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TCS: 3246: Sales Growth Long Term: 19% | fy25Sales: 6%

Lesson 45/224 | Study Time: 5 Min

Course: Top Quality Companies

📊 TCS: TCS: 3246: Sales Growth Long Term: 19% | fy25 Sales: 6%

Tata Consultancy Services (TCS), a crown jewel in the Tata Group portfolio, is not just one of India’s largest IT firms but also a global powerhouse. With operations in over 45 countries, a consistent track record of growth, strong financial metrics, and robust investor returns, TCS has cemented its position as a blue-chip favorite.

Let’s explore TCS from multiple lenses — its industry relevance, financial strength, historical and regional growth, valuation, and future outlook.

🏢 TCS: A Quick Introduction

Founded in 1968, TCS is India's largest IT services and consulting company. As of FY25, TCS generates over ₹2.55 lakh crore in revenue and serves Fortune 500 clients across sectors such as BFSI, retail, manufacturing, and healthcare.

Industry Standing: Among the top 3 global IT services firms by market capitalization

Employees: Over 600,000

Parent Company: Tata Group, one of India's oldest and most respected conglomerates

📈 20-Year Sales and Profit Growth

TCS has demonstrated an exceptional record of sustained growth:

🚀 Total Income Growth (₹ Cr)

From ₹8,103 Cr in FY2005 to ₹2,55,324 Cr in FY2025, reflecting a CAGR of ~20% over two decades.

💰 Net Profit Growth (₹ Cr)

Profits surged from ₹1,832 Cr in FY2005 to ₹48,797 Cr in FY2025, achieving a CAGR of ~21%.

📊 Historical Growth Snapshot

FY	Total Income (Cr)	Net Profit (Cr)	Sales Growth (%)	Profit Growth (%)
2005	8,103	1,832	-	-
2010	30,029	7,000	23.8%	32.6%
2015	94,648	19,257	23.3%	23.3%
2020	156,949	32,447	10.7%	9.2%
2025	2,55,324	48,797	10.1%	8.5%

📊 Financial Ratios Snapshot

💵 Profitability Ratios

Net Profit Margin: Steady at ~19%–20% over the past 5 years

Return on Equity (ROE): ~35%

Return on Capital Employed (ROCE): 40%+

🛡️ Solvency Ratios

Debt-to-Equity: Virtually zero – debt-free

Interest Coverage: Extremely high, indicating strong earnings relative to interest obligations

🔁 Consistency

20 years of uninterrupted profits

90%+ payout ratio and strong dividend history

One of the most reliable large-cap stocks in India

📉 Near-Term Performance Snapshot (FY25-FY26)

Metric	Q1 FY25	H1 FY24	9M FY24	FY25 (Est.)	FY26 (Est.)
Sales	5.4%	6.5%	6.2%	6.0%	5.0%
Profit	10.0%	6.9%	8.7%	5.9%	8.0%
Margin	19.3%	19.0%	19.1%	19.1%	19.1%

🧭 Chart Analysis: Near-Term Strategy

TCS 20-Year Chart & Strategy

TCS has appreciated 33x over 20 years with consistent dividend payouts (~90% payout ratio).

Technically, the stock is approaching a key support near ₹2854, which coincides with the 100-month EMA — a historically strong accumulation zone.

Suggested Strategy:
- 📥 Buy near: ₹2854 (100 MEMA)
- 💰 Profit Booking Zone: ₹4322 (~5% short-term profit window)

This technical support aligns with fundamentals, making it a solid zone for long-term investors to consider accumulating.

🌍 Regional & Segmental Trends (FY25)

📌 Regional Growth (Constant Currency)

Region	Share	Growth
North America	47.6%	-1.8%
India	8.9%	62.6%
UK	17.0%	4.0%
Latin America	1.8%	6.8%
Asia Pacific	8.0%	6.8%

📈 India leads regional growth, driven by public sector tech spend and digital transformation.

🔍 Segment-wise Growth

Segment	Revenue (Cr)	Share	Growth	CC Growth
BFSI	94,597	37%	4%	0.7%
Communications	45,893	18%	17%	-9.5%
Consumer	40,197	16%	2%	0.3%
Manufacturing	25,170	10%	7%	2.9%
Life Sciences/HC	26,456	10%	-1%	-1.6%
Other	23,011	9%	10%	5.1%

💸 Valuation & Long-Term Investor Perspective

Metric	FY24	FY25E
EPS (₹)	126	141
PE Ratio	31x	23x

📈 Forward Projections

Year	Revenue (Cr)	Profit (Cr)	EPS (₹)	Fair Value	Dividend (₹)
FY2026	2,68,090	51,205	141	₹3,774	₹127
FY2030E	4,21,845	84,888	234	₹6,257	₹210
FY2035E	7,43,435	1,49,602	412	₹11,028	₹370

At current levels, TCS offers a compelling risk-reward for long-term wealth compounding through both price appreciation and dividends.

Fair Value TCS:

https://docs.google.com/spreadsheets/d/e/2PACX-1vRSzhfaAjiF1k83LOEAtU_n9uY8EWbuQMNw2tOH_AjV6bK_bJkdAYpQIcFtupm0Yw/pubhtml?gid=352024333&single=true

🚀 Outlook Summary

🩵 Near-Term (FY25–26)

Stable margins (~19%), supported by cost optimization

Growth in India and manufacturing segments offsets BFSI softness

Consolidation phase offering buy-on-dips opportunities

🔮 Long-Term (2030 and Beyond)

Cloud, AI, cybersecurity, digital core modernization will remain growth drivers

Dividend yield and reinvestment support a steady compounding strategy

Valuation remains fair given the quality, making it a core portfolio candidate

📢 Disclosure

This article is intended for informational and educational purposes only. It is not investment advice. Readers are advised to do their own research before making any investment decisions.

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Piyush Patel

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