Empirical Study of Financial Performance D R I S H T I U PA D H YAY – A 0 6 1

VA I B H AV I PAT E L – A 0 5 1
and Analysis of IT Industry RAHUL BHIMRAJKA – A053
S I D D H E S H PAWA R – B 0 6 1

S H R E YA S H N I M B O K A R – A 0 6 2
OM BHONGADE – A049
 The IT & BPM sector has become one of the most
significant growth catalysts for the Indian
economy.

The Indian The IT industry accounted for 8% of India’s GDP

in 2020, and it is expected to contribute 10% to
IT industry India’s GDP by 2025.

India is the leading sourcing destination across

the world, accounting for approximately 55%
market share of the US$ 200-250 billion global
services sourcing business in 2019-20.
Fundamental Analysis
•Fundamental analysis evaluates stocks by attempting to measure their
intrinsic value.
•Earnings, expenses, assets, and liabilities all come under scrutiny by
fundamental analysts.
•Using ratio analysis in addition to a thorough review of economic
and financial situations surrounding the company, the analyst is able
to arrive at an intrinsic value for the security.
 Fundamental Analysis

Ratio Analysis of the following 5 IT Companies .

• Tata Consultancy Services
• Infosys
• HCL Technologies
• Wipro
• Tech Mahindra
• Link of our Analysis-
https://docs.google.com/spreadsheets/d/1wnJexcYXxnmEFe2qg_6px0RVw03_vSi0/edit#gid=1662120389
 Quick Ratio
Quick Ratio
1) After comparing all 5 companies
6.00

HCL technologies has a stable

5.00
growth.
4.00

2) All 5 companies are maintaining 3.00

good difference in their current

2.00

asset and current liabilities.

1.00

3) On an average all companies have 0.00

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liquidity of 1.60 times. TCS Infosys HCL Wipro Tech Mahindra
 Debt To Equity Ratio
1) Compare to other 4 companies Infosys in the Debt to Equity Ratio
only company which is debt free in the past 0.35

decade and other companies are close to 0.30

becoming debt free. 0.25

2) Having a little debt is considered idol and 0.20

staying in the range between 2 to 2.5. Here all 0.15

companies are at a very low rate. 0.10

3) In future if company faces any turmoil, they 0.05

can go for debt to recover from the situation. 0.00

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TCS Infosys HCL Wipro Tech Mahindra

 Net Sales Growth
1) Net sales growth of 5-10% is Net sales growth
usually considered good for large 200

cap companies. 150

2) Among the 5 companies, TCS and 100

Infosys were the most stable

50
companies
0
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-50

TCS Infosys HCL Wipro Tech Mahindra

 Price Earnings Ratio
Price to earning ratio for IT sector is high because PE ratio
investors are willing to pay a higher share price 60

today because of growth expectations in the future. 50

Price to earning ratio for Nifty IT Index is 26.16. 40

HCL Technologies, Tech Mahindra and Wipro has 30

lower PE ratio as compared to their peer companies. 20

Infosys and TCS PE ratio is high because after post 10

covid stock price of Infosys and TCS shares have 0

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doubled the investor money. TCS Infosys HCL Wipro Tech Mahindra
 Earning Per Share
All in all, these Indian IT companies have their EPS Earning Per Share
ratio fluctuations on the following factors: 80

1. Earnings per share increases when the total number 60

of outstanding shares decreases in case of buyback. 40

2. When expenses decreases and company can cut the 20

cost then also the earnings of the company increase

with increase in sales. 0
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-20
Earnings per share decreases when company issues
new shares which affect the earnings per share -40

negatively for example in case of rights and bonus. TCS Infosys HCL Wipro Tech Mahindra
 Return on Equity Ratio
1. TCS, Infosys, Wipro and Tech Mahindra ROE had Return To Equity Ratio
slight fluctuation but overall remain constant over 50

the period of 10 years whereas HCL has seen a 45

decline in the ROE. 40

35

30
2. TCS has outperformed Infosys, HCL Technologies, 25

Wipro and Tech Mahindra in return on equity ratio. 20

15

3. From the above interpretation it can be conclude 10

that TCS has given high returns on equity ratio this 5

0
indicates that TCS is using its investors’ funds Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22

effectively. TCS Infosys HCL Wipro Tech Mahindra

 Net Profit Growth
1) Every company showed a positive and Net Profit Growth
upward graph in net profit margin 45000

40000

2) Among the 5 companies, TCS showed 35000

30000
the most positive change if the years 25000

2013 and 2022 are compared. 20000

15000

10000

5000

0
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22

TCS Infosys HCL Wipro Tech Mahindra

 All the IT organizations shrouded right now motivating
execution on offers the front. Benefit after Tax to Sales
Ratio execution of TCS and INFOSYS is on higher facet at
above 20%, at the same time as HCL Technologies and
Wipro have stayed among 12% to 19%. The fortunes of
Tech Mahindra have declined proper now. All the
Conclusion corporations are fee pushed and much less reliant on
borrowings. Keeping tempo with development in Sales,
Working Capital necessities of all corporations have
extended. Current Ratio and Debtors Ratio have proceeded
with OK with remarkable coins possessions.
Thank You