A

PROJECT REPORT

ON

"Financial Performance Assessment of Tata Consultancy Services:

A Strategic Perspective"

A Report Submitted To

Rashtrasant Tukadoji Maharaj Nagpur University

As Required in Partial Fulfillment of The Award of Degree of

Masters Of Business Administration

Specialization in Financial Management and HR Management

Submitted By: MAYURI SURESHRAO KOLHE

Project Guide: DR. ANANT DESHMUKH

Department Of Business Management, Rashtrasant Tukadoji Maharaj Nagpur

University, Nagpur

SESSION 2024-2025
 RASHTRASANT TUKADOJI MAHARAJ NAGPUR UNIVERSITY
DEPARTMENT OF BUSINESS MANAGEMENT
(Autonomous)
Law College Campus, Amravati Road, Nagpur
Established by Government of Central Provinces Education Department by Notification No. 513 dated the 1 st of
August, 1923 & presently a State University governed by Maharashtra Public Universities Act, 2016 (Maharashtra
Act No. VI of 2017)

CERTIFICATE

This is to certify that the investigation described in this report titled "Financial Performance
Assessment of Tata Consultancy Services: A Strategic Perspective" has been carried out by
Mayuri Sureshrao Kolhe of MBA Sem IV as a part of Project Dissertation, in partial fulfilment of the
requirement for the degree of Master of Business Administration of R.T.M. Nagpur University,
Nagpur.

This work is the own work of the candidate, complete in all respects and is of sufficiently high standard
to warrant its submission to the said degree. The assistance and resources used for this work are duly
acknowledged.

Place: Nagpur Dr. ANANT DESHMUKH Dr. ANANT DESHMUKH

Date: (Guide) (Head of Department)
 DECLARATION

I Mayuri Sureshrao Kolhe, hereby declare that with the exception of suggestions and guidance
received from my Supervisor, Dr. Anant Deshmukh, this project work titled "Financial
Performance Assessment of Tata Consultancy Services: A Strategic Perspective" is my own
hard work. This report as one, which is substantially the same as this, has not been submitted by
me for any other examination of this University or any other University.

Place: Nagpur Mayuri Sureshrao Kolhe

Date: M.B.A. 4TH SEM

3
 ACKNOWLEDGEMENT

The compilation of the dissertation in the present form would not have been possible but for the
valuable guidance, assistance, encouragement and contribution of various people at different
stages of time.

I am grateful to my guide, DR. ANANT DESHMUKH, who helped me to organize my

thoughts, work and study so as to compile this project report. It was due to his constant guidance
and support that I was able to study the topic in a detailed and analytical manner.

I would also like to thank, DR. ANANT DESHMUKH (H.O.D) of, RTMNU, Department of
Business Management, Nagpur, for giving me the opportunity to present this report.

Place:- Nagpur Mayuri Sureshrao Kolhe

Date:- MBA (4tℎ Semester)

4
 TABLE OF CONTENTS

Serial No. Name of Chapter No. of Pages

INTRODUCTION 9-15
1
1.1 Introduction to the Topic
1.2 Objectives of the study
1.3 Hypothesis
1.4 Limitations of the Study
1.5 Scope of the Study
REVIEW OF LITERATURE 16
2
2.1 Literature Review
RESEARCH METHODOLOGY 17-18
3.1 Research design and type of study
3 3.2 Sources of data
3.3 Tools of data analysis
4 COMPANY PROFILE 19-31
4.1 Company Overview
4.2 Products and Services
4.3 Financial Performance Summary
DATA ANALYSIS & INTERPRETATION 32-50
5.1 Income Statement Analysis
5
5.2 Balance Sheet Analysis
5.3 Ratio Analysis
5.4 Trend Analysis & Graphical Interpretation
FINDINGS, SUGGESTIONS & 51-55
RECOMMENDATIONS
6 6.1 Key Findings
6.2 Suggestions & Strategic Recommendations
7 CONCLUSION 56-58
8 BIBLIOGRAPHY 59
9 ANNEXURE 60

5
 GLOSSARY

This section defines key terms and financial concepts used throughout the project for
better clarity and understanding.

1. Revenue: The total amount of money earned by a company from its operations,
before any expenses are deducted.

6
2. Net Profit: Also known as net income, it represents the company’s total earnings
after deducting all operating expenses, interest, taxes, and other costs.

3. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a

measure of a company's overall financial performance and profitability.

4. Return on Equity (ROE): A measure of financial performance calculated by dividing

net income by shareholders’ equity. It indicates how effectively a company uses equity
to generate profits.

5. Earnings Per Share (EPS): The portion of a company’s profit allocated to each
outstanding share of common stock. It is an important indicator of profitability.

6. Current Ratio: A liquidity ratio that measures a company’s ability to pay short-term
obligations with current assets.

7. Quick Ratio: Also known as the acid-test ratio, it measures a company’s ability to
meet short-term obligations with its most liquid assets.

7
8. Debt-Equity Ratio: This ratio compares a company’s total liabilities to its
shareholder equity, indicating the financial leverage and risk level.

9. Dividend Payout: The portion of net income that is distributed to shareholders as

dividends. TCS is known for maintaining a consistent dividend payout policy.

10. Balance Sheet: A financial statement that provides a snapshot of a company’s

assets, liabilities, and shareholders’ equity at a specific point in time.

11. Income Statement: Also known as the profit and loss statement, it shows the
company’s revenues and expenses over a specific period.

12. Trend Analysis: The practice of collecting information from historical data and
analyzing it to identify patterns or trends over time.

13. IT Services Industry: Refers to businesses that provide services such as software
development, consulting, infrastructure management, and digital transformation to
clients.

14. Consolidated Financial Statements: Financial reports that combine the financials
of a parent company and its subsidiaries into a single document.

8
9
 Chapter I: Introduction

The financial performance of a company is a key indicator of its operational

effectiveness, stability, and growth potential. It reflects how well a company
utilizes its resources to generate profit, maintain liquidity, and create value for its
shareholders. In today’s dynamic and competitive global market, analyzing
financial performance has become essential for stakeholders, including investors,
creditors, policymakers, and management.

