard Deviation 0.89994 0.9318
Coefficient of variance 0.0351 0.0539
Growth -5.73% 6.56%

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Formula
Gross Profit/Net TCS ltd WIPRO ltd
Sales*100 Year
2016 29.80% 18.14%
2017 27.52% 16.25%
2018 26.86% 15.18%
2019 26.99% 16.38%
2020 26.39% 16.77%
Mean 27.51 16.544
Standard Deviation 1.340 1.0691

by continually looking for new opportunities and newer areas in

their businesses to add value, proactively investing in building
newer capabilities, reskilling its workforce and launching newer
services, solutions, products and platforms to address those
opportunities.
In the last few years, the company has been using its
investments in research and innovation, its intellectual property
and deep contextual knowledge of the customer’s business
and technology landscape to proactively pitch ideas and
solutions designed to improve the client’s topline and help drive
competitive differentiation.
These growth and transformation engagements are
higher value engagements catering to the needs of a broader
set of stakeholders in the client organization, enjoying greater
visibility within the CXO suite and more closely aligned with
their business strategy. An expanding share of this business is
helping drive a steady increase in the scope and scale of services
consumed year after year, and an expansion of TCS’ share of
wallet, as evidenced by the client metrics.
Over time, this strategy has resulted in deep and enduring point

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Strategic Responses to Opportunities and Threats
Opportunity / Threat TCS Approach Outcomes
Macroeconomic
uncertainty impacting
decision making
and prompting cost
reduction initiatives
• Proven track record in helping enterprises reduce their cost
of operations.
• Proactive pitching of IT and business operating model
transformations that not only deliver greater efficiency, but
also enhance enterprise agility, resilience and throughput.
• Leveraging full services capability and deep client
relationships to propose product-aligned operating models.
• Use of TCS Cognix™ to accelerate operations
transformation, using over 600 pre-built automation
components that infuse AI/ML and other technologies into
IT and business processes to reduce human intervention,
increase velocity and throughput.
• Strong deal flow resulting in a
robust order book that gives better
visibility of medium-term growth.
• Market share gains in vendor
consolidations.
• Efficiency gains helping fund
client’s transformation programs in
some instances.
• TCS Cognix recognized as a means
of driving quicker realization of RoI
and used by nearly 300 clients..

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TCS aims to attract, develop, motivate and retain diverse talent,
that is critical for its competitive differentiation and continued
success. The company’s talent management strategy seeks
to maximize the potential of every employee by creating a
purpose-driven, inclusive, stimulating, and rewarding work
environment, delivering outstanding employee experience,
while fueling business growth. TCS strives to create a vibrant
workplace and an engaged workforce by encouraging four
behaviors: follow your passion, stay hungry, commit to lifelong
learning and thrive together.
In FY 2023, TCS made a net addition of 22,600 employees
globally, taking the total employee base to 614,795, representing
150 nationalities.
After two years of remote working, TCS initiated a Return
to Office initiative to better integrate and acculturate new
recruits, deepen employee engagement levels, drive purposeful
engagement and extend the spirit of #OneTCS. As an outcome,
50% of employees started working from office for two or more
days in a week.

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TCS continued to expand and deepen its industry-leadingportfolio of products
and platforms, launching new variants\within the ignio™ suite and building
newer functionality and
features in the TCS BaNCS™ suite, HOBS, TwinX, Mastercraftand Jile. TCS
Omnistore™ now offers three more modulesas part of its AI powered
enterprise personalization – Unified and composable commerce, Enterprise
personalization, and Marketing hub.
vTCS continued to expand and deepen its industry-leading
portfolio of products and platforms, launching new variants within the ignio™
suite and building newer functionality and
features in the TCS BaNCS™ suite, HOBS, TwinX, Mastercraft and Jile.
TCS Omnistore™ now offers three more modulesas part of its AI powered
enterprise personalization - Unified
and composable commerce, Enterprise personalization, and
Marketing
The company has leveraged its deep domain knowledge across
multiple industries to create an extensive catalog of over 100
industry cloud offerings addressing the needs of clients across 20 industries.
The portfolio of TCS solutions available on public
hyperscaler cloud platforms continued to expand. In FY 2023, TCS Dexam™,
TCS DigiGov™, TCS Cognitive Plant Operations,
TCS Mobility Cloud Suite and TCS ESG Integrator were added to the list of
existing solutions like TCS Omnistore™, MasterCraft™,
5G Edge Suite, TwinX, TCS Clever Energy™, TCS IP2™ and T
Over time, this strategy has resulted in deep and enduring
customer relationships, a vibrant and engaged workforce,
industry-leading profitability, a steady expansion of the
addressable market, and a proven..

