Every investor knows about TCS (Tata Consultancy Services), the giant in the IT industry. If you’re curious about the target price of TCS shares, stay on this page till the end. You’ll find all the relevant information, including the target price for the upcoming years, stock analysis, growth drivers, and more.
Determining the target price involves a thorough process. We analyze the company’s performance, predict its future growth, understand its business model, conduct industry analysis, and more. After considering all these factors, we provide a share price prediction.
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TCS Share Price Target 2023 to 2050
Tata Consultancy Services (TCS) is a leading company in the information technology industry. Its market capitalization exceeds the combined GDP of numerous countries, illustrating its significant impact. Additionally, being part of the Tata Group further adds to its prestige.
Typically, TCS is considered an obvious choice for long-term investment. However, it is crucial to conduct thorough analysis before investing in the stock market. This is because investing in stocks is a dynamic activity influenced by various factors.
After conducting a comprehensive analysis of TCS stock, we have estimated the following prices for the upcoming years. Please note that these estimates do not guarantee future outcomes and do not account for any potential adjustments in the share price, such as stock splits or bonuses.
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TCS, short for Tata Consultancy Services, is an Indian IT company primarily engaged in services and consulting. As a multinational corporation, it operates in 46 countries. With a large market capitalization, it ranks as the second largest company in India and is recognized as one of the most valuable IT service brands worldwide. Additionally, it holds the position of being the leading Big Tech company in India.
Founded in 1968 by JRD Tata, TCS is currently led by Natarajan Chandrasekaran as the chairman and K Krithivasan as the MD and CEO. Over the years, TCS has made several acquisitions, including CMC Ltd., Airline Financial Support Services India (AFSI), Aviation Software Development Consultancy India (ASDC), Phoenix Global Solutions, Tata Infotech, Pramerica Systems Ireland, and more. As of March 2021, TCS operated through 50 subsidiary companies across its presence in 46 countries.
TCS Business Model
TCS is a company that provides IT services. Its main services include cloud computing, cybersecurity, IoT and digital engineering, cognitive business operations, data analytics, IT consulting, enterprise solutions, and more.
TCS offers its services to a wide range of industries such as banking, education, life sciences, capital markets, energy, manufacturing, consumer goods, healthcare, public services, communications, media, high tech, insurance, retail, travel, and logistics, among others.
As countries like India are only beginning to embrace digitization, the IT industry is expected to experience significant growth in the near future. This growth will greatly benefit IT companies like TCS.
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TCS Stock Fundamental Analysis
Data As of 10th July 2023
TCS has borrowings amounting to Rs. 7,688 Crores, but it also holds reserves of Rs. 90,058 Crores. Consequently, it can be considered a virtually debt-free company. In the financial year ending March 2023, TCS achieved an operating profit margin (OMP) of 26%.
Over the past ten years, Tata Consultancy Services has maintained a compounded sales growth rate of 14%. For both the five-year and three-year periods, the growth rate stood at 13%. On a trailing twelve-month (TTM) basis, the compounded sales growth rate was 18%. Similarly, the compounded profit growth rate was 12% for ten years, 10% for five years, 9% for three years, and 10% on a TTM basis.
Regarding return on equity (ROE), TCS has achieved 39% over ten years, 41% over five years, 43% over three years, and 47% in the most recent year. These figures indicate consistent and impressive performance.
Considering these numbers and the company’s overall performance, the share price has experienced a Compound Annual Growth Rate (CAGR) of 15% over ten years, 11% over five years, and 14% over three years. However, in the past year, the IT stock correction resulted in no returns. Nevertheless, TCS boasts a strong management team, and its future appears secure due to its robust pedigree.
Key Factors Shaping TCS Share Price
The share price of TCS can be influenced by various factors, including:
- TCS’s revenue growth, profitability, and ability to consistently deliver financial results are crucial in determining its share price.
- The performance of the IT industry as a whole, technological advancements, and market trends can impact TCS’s share price. Currently, the IT industry is experiencing a slowdown, which could temporarily hinder the growth of TCS stock. If a global recession occurs, the situation could worsen.
- Economic conditions, both in India and worldwide, can influence how investors perceive TCS and its share price.
- Changes in regulations concerning the IT industry, taxation, or government policies can affect TCS’s business and share price. However, no government regulations are expected in the IT industry at the moment.
- Since TCS derives a significant portion of its revenue from exporting IT services, the value of the dollar also plays a crucial role in its financial performance. The financials directly impact the share price.
- Like any other business, competition is an important factor to consider. TCS faces tough competition from major companies like Accenture, Wipro, Infosys, and HCL Tech. These competitors significantly affect TCS’s growth, leading to fluctuations in its share price.
FAQs Related to TCS Stock Price Prediction
Is TCS stock a good buy?
TCS is considered a fundamentally strong stock, but due to concerns about a recession, the IT stocks are currently facing pressure. Therefore, it is not recommended to make a large investment in such stocks at once. However, employing a “buy on dip” strategy might be beneficial in this situation. It is important to conduct your own analysis instead of relying on someone else’s advice.
Does TCS give dividend?
Indeed, TCS is a company that consistently provides dividends to its shareholders. In June 2023, it announced a dividend of Rs. 24 per share. Additionally, TCS frequently initiates share buybacks.
Based on this analysis, it is evident that TCS is a company that prioritizes the interests of investors. It possesses robust fundamentals, and the IT industry is projected to grow in the future, further supporting its potential. Additionally, TCS benefits from a strong promoter group. Currently, there are no concerning indicators that would hinder investment objectives in this company.
Investment Disclaimer: We do not provide investment advice or tips. The information provided on this website is solely for educational purposes.