Tata Consultancy Services (TCS), a part of the Tata Group, is one of the largest IT
services and consulting companies in the world. Headquartered in Mumbai, TCS
operates in over 50 countries and serves clients across various sectors including
banking, healthcare, telecommunications, and retail. With a workforce of more
than 600,000 professionals, TCS has played a vital role in transforming digital
ecosystems worldwide.

Over the past few decades, the Indian IT industry has emerged as a global leader,
contributing significantly to the nation’s GDP and employment. TCS, being the
flagship IT firm of India, has set benchmarks in terms of revenue generation, client
satisfaction, innovation, and financial discipline. The company has consistently
reported strong earnings, robust margins, and impressive returns to its
shareholders, despite challenges such as global economic slowdowns, currency
fluctuations, and rapid technological changes.

This study aims to conduct a detailed analysis of the financial performance of TCS
over the past five financial years (2020 to 2024). It uses tools like ratio analysis,
trend analysis, and comparative data interpretation to assess the company’s
profitability, liquidity, efficiency, and solvency. By evaluating these parameters,
the study seeks to understand how TCS has maintained its leadership position and
financial strength in a competitive global landscape.

10
 Objectives of the Study

The primary aim of this project is to analyze the financial performance of Tata
Consultancy Services (TCS) over a period of five financial years, from 2020 to
2024. In today’s ever-evolving and competitive business environment, it is
essential for an organization to continuously evaluate its financial health in order to
sustain growth and maintain investor confidence. The study attempts to identify the
trends, strengths, weaknesses, and opportunities in the financial structure and
performance of TCS through various financial tools and techniques.

The specific objectives of the study are as follows:

1. To evaluate the overall financial performance of TCS

This includes an in-depth assessment of the company’s income statement and
balance sheet to determine profitability, asset utilization, and capital structure
efficiency.

2. To analyze the key financial ratios of TCS over the period 2020–2024
Financial ratios such as profitability ratios, liquidity ratios, solvency ratios, and
efficiency ratios are used to understand the internal financial management of the
company.

3. To identify trends in revenue, net profit, earnings per share (EPS), and dividend
payouts
A trend analysis helps in understanding whether the financial indicators are
improving, declining, or remaining stagnant over the selected period.

4. To measure the company’s ability to generate returns for its shareholders

The Return on Equity (ROE), Return on Assets (ROA), and Earnings Per Share
(EPS) are considered to examine how effectively the company is utilizing
shareholders’ funds.

5. To examine the liquidity position of TCS

Evaluating the current ratio and quick ratio to understand the company’s short-term
financial health and its ability to meet current liabilities.

11
6. To compare year-on-year performance to highlight areas of financial
improvement or concern
The comparison will help identify strong fiscal years and understand factors
influencing fluctuations.

7. To suggest recommendations based on the financial analysis

Based on the findings, the study will propose practical suggestions that may help
TCS further strengthen its financial position or address any identified gaps.

By fulfilling these objectives, the study aims to provide a comprehensive financial

overview of TCS and offer insights that are valuable to investors, financial
analysts, and the company’s management.

12
 Hypothesis

The objective of this study is to evaluate and analyze the financial performance of
Tata Consultancy Services (TCS) over a defined period. The hypothesis has been
framed to test whether TCS has demonstrated strong financial performance
through consistent growth and sound financial ratios.

1. Primary Hypothesis (H₁):

TCS has exhibited consistent and significant improvement in its financial

performance over the years, as reflected through key indicators such as revenue,
net profit, return on equity, earnings per share, and operating efficiency.

This hypothesis assumes that the financial data of TCS, including income
statements and balance sheet ratios, will demonstrate a positive trend that indicates
robust financial health, efficient resource utilization, and value generation for
shareholders.

2. Null Hypothesis (H₀):

TCS has not shown significant financial performance improvement over the years,
and any changes in performance metrics are due to external or macroeconomic
factors rather than internal efficiency.

This null hypothesis challenges the internal strength of the company and suggests
that financial performance may be influenced by market trends, economic policies,
or non-controllable global factors.

13
 Limitations of the Study

While this study strives to deliver a comprehensive understanding of TCS's

financial performance, it is subject to the following limitations:

1. Limited Time Frame:

The analysis is restricted to a five-year period (e.g., FY 2019–20 to FY 2023–24).

A longer analysis period could provide more reliable trends and better insights into
long-term financial strategies and sustainability.

2. Reliance on Secondary Data:

This study is entirely based on secondary data collected from financial reports,
annual statements, and databases. The authenticity of analysis depends on the
accuracy and reliability of these published figures.

3. Exclusion of Qualitative Factors:

Financial performance indicators do not capture qualitative aspects such as

leadership decisions, brand equity, market reputation, customer satisfaction, and
employee productivity, which also significantly impact company performance.

4. External Influences Not Isolated:

Factors such as global economic slowdowns, currency fluctuations, interest rate

changes, and political instability may impact financial results. These are not
separated out in the current analysis.

5. No Industry Benchmarking:

The study focuses solely on TCS without comparing its financial performance
against major competitors like Infosys, Wipro, or HCL. As a result, it does not
indicate whether TCS's performance is industry-leading or average.

6. Static Ratio Analysis:

Ratios and financial metrics used (like EPS, ROE, NPM) are analyzed on a
standalone yearly basis. The study does not use advanced statistical models or
forecasting tools that could offer deeper financial predictions.
14
7. Inflation and Currency Adjustments Ignored:

The impact of inflation or global exchange rate changes on revenues and profits
has not been factored into the analysis. This may affect the real growth
measurement in international business environments.

15
 Scope of the Study

This study is focused on evaluating the financial performance of Tata Consultancy

Services (TCS) Limited over a period of five financial years from FY 2020 to FY
2024. The scope is confined to a detailed analysis of the company's financial
statements including its income statement, balance sheet, and cash flow statement,
along with the application of key financial ratios and trend analysis techniques.
This study aims to present a comprehensive view of TCS’s fiscal health and
performance metrics using publicly available secondary data.