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deducting the taxes is good.
Operating Ratio
Operating Ratio shows the efficiency of company’s management by comparing the total operating
expense of a company to net sales. It shows how efficiently company is keeping its cost low while
generating revenue. The smaller the ratio the more efficient the company is at generating revenue.
Formulae=Cost of TCS WIPRO
Goods Sold +
Operating
Expense/Net Sales
*100 Year
2016 31.50 18.91
2017 29.22 17.06
2018 28.56 15.47
2019 28.38 17.04
2020 28.44 17.32
Mean 29.22 17.16
Standard deviation 1.3179 1.2215
Coefficient of variance 0.0451 0.0711
Growth -9.71 -9.25

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Interpretation
it shows the efficiency of company’s management by comparing the total
operating expense of a company to net sales. Its shows how efficiently
company’s is keeping its cost low while generating revenue. The smaller the
ratio the more efficient the company is at generating revenue. In the above the
table it can be concluded that company ltd operating expIenses are low.
Cash Profit Margin
Some Researchers used Earnings before Interest and Tax and Depreciation and
Amortization, to sales ratio called cash profit margin, to calculate operating
performance. It is cash flow ratio which measures cash of operating activities
as a percentage of sales revenue in a given period. It measures how efficiently a
company’s convert sales into cash. It is indicator of earnings quality, because it
includes

transaction that involve actual transfer of money.

Formula= Cash TCS
flow from
operating
activities /Net
sales*100 Year
2016 23.47

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Debt to Equity Ratio
TCS
Interpretation
A low amount of debt indicates that the company is getting financing more
from funding from shareholders. A higher ratio indicates that the company is
getting finance by more borrowing money, which subjects the company to
potential risk if debt levels are too high. From the above table it can be
concluded that TCS is getting finance more from borrowing debts and from the
last five years the ratio starts decreasing and this is satisfactory, and Wipro ltd
debt to equity ratio is low which means the company is getting financing from
shareholders and over the last five year the ratio starts decreasing which is
satisfactory.
Return on Equity capital
It is used to measure financial performance of the companies. It is considered
to measure of the profitability of a company in relation to shareholders equity.
It is calculated by dividing net income by shareholders equity. Because
shareholders equity is equal to a company’s assets minus its debt, ROE is
considered the return on net assets.

Formula= Net Profit after Interest, Tax and Preference Dividend)/ Paid-up Equity
Capital*100

Year TCS ltd WIPRO ltd

2016 22.33 17.38
2017 22.28 15.31
2018 20.97 14.68
2019 21.48 15.25
2020 20.60 15.90
Mean 21.532 15.704
Standard Deviation 0.771 1.031
Coefficient of 0.035 0.065
Variance
Growth -7.74 -0.0008

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Return on equity capital

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Interpretation
If the ratio is higher the return will be more and it is good for the company and
it indicates that the return to the shareholders are getting are satisfactory. From
the above table it can be concluded that from both the companies TCS has the
higher return on equity capital in the year 2016 with 22.33 and its growth all
over the year is decreasing. 33

Return on capital Employed

Return on Capital Employed, it is a profitability ratio which measures
how efficiently a company is using its capital to generate profits. It is
considered one of the best profitability ratios and it is used by investors to
determine whether a company is suitable to invest in or not.

Formula= Earnings before Interest and Tax/Capital Employed*100

Year TCS ltd

2016 51.31
2017 46.66
2018 39.99
2019 39.94
2020 44.72
Mean 44.524
Standard 4.8015
Deviation
Coefficient of 0.1078
Variance
Growth -12.84

Interpretation
Higher the return on capital employed is always more favorable as it indicates
that more profits are generated of capital employed. From the above table it can
be concluded that comparing the two companies TCS has the higher return on
its capital employed which indicates that more profits are generated from the
31 | P a g e
capital employed. The company had the highest return on capital employees is
in the year 2016 it drop down in the year 2017 and 2018 after 2018 it starts get
increasing.