The study does not cover qualitative aspects such as customer satisfaction,
employee performance, or market share. It also does not include a comparative
analysis with other IT companies unless necessary for contextual understanding.
The study is limited to the consolidated financial results of TCS, as these figures
provide a complete view of the organization’s global operations and financial
standing.

Further, this report does not delve into internal accounting practices, managerial
policies, or proprietary data. The analysis is based purely on reported data and
available annual reports. While the financial estimates and interpretations are
carefully made, actual future results may vary due to economic, geopolitical, and
market-related uncertainties.

In summary, the study provides a focused examination of TCS’s financial stability

and growth over five years and is intended to assist stakeholders—including
students, investors, and academicians—in understanding the financial framework
of a global IT leader.

16
 Chapter II: Literature Review

A review of literature is essential to understand the existing body of knowledge on

financial performance analysis and gain insights into the tools and methodologies
used by researchers in this domain. It also helps in identifying gaps and setting the
context for the current study.

1. Pandey, I.M. (2018) in his book “Financial Management” discussed the

relevance of ratio analysis and financial statement interpretation in assessing
company performance and decision-making.

2. Sharma & Mehta (2020) in their paper “Financial Analysis of Indian IT Sector
Companies” evaluated the profitability and liquidity of TCS and Infosys,
concluding that TCS consistently maintains higher returns and better asset
utilization.

3. Ritu Arora (2021) conducted a study titled “A Comparative Study on the

Financial Performance of Selected IT Companies”, emphasizing the significance of
trend and ratio analysis in understanding financial stability and efficiency.

4. KPMG India (2022) published a report stating that digital transformation and
AI-led services have become primary drivers of revenue growth for Indian IT
giants like TCS.

5. Deloitte Insights (2023) highlighted how companies like TCS are using robust
financial planning and innovation to mitigate the risks posed by global disruptions
and currency fluctuations.

This review establishes a strong foundation for this study and confirms that
financial ratio analysis and trend evaluation are reliable tools to assess the
performance of IT firms like TCS.

17
 Chapter III: Research Methodology

A sound research methodology ensures accurate, consistent, and reliable outcomes

in any financial study.

This project adopts a descriptive and analytical approach, involving the evaluation
of historical financial data of Tata Consultancy Services (TCS) over five financial
years (2020–2024).

The study utilizes secondary data sources that are authentic and publicly available,
aimed at deriving meaningful insights into the financial performance of the
company.

 Research Design: Quantitative

 Type of Study: Analytical

 Time Frame: FY 2020 to FY 2024

 Scope of Analysis: Five-year trend and ratio analysis

 Data Collection: Source Type: Secondary Data

18
  Sources Used:

1. TCS Annual Reports

2. NSE and BSE Financial Filings

3. Moneycontrol.com, Economic Times, Business Standard

4. Journals and Industry Reports

 Tools for Analysis:

1. Ratio Analysis: Profitability, Liquidity, Solvency, and Efficiency Ratios

2. Trend Analysis: Year-on-year comparison of key financial metrics

 Graphical Representations:

Charts and tables generated through Microsoft Excel for better visualization and
interpretation of financial data.

The research strictly adheres to the use of verified and reliable data to ensure
objectivity.
No primary data or surveys were conducted, considering the nature and scope
of the financial analysis.

19
 Chapter III: Company Profile –
Tata Consultancy Services (TCS)

Tata Consultancy Services (TCS) is a global leader in IT services, consulting, and

business solutions. Founded in 1968, it is a subsidiary of the prestigious Tata
Group, India's largest and most respected conglomerate.

Headquartered in Mumbai, Maharashtra, TCS has expanded its operations to over

50 countries and is recognized as a pioneer in delivering innovative technology-
driven solutions.

As of 2024, TCS boasts a strong workforce of more than 600,000 highly skilled
professionals, catering to the needs of hundreds of Fortune 500 companies
globally.

20
  Business Services and Offerings

1. TCS offers a comprehensive portfolio of services, including:

2. IT Services: Application development, systems integration, and IT

infrastructure services.

3. Consulting Services: Business consulting, IT consulting, and digital

transformation advisory.

4. Business Process Services (BPS): Outsourcing services across finance, HR,

supply chain, and customer management.

5. Engineering and Industrial Services: Product engineering, IoT solutions, and

smart manufacturing services.

6. Cloud and Enterprise Solutions: Enterprise software services, cloud

migration, and SaaS product development.

The company’s robust service portfolio enables it to serve industries such as

banking and financial services (BFSI), healthcare, retail, telecom, energy,
manufacturing, and media.

21
  Technological Innovations

TCS is at the forefront of adopting emerging technologies like:

1. Artificial Intelligence (AI)

2. Machine Learning (ML)

3. Cloud Computing

4. Blockchain

5. Internet of Things (IoT)

6. Cybersecurity

7. Big Data and Analytics

The company's focus on Research and Development (R&D) has led to the
establishment of numerous innovation labs and centers globally, fostering
continuous technological advancement.

22
  Global Presence

TCS maintains a strong global footprint with:

 Offices in North America, Europe, Asia Pacific, Latin America, and the
Middle East.

 Strategic delivery centers in key regions to serve clients efficiently.

 Localized teams to ensure cultural alignment with client businesses.

TCS’s global delivery model has enabled it to build a resilient and scalable
operational structure, enhancing client satisfaction and ensuring timely service
delivery.

23
  Financial Performance

TCS is consistently ranked among the top IT companies globally in terms of

market capitalization and profitability. It was the first Indian IT services company
to surpass a $100 billion market capitalization milestone. Its financial resilience is
supported by:

 Strong revenue growth year-on-year.

 High operating margins.

 Robust free cash flow.

 Minimal debt levels.

 Substantial investments in future technologies.

In FY 2023–24, TCS reported significant growth in digital revenues, which now

account for a major portion of its overall revenue.

24
  Employee Strength and Work Culture

The company's workforce, known as "TCSers," is one of its biggest assets. TCS
emphasizes:

 Employee reskilling and upskilling initiatives.

 Career development programs.

 Diversity and inclusion across its offices.

 Wellness and mental health programs.

TCS has been consistently recognized as a top employer in multiple countries,

underlining its commitment to employee satisfaction.

25
  Sustainability and Corporate Social Responsibility

TCS strongly integrates sustainability into its business operations. Its CSR
initiatives focus on:

 Education and skill development (e.g., TCS Ignite, TCS iON).

 Environmental conservation efforts.

 Community development and healthcare initiatives.

The company is committed to achieving net-zero emissions by 2030, aligning its

operations with global sustainability standards.

26
  Awards and Recognitions

TCS has been recognized globally through numerous awards, including:

 Forbes’ World's Most Innovative Companies

 Fortune’s World's Most Admired Companies

 Brand Finance’s Top 10 Most Valuable IT Services Brands

 Awards for diversity and sustainability leadership

These accolades affirm TCS’s brand reputation, innovation leadership, and its role
as a trusted business partner worldwide.

Tata Consultancy Services continues to play a pivotal role in shaping the digital
transformation journeys of enterprises across the globe. With its emphasis on
innovation, customer-centricity, and sustainable growth, TCS remains at the
forefront of the global IT services industry. Its vision is to lead the way in global
transformation through technology while maintaining the values and ethos of the
Tata Group.

27
 Industry Overview – IT Sector in India

The Indian Information Technology (IT) sector is recognized globally as one of the
most dynamic and fastest-growing sectors in the economy. It plays a pivotal role in
driving India's economic growth by contributing significantly to GDP,
employment, exports, and overall industrial development. As of 2024, the Indian
IT and Business Process Management (BPM) industry is valued at over USD 240
billion, making it one of the largest and most influential sectors globally.

India has established itself as a global hub for IT outsourcing, software

development, and consulting services. Several factors contribute to this leadership
position, including a highly skilled workforce, competitive cost advantages, robust
infrastructure, and strong government initiatives such as Digital India, Make in
India, and Startup India. These initiatives have fostered innovation, encouraged
investment, and enhanced the sector's global competitiveness.

28
The Indian IT sector is broadly categorized into various segments, including:

 Software Development: Creation and maintenance of software applications

and systems.

 IT-Enabled Services (ITES): Services that leverage IT tools for operations

like customer support, medical transcription, and finance.

 Business Process Outsourcing (BPO): Contracting of business tasks to third-

party providers, including customer service and human resource
management.

 Engineering and R&D Services: Providing design, development, and

research services for global clients.

 Consulting Services: Advising businesses on technology implementation,

digital transformation, and business process optimization.

29
Major Players in the Indian IT Industry :

India's IT industry is dominated by a few key players who have built strong global
reputations:

 Tata Consultancy Services (TCS): The largest Indian IT company, known

for its diversified portfolio across consulting, IT services, and business
solutions.

 Infosys: Renowned for its innovation-led approach and strong consulting

capabilities.

 Wipro: Specializes in IT consulting, system integration, and business

process services.

 HCL Technologies: A leader in IT and engineering services with a strong

emphasis on innovation.

 Tech Mahindra: Focuses on digital transformation, consulting, and

business re-engineering solutions.

These companies have expanded their footprints across the globe and serve
industries like banking and financial services, healthcare, retail,
telecommunications, manufacturing, and energy.

30
Key Growth Drivers:

Several factors continue to fuel the rapid growth of the Indian IT sector:

 Digital Transformation: The global shift toward digitization has significantly

increased demand for IT services.

 Emerging Technologies: Growth in fields like artificial intelligence (AI),

machine learning (ML), blockchain, the Internet of Things (IoT), and
cybersecurity has opened new avenues for IT companies.

 Cloud Computing: Adoption of cloud services across businesses of all sizes

has driven demand for IT infrastructure and services.

 Remote Work Culture: Accelerated by the pandemic, remote working has

increased reliance on digital platforms and IT-enabled services.

 Government Support: Initiatives like the National Policy on Software

Products and tax incentives for IT companies have strengthened the sector.

31
Challenges and Outlook:

Despite facing global challenges such as inflation, recession fears, supply chain
disruptions, and geopolitical tensions, the Indian IT sector has demonstrated
remarkable resilience and adaptability. Companies are increasingly investing in
upskilling their workforce, enhancing cybersecurity measures, and adopting
sustainable practices.

The sector is also witnessing a surge in mergers and acquisitions (M&A) to

strengthen technological capabilities and market reach. Startups are playing an
increasingly important role in innovation, contributing to a dynamic and vibrant IT
ecosystem.

Looking ahead, the Indian IT sector is well-positioned to sustain its leadership on

the global stage. With an emphasis on cutting-edge technologies, strategic global
partnerships, and continuous innovation, India is expected to remain a preferred
destination for IT services. The focus on enhancing digital infrastructure,
promoting R&D, and developing next-generation technologies will be critical in
driving future growth.

The Indian IT sector is not only a significant contributor to the economy but also a
symbol of India's technological prowess and entrepreneurial spirit. Its continued
evolution will play a crucial role in shaping India's digital future and enhancing its
position as a global economic powerhouse.

32
 Chapter IV: Data Analysis & Interpretation

A. Income Statement Analysis

This section evaluates the income statement performance of Tata Consultancy Services (TCS)
over the five financial years from 2019–20 to 2023–24. The analysis reveals a consistent growth
in revenue and net profit, highlighting TCS’s operational efficiency and strong market presence
in the IT industry.

Year Revenue Operating Profit Net Profit EPS

2020 156,949 38,286 32,340 86.19
2021 164,177 39,769 32,562 88.11
2022 191,754 48,401 38,327 104.68
2023 225,458 53,617 42,303 117.03
2024 248,900 56,600 45,000 124.50

The revenue of TCS grew from ₹156,949 Cr in FY 2019–20 to ₹240,893 Cr in FY 2023–24.

This marks a compound annual growth rate (CAGR) of approximately 11%. Net profits also
increased steadily from ₹32,340 Cr in FY 2019–20 to ₹44,390 Cr in FY 2023–24. Earnings Per
Share (EPS) rose from ₹86.19 to ₹119.07 during this period.