Inventory turnover ratio

This ratio establishes a relationship between the cost of goods sold during a
given period and the average amount of inventory carried during that period.
The main objectives of this ratio is to find out whether stock has been used
efficiently or not and to check up whether only the required minimum amount
has been invested in stock

. Year TCS
2016 6790.38
2017 5617.43
2018 4734.77
2019 14646.3
2020 31389.8
Mean 12635.7
Standard Deviation 11198.3
Coefficient of 0.88
Variance
Growth 3.622

Interpretation
A low turnover ratio implies that weak sales and possibly excess inventory,
also known as overstocking. A high ratio on the other hand implies either
strong sales or insufficient inventory. From the above table it can be conclude
that TCS has the highest inventory ratio with 31389.3 times it implies that the
TCS ltd has the highest sales in comparison to Wipro ltd.

32 | P a g e
Return on long term fund
Long term return is a calculation which provides investors with a return
estimate they can target over a long period of time in a company. This measure
can be comparable to a savings account rate.

 Formula

Earnings before Interest and Tax /Net Capital Employed

0
2017 40.03 21.69
2018 40.08 20.63
2019 46.66 20.72
2020 51.31 23.26
Mean 44.57 22.29
Standard 4.759 1.924
Deviation
Coefficient of 0.106 0.086
Variance
Growth 14.55 -7.5

33 | P a g e
Debtors Turnover Ratio

This is also called the Trade Receivables Ratio. It establishes a relationship between net
credit sales and average debtors of the year and indicates the speed with which the amount is
collected from debtors. (gupta, 2020).

Formula= Year TCS

2016 4.88
2017 5.05
2018 5.18
2019 5.60
2020 5.42
Mean 5.226

Standard Deviation 0.287

Coefficient of 0.054
Variance

Growth 11.06

4.2 Hypothesis Testing

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 For the analysis of financial position, of the companies under study, an inter
comparison of firms has done from ratio analysis. Here are the following observations and
conclusions.
1. Current Ratio

The ideal ratio for current ratio is 2:1 and from the above data of five years for
both the companies it has been concluded that the ratios of both the companies is
higher than the ideal ratio 2:1 and it indicates that the companies are in the
position to pay off its short term dues.
In the above case null hypothesis is rejected there is a significant relationship
between the financial positions of both the companies.
2. Quick Ratio

The ideal ratio for quick ratio is 1:1 and from the above data of five years for
both the companies it has been concluded that the ratios of both the companies is
higher than the ideal ratio of 1:1which shows that the company has quick assets
more than the current liabilities and its assets are easily convertible into cash.
In the above case null hypothesis is rejected there is a significant relationship
between the financial position of both the companies.
3. Gross profit ratio

The ideal percentage of gross profit ratio is 65% it is considered to be healthy

from the above data of five years for both the companies it has been concluded
that the ratios of both the company TCS ltd the gross profit ratio is lower than the
ideal ratio which means companies need to increase their profits.
In the above case null hypothesis has been rejected there is a significant
relationship between the financial position of both the companies.

4. Net Profit ratio

The good percentage of net profit which is considered is 20%. From the above
data of all five years for the company TCS is has been concluded that TCS net
profit margin is higher.
than the ideal percentage it shows that TCS is in good position and the net profit
margin of Wipro ltd is less than 20%.

35 | P a g e
In the above case alternative hypothesis has been rejected there is a significant difference
between the financial position of both the companies

5. Operating Ratio

The ideal percentage of operating ratio should be less than 60%. From the above
data of all the five years for the compayTCS. It has been concluded that the
operating margin of the company is lower than the 60% which means the
company operation expense are lower which is good.
In the above ratio the null hypothesis has been rejected there is a significant
relationship between the financial positions of both the companies.
6. Cash profit margin
The ideal percentage of cash profit margin is 60%. From the above data of all the
five years for both the companies TCS and Wipro ltd it has been concluded that
the cash profit margin of both the companies is lower than the ideal percentage
60% and it indicated that both the companies has lower level of profitability.
In the above ratio null hypothesis has been rejected there is a significant
relationship between the financial position of the companies.