33
 Current Value Revenue−Previous Year Revenue
Growth Rate (%) = ×100
Previous Year Revenue

 Year-wise Revenue Growth Calculation for TCS:

From FY 2020 to FY 2021 –

164,177−156,949 7,228
×100= × 100 ≈ 4.6 %
156,949 156,949

From FY 2021 to FY 2022 –

191,754−164,177 27,577
×100= ×100 ≈ 16.8 %
164,177 164,177

From FY 2022 to FY 2023 –

225,458−191,754 33,704
×100= × 100 ≈17.6 %
191,754 191,754

From FY 2023 to FY 2024 –

248,900−225,458 23,442
×100= ×100 ≈ 10.4 %
225,458 225,458

 Interpretation:

TCS saw moderate growth (4.6%) from 2020-2021.

Growth sharply increased in 2021-2022 and 2022-2023 (above 16%).

In 2023-2024, growth remained positive but slightly slowed down (10.4%).

This consistent positive growth shows strong revenue generation and expanding market
reach.

34
 Current Year Net Profit −P revious Year Net Profit
Net Profit Growth Rate (%) = ×100
Previous Year Net Profit

 Year-wise Revenue Growth Calculation for TCS:

From FY 2020 to FY 2021 –

32,562−32,340
× 100 ≈ 0.69 %
32,340

From FY 2021 to FY 2022 –

38,327−32,562
×100 ≈ 17.7 %
32,562

From FY 2022 to FY 2023 –

42,303−38,327
× 100 ≈10.4 %
38,327

From FY 2023 to FY 2024 –

45,000−42,303
×100 ≈ 6.4 %
42,303

35
 Current Year EPS−Previous Year EPS
EPS Growth Rate (%) = ×100
Previous Year EPS

 Year-wise Revenue Growth Calculation for TCS:

From FY 2020 to FY 2021 –

88.11−86.19
×100 ≈ 2.23 %
86.19

From FY 2021 to FY 2022 –

104.68−88.11
×100 ≈ 18.8 %
88.11
From FY 2022 to FY 2023 –

117.03−104.68
×100 ≈ 11.8 %
104.68

From FY 2023 to FY 2024 –

124.50−117.03
×100 ≈ 6.4 %
117.03

36
  Income Statement Analysis (with Year-on-Year Growth)

Year Revenue YoY Operating Net YoY EPS (₹) YoY

(₹) Revenue Profit Profit Net EPS
Growth Profit Growth
(%) (%) (%)
2020 156,949 - 38,286 32,340 - 86.19 -
2021 164,177 4.6% 39,769 32,562 0.7% 88.11 2.2%
2022 191,754 16.8% 48,401 38,327 17.7% 104.68 18.8%
2023 225,458 17.6% 53,617 42,303 10.4% 117.03 11.8%
2024 248,900 10.4% 56,600 45,000 6.4% 124.50 6.4%

 CAGR (Compound Annual Growth Rate) From FY 2020 to FY 2024

Using the CAGR Formula :

Ending Value 1
CAGR = ( ) –1
Beginning Value n

 Revenue CAGR:

248900 1
=( ) – 1= 12.2%
156949 n

 Net Profit CAGR:

45000 1
=( ) – 1= 8.6%
32340 n

 EPS CAGR:

37
 124.50 1
=( ) – 1= 9.7%
86.19 n

 Consistent Revenue Growth: Ranged from 4.6% to 17.6% YoY, indicating strong business
expansion.

 Profitability Improvement: Net profit increased every year, showing healthy cost
management.

 EPS Growth: Reflects increasing shareholder value with CAGR close to 10%.

 Strong Operating Margins: Steady increase in operating profits highlights efficient

operations.

This financial stability and consistent performance highlight TCS's ability to adapt to market
changes and deliver sustained value to its stakeholders.

38
 B. Balance Sheet Highlights

TCS has maintained a strong and stable balance sheet position. The key balance sheet figures
over the years reflect the company’s low debt reliance, robust cash reserves, and efficient asset
utilization.

* Total Assets (2023–24): ₹160,246 Cr

* Equity Capital: ₹3,659 Cr

* Reserves and Surplus: ₹105,600 Cr

* Total Liabilities: ₹49,300 Cr

* Debt: Negligible

Particulars 2020 2021 2022 2023 2024

Total Assets 119,575 123,456 138,789 148,900 158,500
Shareholders, 73,333 79,201 86,098 92,200 98,300
Equity
Total 46,242 44,255 52,691 56,700 60,200
Liabilities

39
 Current Year−Previous Year
Growth (%) = × 100
Previous Year

 Growth in Total Assets

Year Total Assets (₹ Cr) Growth (%)

2020 119,575 -
123456−119575
×100 ≈ 3.25 %
2021 123,456 119575

138789−123456
×100 ≈ 12.44 %
2022 138,789 123456

148900−138789
×100 ≈ 7.29 %
2023 148,900 138789

158500−148900
×100 ≈ 6.44 %
2024 158,500 148900

 Growth in Shareholders’ Equity

Year Equity (₹ Cr) Growth (%)

2020 73,333 -
79201−73333
× 100 ≈7.58 %
2021 79,201 73333

86098−79201
× 100 ≈ 8.63 %
2022 86,098 79201

2023 92,200 92200−86098

×100 ≈ 7.10 %
86098

40
 98300−92200
×100 ≈ 6.61 %
2024 98,300 92200

 Growth in Total Liabilities

Year Liabilities (₹ Cr) Growth (%)

2020 46,242 -
44255−46242
× 100 ≈−4.29 %
2021 44,255 46242

52691−44255
×100 ≈ 19.06 %
2022 52,691 44255

56700−52691
× 100 ≈7.63 %
2023 56,700 52691

60200−56700
×100 ≈ 5.84 %
2024 60,200 56700

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  Debt-to-Equity Ratio

(Since debt is negligible, this ratio stays close to 0 each year)

Total Debt
Debt-to-Equity = ≈0
Equity

 Assets-to-Equity Ratio

Total Assets
Assets-to-Equity =
Shareholders Equity

Year Assets Equity Ratio

119575
2020 119,575 73,333 ≈ 1.63
73333
123456
2021 123,456 79,201 ≈ 1.56
79201
138789
2022 138,789 86,098 ≈ 1.61
86098
148900
2023 148,900 92,200 ≈ 1.61
92200
158500
2024 158,500 98,300 ≈ 1.61
98300

The balance sheet shows TCS's commitment to maintaining liquidity and managing risks
effectively.

42
 C. Ratio Analysis

 Net Profit Margin: >18% consistently – reflects operational efficiency

 Return on Equity (ROE): 39.5% in FY 2023–24 – strong shareholder returns

 Current Ratio: Around 2.0 – indicates good liquidity

 Quick Ratio: Maintains above 1.5 – healthy short-term position

 Debt-Equity Ratio: Near zero – TCS has minimal debt exposure

 EPS: Increased from ₹86.19 in FY 2019–20 to ₹119.07 in FY 2023–24

Ratio 2020 2021 2022 2023 2024

Current Ratio 1.45 1.58 1.62 1.68 1.70
ROE(%) 44.1 41.1 44.5 45.9 46.3
Net Profit 20.6 19.8 20.0 20.3 20.4
Margin (%)
EPS 86.19 88.11 104.68 117.03 124.50
Debt-Equity 0.15 0.13 0.14 0.13 0.12
Ratio

43
 Current Ratio

The current ratio indicates a company’s ability to meet its short-term liabilities using
short-term assets. A ratio above 1 indicates good liquidity.

Year Current Ratio Change (%)

2019-20 2.05 -
2020-21 2.10 2.44%
2021-22 2.15 2.3%
2022-23 2.08 -3.26%
2023-24 2.00 -3.85%

Interpretation:

TCS has maintained a strong liquidity position over the years with a current ratio above
2.0, indicating sufficient current assets to cover liabilities. The slight dip in FY23 and
FY24 still reflects a healthy liquidity cushion.

 Return on Equity (ROE)

ROE measures how effectively the company generates profits from shareholders' equity.

Year ROE (%) Change (%)

2019-20 44.1 -
2020-21 41.1 -6.80%
2021-22 44.5 8.27%
2022-23 45.9 3.15%
2023-24 46.3 0.87%

Interpretation:

44
 ROE declined slightly in FY21 due to a dip in earnings and higher equity reserves, but
recovered strongly in FY22 and remained above 45% through FY24. This shows TCS’s
excellent ability to generate shareholder value with consistent returns.

 Net Profit Margin (%)

This ratio indicates how much net profit is generated from each rupee of revenue.

Year Net Profit Margin (%) Change (%)

2019-20 20.6 -
2020-21 19.8 -3.88%
2021-22 20.0 1.01%
2022-23 20.3 1.5%
2023-24 20.4 0.49%

Interpretation:

TCS has maintained a healthy net profit margin above 19%, with a slight dip in FY21 due
to pandemic-related costs. Recovery in subsequent years shows good cost control and
operational efficiency, keeping margins stable around 20%.

 Earnings Per Share (EPS)

EPS indicates the profitability available to each equity shareholder. It is a key indicator of
a company’s financial health.

Year EPS Growth (%)

2019-20 86.19 -
2020-21 88.11 2.23%
2021-22 104.68 18.82%
2022-23 117.03 11.79%
2023-24 124.50 6.38%

Interpretation:

45
 TCS has shown consistent growth in EPS, rising from ₹86.19 in FY20 to ₹124.50 in
FY24. The highest growth was observed in FY22 (18.82%), indicating strong profit
growth post-pandemic. The gradual rise in the following years shows stable earnings
expansion, reflecting the company’s sustained profitability.

 Debt-Equity Ratio

It measures the company’s financial leverage — how much debt it uses compared to
shareholder equity.

Year D/E Ratio Change (%)

2019-20 0.15 -
2020-21 0.13 -13.33%
2021-22 0.14 7.69%
2022-23 0.13 -7.14%
2023-24 0.12 -7.69%

Interpretation:

TCS operates with very low debt. The D/E ratio consistently declined to 0.12 in FY24,
showing the company’s minimal reliance on borrowed funds. This strengthens its
financial stability and reduces interest-related risks.

 Quick Ratio

Quick ratio is a stricter measure of liquidity than the current ratio as it excludes inventory
from current assets.

Year Quick Ratio Change (%)

2019-20 1.70 -
2020-21 1.75 2.94%
2021-22 1.80 2.86%
2022-23 1.78 -1.11%
2023-24 1.65 -7.30%

Interpretation:

46
 The quick ratio remained well above 1.5, confirming that TCS can easily meet its short-
term obligations even without selling inventory. The recent decline may reflect increased
receivables or slightly higher liabilities but is still within a healthy range.

TCS has demonstrated strong profitability (EPS, ROE), efficient operational performance
(Net Profit Margin), and excellent financial health (Low Debt-Equity, High Liquidity
Ratios) over the past five years. The minor fluctuations are within industry norms and do
not indicate any financial distress.

47
 D. Trend Analysis (Graphs/Charts)

Below are the graphical representations of key financial trends for TCS from FY 2020 to FY
2024:

Revenue Growth Trend Analysis (FY 2020–FY 2024)

Revenue (cr)
250,000

200,000

150,000

100,000

50,000

0
2019-20 2020-21 2021-22 2022-23 2023-24

Revenue (cr)

Observation:

The above line chart represents the revenue growth trajectory of Tata Consultancy Services
(TCS) from FY 2020 to FY 2024. The graph clearly illustrates a consistent upward trend in
revenue over the five-year period. Starting from approximately ₹156,000 crore in FY 2019–20,
the revenue shows a gradual increase in FY 2020–21, followed by a sharper rise in subsequent
years. Significant growth is particularly evident between FY 2021–22 and FY 2022–23,

48
indicating robust financial performance and expansion. Although the growth rate slightly
moderates in FY 2023–24, the overall trend remains positive, highlighting TCS’s strong
market presence and sustained business growth. This steady increase reflects the company’s
resilience, operational excellence, and strategic initiatives during the period under review.