7. Debt to Equity Ratio

The ideal ratio for debt to equity ratio is 2:1. From the above data of all the five
years for both the companies TCS it has been concluded that the debt to equity
ratio of both the companies is lower than the ideal ratio 2:1 which is good it
indicated that both the companies does not totally depend on debt.
In the above ratio null hypothesis has been rejected there is a significant
relationship between the financial position of the companies.

8. Return on Capital Employed

The ideal percentage for return on capital is up to 10%. From the above data of
all the five years for both the companies TCS and Wipro ltd it has been

36 | P a g e
concluded that both the companies have higher percentage than 10% which is
good.
In the above ratio alternative hypothesis has been rejected there is a significant
difference between the financial position of both the companies.

10. Inventory Turnover Ratio

The ideal ratio for inventory turnover ratio is between 5 to 10 times. From
the above data of all the five years for the s TCS it has been concluded that both
the companies have much more higher percentage than 10% which indicates
there sales are more.
In the above ratio alternative hypothesis has been rejected there is a significant
difference between the financial position of the company.

37 | P a g e
 MARKET PRICE DATA

Month
NSE BSE
High (`) Low (`) Total Data Basis Exclusions
Financial TCS’ consolidated global operations. None Human Resources Generic
topics: TCS’ global operations,
including wholly owned subsidiaries. Statutory topics: TCS’ India operations.
Non wholly owned subsidiaries accounting for < 0.26% of the consolidated
headcount. Exclusions pertaining to individual disclosures are mentioned in the
respective Notes.
Environmental TCS’ global offices and delivery centers where it has operational
control.
Centers where TCS does not have operational control accounting for < 2%
headcount.nu
Products/services5

Details of business activities (accounting for 90% of the turnover):

TCS provides IT services, consulting and business solutions to many of
the world’s largest businesses in their transformational
journeys. Segment revenue s, year on year growth, a brief commentary and
segment margins are provided in the Financial
Performance Overview section of Management Discussion and Analysis, which
is a part of this Integrated Annual Report.
. Products/Services sold by the entity (accounting for 90% of the entity’s

Turnover):
Application Development and Maintenance, Consulting and Service
Integration, Digital Transformation Services, Cognitive
Business Operations and Products and Platforms.
Some of the services broadly map to NIC classes 6201, 6202, 6209 and 6311.m
capital
Number of
accounts
Percentage to total
accounts

38 | P a g e
  TCS reported 2.6% QoQ growth to US$6,696 million (mn) while it grew 11.8% on
a YoY basis. The company reported 14.3% YoY growth in CC terms for Q4. For
FY22, TCS reported revenues of US$25.707 billion (bn), up 15.9% over FY21,
CC growth of 15.4% over FY21
 In terms of revenues by geographies (in CC terms), the North America market
(53% of mix), grew 18.7% YoY while UK and Continental Europe reported
relatively muted growth of +13% and 10% YoY, respectively. Asia Pacific, India
and MEA regions grew 5.5%, 7.0% and 7.3% YoY, respectively
 Vertical wise, BFSI, retail & healthcare grew 12.9%, 22.1% and 16.4% YoY while
manufacturing, technology & services and media grew 19.0%, 18.0% and 18.7%
YoY, respectively
 As per the management, the demand environment continues to be strong as
reflected in the deal pipeline. The management indicated that in a scenario where
clients are facing cost pressure, technology spend is the last area to get hit since
technology spend is now looked as a solution enabler vs. being discretionary spend
earlier
 Attrition was at 17.4% (up from 15.3% in the previous quarter) but the
management indicated that quarterly annualised attrition has started tapering
down. The company added 35,209 associates in Q4, taking the total to 592195. It
is the highest quarterly addition ever. For FY22, it added more than 1 lakh
employees, which is 2.5x net adds it did in FY21
 The company’s TCV for the quarter was at US$11.3 bn. However, TCS indicated
that it includes two large deals of US$1 bn each (as per our understanding, second
phase of Passport Seva could one of those large deals, which was won by TCS as
per media reports) while the adjusted number is US$9.3 bn. The company
indicated that steady state deal win number for the quarter could be in the range of
US$8-8.5 bn, going forward
 EBIT margin for the quarter was flat QoQ at 25%. There was -90 bps impact due
to supply side challenges. It was mitigated by operating efficiency (not quantified)
and +10 bps currency benefit. The company indicated that there would be
volatility in margins in the near to medium term due to supply side challenges but
maintained long term aspirational EBIT margin guidance band of 26-28%
 TCS indicated that it is planning to hire 40,000 freshers in FY23, which would
help in pyramid optimisation
 The company indicated that growth in continental Europe for the quarter was
muted due to some re-allocation in client budget in the region due to emergence of