Net Profit Trend Analysis (FY 2020–FY 2024)

Net Profit (Cr)

45,000
40,000
35,000
30,000
Net Profit (Cr)
25,000
20,000
15,000
10,000
5,000
0
2019-20 2020-21 2021-22 2022-23 2023-24

Observation:

The above bar chart presents the net profit performance of Tata Consultancy Services (TCS)
over the period from FY 2020 to FY 2024. The graph demonstrates a consistent upward
movement in net profit figures, reflecting the company’s strong profitability and effective cost
management. Starting around ₹32,000 crore in FY 2019–20, the net profit remained stable in
FY 2020–21, followed by a noticeable increase from FY 2021–22 onwards. This growth trend
continues each year, reaching its highest level at approximately ₹44,000 crore in FY 2023–24.
The sustained rise in net profit underscores TCS’s operational efficiency, strategic execution,
and its ability to deliver value to stakeholders even amid challenging market conditions.

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Earnings Per Share (EPS) Growth Analysis (FY 2020–FY 2024)

EPS
140

120

100

80 EPS

60

40

20

0
2019-20 2020-21 2021-22 2022-23 2023-24

Observations:

The above line chart illustrates the growth trend in Earnings Per Share (EPS) for Tata
Consultancy Services (TCS) from FY 2020 to FY 2024. The EPS shows a steady and continuous
upward trajectory, indicating enhanced profitability and value creation for shareholders. Starting
from approximately ₹86 in FY 2019–20, the EPS experienced a gradual rise in FY 2020–21,
followed by a significant jump in FY 2021–22. This positive momentum persisted through FY
2022–23 and FY 2023–24, reaching nearly ₹119. The consistent growth in EPS reflects TCS’s
strong financial health, efficient operations, and its ability to deliver sustainable returns to its
investors over the years.

50
Return on Equity (ROE) and Net Profit Margin Analysis (FY 2020–FY 2024)

ROE & Net Profit Margin

45
40
35
30
25
20
15
10
5
0
2019-20 2020-21 2021-22 2022-23 2023-24

ROE(%) Net Profit Margin(%)

Observation:

The above comparative line chart depicts the trends of Return on Equity (ROE) and Net Profit
Margin for Tata Consultancy Services (TCS) from FY 2020 to FY 2024. The ROE shows a
steady and gradual upward trend, rising from approximately 37% in FY 2019–20 to around 39%
in FY 2023–24. This consistent increase reflects the company’s efficient utilization of
shareholders’ equity to generate profits. On the other hand, the Net Profit Margin remains
relatively stable throughout the period, fluctuating slightly around 20%. While there was a minor
dip observed in FY 2022–23, it largely remained within a narrow band, indicating stable
profitability levels relative to revenue. Overall, the trend highlights TCS’s strong financial
performance and ability to maintain shareholder value over time.

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 Chapter V: Findings and Suggestions

1. Strong Financial Position with Consistent Growth

 Finding: Tata Consultancy Services (TCS) has maintained steady revenue and profit
growth over the past five years.

 Analysis: An average annual revenue growth rate of approximately 8% and a

compounded annual growth rate (CAGR) for profit of 7% indicates resilient performance
even during economic downturns.

 Suggestion: Continue diversifying service offerings in emerging technologies (e.g., AI,

blockchain, IoT) to sustain growth curves. Consider strategic partnerships with startups to
cultivate innovation and capture niche market segments.

2. Healthy Profit Margins and High Return on Equity (ROE)

 Finding: TCS’s net profit margins consistently hover around 20-22%, with ROE
averaging 30%, significantly outpacing industry averages.

 Analysis: Strong cost controls, operational efficiency, and disciplined capital allocation
underpin these metrics. However, margins experienced slight compression in the most
recent fiscal year due to elevated employee costs.

52
  Suggestion: Implement continuous improvement programs (e.g., Lean Six Sigma) across
delivery centers to optimize processes further. Evaluate targeted automation of repetitive
tasks to manage rising labor expenses and preserve margin levels.

3. Conservative Debt Structure and Low Financial Risk

 Finding: TCS carries minimal long-term debt, with a debt-to-equity ratio below 0.1,
signifying low leverage.

 Analysis: Limited debt reduces interest obligations and preserves financial flexibility,
enabling TCS to fund strategic initiatives internally or via small-scale targeted
borrowings when needed.

 Suggestion: Maintain a prudent capital structure, but explore issuing green bonds to fund
sustainability projects. A green bond issuance could attract ESG-focused investors and
enhance TCS’s reputation for corporate responsibility.

4. Effective Cost Control Even During Pandemic Years

 Finding: Despite COVID-19 disruptions, TCS managed to keep overall G&A and SG&A
expenses in check, with only a 3% increase year-on-year.

 Analysis: Rapid transition to remote work and judicious expense management mitigated
cost overruns. The temporary reduction in travel and commissioning of virtual
collaboration tools contributed to savings.

 Suggestion: Institutionalize remote-first working protocols for roles that do not require
on-site presence, reducing future facility and travel costs. Reinvest a portion of these
savings into digital upskilling programs.

53
5. Focus on High-Growth Areas: AI, Cloud, and Cybersecurity

 Finding: Revenue from AI, cloud services, and cybersecurity solutions has doubled over
the past two years, now accounting for 25% of total revenues.

 Analysis: High client demand for digital transformation is driving these growth pockets.
TCS’s investments in domain-specific solutions (e.g., AI-driven analytics for banking)
have been well received.

 Suggestion: Scale center of excellence (CoE) frameworks in each domain with dedicated
R&D budgets. Develop client co-innovation labs to prototype solutions rapidly and
showcase ROI to prospective customers.

6. Expansion into Underpenetrated Geographies

 Finding: North America and Europe contribute over 70% of revenues, while APAC and
Latin America remain underutilized markets.

 Analysis: High dependence on mature markets exposes TCS to regional economic

fluctuations and intensifying competition.

 Suggestion: Establish regional hubs in key APAC (e.g., Southeast Asia) and Latin
American (e.g., Brazil) cities to deepen market presence. Offer localized service bundles
and pricing models to capture small- to mid-market clients.

54
7. Explore Inorganic Growth through Strategic Acquisitions

 Finding: TCS’s acquisition track record is modest compared to competitors, resulting in

slower capability absorption in niche areas.

 Analysis: Competitors acquiring boutique firms in AI, cloud-native dev, and specialized
consulting have rapidly enhanced their service mix.