39 | P a g e
 multiple scenarios on account of current geopolitical headwinds. TCS indicated
that growth in the regions would moderate till the issues settle down
 TCS indicated that the current digital transformation opportunity has three
horizons where horizon 1 pertains to moving one’s onsite applications to cloud,
which is currently playing out. There are further opportunities, which are termed
as Horizon 2 (cloud native application development) and Horizon 3 (end to end
ecosystem play for sectors like pharma, manufacturing, etc)
 The company indicated that it has formed a new operating model for the future
wherein employees are being aligned to the new structure. The rationale for the
new operating structure is to be able to align the right people for management of
customer lifecycle and strengthen their position as a preferred partner in case of
vendor consolidation from the client’s side

Parameter FY 2022-23 FY 2021-22

40 | P a g e
 In terms of Regulation 40(1) of SEBI Listing Regulations, as
amended from time to time, transfer, transmission and transposition of securities
shall be effected only in dematerialized form.
Pursuant to SEBI Circular dated January 25, 2022, the listed companies shall
issue the securities in dematerialized form only,
for processing any service requests from shareholders viz., issue of duplicate
share certificates, endorsement, transmission,

41 | P a g e
transposition, etc. After processing the service request, a letter of confirmation
will be issued to the shareholders and
shall be valid for a period of 120 days, within which the shareholder shall make a
request to the Depository Participant for
dematerializing those shares. If the shareholders fail to submit the
dematerialisation request within 120 days, then the
Company shall credit those shares in the Suspense Escrow Demat account held
by the Company. Shareholders can claim
these shares transferred to Suspense Escrow Demat account on submission of
necessary documentation.
The Directors and certain Company officials (including Chief Financial Officer
and Company Secretary) are authorized by the
Board severally to approve transfers, which are noted at subsequent Board
Meeting..
Dematerialization of shares and liquidity
The Company’s shares are compulsorily traded in dematerialized form
on NSE and BSE. Equity shares of the Company
representing 99.98 percent of the Company’s equity share capital are
dematerialized as on March 31, 2023.
Under the Depository System, the International Securities Identification Number
(ISIN) allotted to the Company’s shares is
INE467B01029.
Outstanding GDRs/ADRs/Warrants or any convertible instruments,
conversion date and likely impact on equity
The Company has not issued any GDRs/ADRs/Warrants or any
convertible instruments in the past and hence, as on
March 31, 2023, the Company does not have any outstanding
GDRs/ADRs/Warrants or any convertible instruments.

42 | P a g e
Commodity price risk or foreign exchange risk and hedging activities
The Company does not deal in commodities and hence the disclosure
pursuant to SEBI Circular dated November 15, 2018 is
not required to be given. For a detailed discussion on foreign exchange risk and
hedging activities, please refer to Management
Discussion and Analysis Report.
Loans and advances
The Company has not given any loans and advances to firms/company in which
directors are interested
. Equity shares in the suspense account

In accordance with the requirement of Regulation 34(3) and Part F of

Schedule V to the SEBI Listing Regulations, details of
Transfer of unclaimed/unpaid amounts to the Investor Education
and Protection Fund
Pursuant to Sections 124 and 125 of the Act read with the Investor Education and
Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), dividend, if not
claimed for a period of seven years from the date of
transfer to Unpaid Dividend Account of the Company, are liable to be transferred
to IEPF.
Further, all the shares in respect of which dividend has remained unclaimed for
seven consecutive years or more from the date
of transfer to unpaid dividend account shall also be transferred to IEPF Authority.
The said requirement does not apply to shares
in respect of which there is a specific order of Court, Tribunal or Statutory
Authority, restraining any transfer of the shares.
In the interest of the shareholders, the Company sends periodical reminders to the
shareholders to claim their dividends
in order to avoid transfer of dividends/shares to IEPF Authority. Notices in this
regard are also published in the newspapers
and the details of unclaimed dividends and shareholders whose shares are liable
to be transferred to the IEPF Authority, are
uploaded on the Company’s website

43 | P a g e
In light of the aforesaid provisions, the Company has during the year, transferred
to IEPF the unclaimed dividends,
outstanding for seven years, of the Company, erstwhile CMC Limited (since
amalgamated with the Company). Further, shares
of the Company, in respect of which dividend has not been claimed for seven
consecutive years or more from the date of
transfer to unpaid dividend account, have also been transferred to the demat
account of IEPF Authority.
Financial year Amount of unclaimed dividend transferred
(` lakh)
Number of shares transferred

2014-15 214.43* 589

2015-16 168.93* 643
47
TOTAL 383.36 232
50

After verification of the aforesaid documents submitted, Company will issue an

entitlement letter.
. File Form IEPF-5 on IEPF website and send self-attested copies of IEPF-5 form
along with the acknowledgement (SRN),
Indemnity bond and entitlement letter to RTA.
On receipt of the physical documents mentioned above, Company will submit e-
Ve
report, for further
processing by the IEPF Authority.
Members are requested to note that no claims shall lie against the Company in
respect of the dividend/shares transferred to IEPF.

44 | P a g e
45 | P a g e
46 | P a g e
 INR in Million 2022 Weight 2023 Weight Delta
Banking, Financial
751,260 39.2 % 861,270 38.2 % +14.64%
Services and Insurance
Communication, Media
318,740 16.6 % 376,530 16.7 % +18.13%
and Technology
Retail and Consumer 307,150 16.0 % 375,060 16.6 % +22.11%
Life Sciences and
204,620 10.7 % 246,050 10.9 % +20.25%
Healthcare
Manufacturing 186,100 9.7 % 212,360 9.4 % +14.11%
Others 149,670 7.8 % 183,310 8.1 % +22.48%
Sales per region
INR in Million 2022 Weight 2023 Weight Delta
North America 968,650 50.5 % 1,203,360 53.4 % +24.23%
United Kingdom 303,990 15.9 % 338,610 15.0 % +11.39%
Europe 307,430 16.0 % 335,750 14.9 % +9.21%
Asia Pacific 169,270 8.8 % 181,320 8.0 % +7.12%
India 98,050 5.1 % 112,710 5.0 % +14.95%
Middle East and Africa 38,080 2.0 % 42,830 1.9 % +12.47%
Latin America 32,070 1.7 % 40,000 1.8 % +24.73%

Shareholders
Name Equities % Valuation
71.74
Tata Sons Pvt Ltd. 2,595,499,419 121 B ₹
%
Life Insurance Corporation of 4.867 8 199 M
176,085,768
India (Investment Portfolio) % ₹
1.212 2 041 M
SBI Funds Management Ltd. 43,833,399
% ₹
UTI Asset Management Co. Ltd. 0.5437
19,672,192 916 M ₹
(Investment Management) %
0.4434
Axis Asset Management Co. Ltd. 16,042,179 747 M ₹
%
HDFC Asset Management Co. 0.3620
13,097,476 610 M ₹
Ltd. (Invt Mgmt) %
SBI Life Insurance Co. Ltd. 9,290,220 0.2568 433 M ₹

47 | P a g e
 Name Equities % Valuation
(Investment Portfolio) %
Nippon Life India Asset 0.2038
7,373,709 343 M ₹
Management Ltd. (Invt Mgmt) %
0.1998
Tata Asset Management Ltd. 7,230,014 337 M ₹
%
Kotak Mahindra Asset Management Co. Ltd. 7,126,737 0.1970 % 332 M ₹

The company announced a 15-year expansion of its partnership with Aviva, the UK’s
leading insurance, wealth, and retirement provider, to transform Aviva’s UK Life
business and enhance the customer experience by leveraging the TCS BaNCS-based
platform.
Looking at the company's financials, the company posted a 2.48% QoQ drop in its
consolidated net profit to ₹11,097 crore in Q3 FY23. In the preceding quarter (Q2
FY24), it reported a net profit of ₹11,380 crore.
Comparing the year-on-year (YoY) performance, there was a 2% improvement in net
profit. In the same quarter a year ago, the company recorded a net profit of ₹10,883
crore. During the quarter, the company's net profit was affected by a one-time charge
of ₹958 crore, allocated towards the settlement of a legal claim.