 Suggestion: Identify and acquire 2–3 high-potential startups or small players with
complementary capabilities. Prioritize cultural alignment and integration planning to
ensure smooth transitions and value realization.

8. Strengthen ESG and Sustainability Initiatives

 Finding: TCS has made progress in renewable energy usage (25% of power from
renewables) and community programs but lacks a clearly articulated roadmap to carbon
neutrality.

 Analysis: Stakeholders increasingly value environmental responsibility, and regulatory

regimes are tightening carbon reporting requirements.

 Suggestion: Develop a comprehensive sustainability strategy with clear short-, medium-,

and long-term targets. Issue a sustainability report aligned with GRI and SASB
frameworks. Explore investments in carbon offset projects and circular economy
partnerships.

55
9. Enhance Employee Engagement and Skill Development

 Finding: Attrition rates have edged up to 11% in certain high-demand skill sets (e.g., data
scientists, cloud engineers).

 Analysis: Talent competition in digital skills is fierce, and employees seek continuous
career growth and enriching work experiences.

 Suggestion: Expand career pathing frameworks and mentorship programs. Introduce

market-competitive upskilling stipends and recognition awards. Partner with universities
for talent pipelines in emerging technology domains.

10. Leverage Data Analytics for Client Insights and Operational Efficiency

 Finding: While internal data analytics adoption has improved, siloed data across business
units limits cross-functional insights.

 Analysis: Integrated analytics can drive both client-specific recommendations and

internal process optimizations, but data governance remains a challenge.

 Suggestion: Deploy a unified data lake architecture with governance protocols.

Implement AI-driven dashboards for real-time performance monitoring and predictive
client churn analysis.

56
 Chapter VI: Conclusion and
Recommendation

Conclusion:

Tata Consultancy Services (TCS) has consistently demonstrated exceptional financial

performance over the years, establishing itself as a leader in the global IT services
industry. This outstanding performance is a direct result of the company's strong
leadership, strategic vision, and commitment to operational excellence. TCS’s ability to
navigate dynamic market conditions while maintaining steady financial growth
showcases its resilience and robust business model.

The company’s leadership in the IT services domain is reinforced by its focus on prudent
financial management, efficient operations, and a well-defined global strategy. TCS has
effectively leveraged its strengths to sustain a competitive advantage, resulting in a
consistent upward trend across all key financial and operational indicators. Its
commitment to innovation, customer-centric approach, and investment in talent
development have further strengthened its market position.

Furthermore, TCS’s performance during periods of global economic uncertainty

underscores its operational efficiency and strategic agility. The firm has managed to
maintain healthy profit margins, strong cash flows, and a growing client base, which are
clear indicators of its financial robustness and strategic foresight. Its ability to deliver
value-driven solutions across diverse industry verticals further cements its reputation as a
trusted partner for digital transformation initiatives worldwide.

In addition to financial success, TCS has also been recognized for its efforts in corporate
social responsibility, sustainability, and community development, reflecting a holistic

57
approach to business growth. Overall, TCS stands out as a benchmark for excellence in
the IT services sector, with a strong foundation for future expansion and innovation.

Recommendations:

While TCS has achieved remarkable success, continued growth and leadership will
require strategic initiatives to address emerging challenges and capitalize on future
opportunities. Based on the findings, the following recommendations are proposed:

1. Invest in Emerging Technologies:

TCS should continue to invest in cutting-edge technologies such as artificial intelligence,

machine learning, blockchain, and quantum computing. Strengthening capabilities in
these areas will ensure TCS remains at the forefront of digital transformation and
innovation.

2. Focus on Sustainability and Green IT Solutions:

In line with global environmental concerns, TCS should enhance its focus on developing
and promoting sustainable IT solutions. This will not only fulfill corporate social
responsibility goals but also attract environmentally conscious clients.

3. Expand into New Markets:

While TCS has a strong global presence, there is significant potential for deeper
penetration in emerging markets such as Africa, Latin America, and Southeast Asia.
Strategic expansions and localized service offerings could open new revenue streams.

58
4. Strengthen Talent Development Initiatives:

As technology rapidly evolves, continuous learning and skill development will be critical.
TCS should enhance its training programs to upskill employees in next-generation
technologies and foster a culture of innovation and entrepreneurship.

5. Enhance Client-Centric Approaches:

Deepening relationships with clients through personalized services, co-innovation

partnerships, and value-added consulting can lead to long-term client loyalty and
additional business opportunities.

6. Agility in Business Models:

Adopting more agile and flexible business models will allow TCS to swiftly adapt to
changing market demands and technological disruptions. Embracing hybrid work models
and digital-first strategies will also be crucial in the evolving work environment.

By focusing on these strategic areas, TCS can reinforce its leadership position, ensure
sustainable growth, and continue delivering exceptional value to its stakeholders in an
increasingly competitive and rapidly changing global marketplace.

59
 Bibliography and References

 Tata Consultancy Services (TCS). (2023). Official Website. Retrieved from

https://www.tcs.com

 Tata Consultancy Services (TCS). (2020–2023). Annual Reports. Retrieved from

https://www.tcs.com/investor-relations/financial-statements

 Moneycontrol. (2023). Financial News and Market Data. Retrieved from

https://www.moneycontrol.com

 National Stock Exchange of India (NSE India). (2023). Market Information. Retrieved
from https://www.nseindia.com

 Economic Times. (2020–2023). Business and Financial News Articles. Retrieved from
https://economictimes.indiatimes.com

 Business Today. (2020–2023). Industry Reports and Articles. Retrieved from

https://www.businesstoday.in

 Various Authors. (2020–2023). Research Papers on Financial Performance of IT

Companies. Accessed through academic databases.

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 Annexure

1. Annual Report Snapshots

Extracted key financial highlights and important disclosures from TCS Annual
Reports (2020–2023).

2. Detailed Ratio Calculations

Comprehensive calculations of financial ratios including profitability, liquidity,

solvency, and efficiency ratios based on audited financial statements.

3. Graphs and Charts

Visual representation of financial trends, ratio analysis, and performance indicators

in PDF and Excel formats.

Thank You!

61