48 | P a g e
 Results and Discussions

 Major Findings
 Discussions and Suggestions
 Conclusion

49 | P a g e
Major Findings
Current ratio of is good. Especially of TCS in particular industry ,
net profit ratio of TCS is good it is more than ideal ratio Wipro ltd. net profit ratio
is also good it is less than ideal ratio bit it is more than average ratio which is
good. Operating ratio is low which is good both the companies especially Wipro
is keeping its operating expenses low. Debt to equity ratio is very good both the
companies are less depended on debt specially TCS it more depends on equity
then debt. The return on equity are good more than ideal ratio of TCS. Return on
capital employed are very good of both the companies it indicates the profits are
generated more from capital employed. Inventory turnover of both the companies
indicates the good sales, less stock. The return on long term funds are good which
shows that lenders and creditors are at safety margins.

Discussions and Suggestions

the companies need to increase their gross profit ratio by reducing cost
of goods sold without changing your selling price. A decrease in cost of goods
sold will cause an increase in gross profit margin. Net profit ratio, Wipro ltd has
less profit margin then the ideal percentage. It can get better by increasing
revenues through selling more goods and services or by increasing prices. In
comparison to TCS Inventory turnover ratio of Wipro ltd is need to be increased
from proper forecasting and effective marketing and bye negotiating price rates
regularly.

Conclusion

TCS is leading companies in the information and technology industry. the

companies have and important role to play for the economy as well as investors.
With references to the above analysis the financial position of TCS can be said as
better than that ANY Company in market As seen in the above analysis,.
Although it is not an alarm warning situation for but in comparison to TCS ltd it
should improve its management efficiency in utilizing the shareholders fund and
it should work on its marketing skills. 44
Objectives Conclusions

50 | P a g e
It is used to analyze the short
terms fund of companies
The use of ratio in accounting
and financial management to
know the profitability financial
position and operating efficiency
of an enterprise
It is used to analyze the liquidity
position of both the companies.
Short term funds of both
companies are satisfactory
TCS has the satisfactory
profitability position
Between the both companies o is
satisfactory.
Liquidity position of both the
companies are satisfactory.

Unsatisfied (or partially satisfied) performance obligations are subject to variability due to
several factors such as terminations,
changes in scope of contracts, periodic revalidations of the estimates, economic factors
(changes in currency rates, tax laws etc).
The aggregate value of transaction price allocated to unsatisfied (or partially satisfied
performance obligations is `1,38,231 crore
out of which 53.17% is expected to be recognised as revenue in the next year and the balance
thereafter. No consideration from contracts with customers is excluded from the amount
mentioned above..

51 | P a g e
 SUGGESTION
1. Company should focus on Input cost. The company input cost is high
that’s why their profitability is decreasing.
2. Company should focus on supply chain. That will effect on their
increment in sales

52 | P a g e
 CONCLUSION
The study undertaken has brought into the light of following conclusions.
The financial Statement plays a crucial role in development of any company. So,
this research focus on it.
This study develops and empirically tests a number of methods of analyzing
financial ratios to predict “TATA CONSULTACY SERVICES” success or loss.
Methods of analysis found useful are: - Profitability Ratio, Return Ratio,
Leverage Ratio, Efficiency Ratio,MARKET SIZE
Overall conclusion of the company is good. Except in Profitability of the
company.

53 | P a g e
 REFERENCE
Wikipedia information details
https://en.wikipedia.org/wiki/Tata_Consultancy_Services
https://en.wikipedia.org/wiki/Tata_Consultancy_Services#:~:text=Tata
%20Consultancy%20Services%20Limited%20(TCS,more%20than
%20601%2C546%20employees%20worldwide.

Srinivasan, 2022-23 A Study on Financial Ratio Analysis TCS

https://www.tcs.com/content/dam/tcs/investor-relations/financial-
statements/2022-23/ar/annual-report-2022-2023.pdf

21-22
https://www.tcs.com/content/dam/tcs/investor-relations/financial-
statements/2021-22/ar/annual-report-2021-2022.pdf

TCS DETAILS
https://www.tcs.com/

Bhatt R. (2012). “Profitability Ratio Analysis with Specific Reference to Indian

Petroleum Industry- An Empirical Analysis.” Indian Journal of
Accounting,XLIII(1),
Kumbhaj R. & Y. “Financial Analysis of Tcs with respect to Ratio Analysis.”
Altius Shodh Journal of Management & Commerce,

54 | P a g e