Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
TCS' prospectus: Excerpts - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jun 14, 2004

    TCS' prospectus: Excerpts

    Tata Consultancy Services (TCS), Asia's largest software services company, filed its red herring prospectus with the SEBI late last week. Through this public issue, the company has put on offer 55.4 m equity shares of the face value of Re. 1 each. The offer is being made through the 100% book-building process and retail investors will been allocated 25% of the shares on offer, on a proportionate basis.

    Financial snapshot...
    (Rs m) FY01 FY02 FY03 9mFY04
    Sales 30,567 43,706 55,179 50,852
    Other income 727 959 780 649
    Total income 31,294 44,665 55,959 51,501
    Expenditure 21,662 31,176 42,755 38,062
    EBIT 8,905 12,531 12,424 12,790
    EBIT margins (%) 29.1% 28.7% 22.5% 25.2%
    Profit before tax 9,632 13,490 13,204 13,439
    Tax 1,927 2,568 2,445 2,085
    Net profit 7,705 10,922 10,759 11,354
    Minority interest - 55 (79) (4)
    Equity in affiliates 79 65 48 78
    Extraordinary item - - 211 -
    Net Profit after adjustments 7,784 11,042 10,939 11,428
    NPM (%) 25.5% 25.3% 19.8% 22.5%
    No. of shares 478.3 478.3 478.3 478.3
    EPS (Rs) 16.3 23.1 22.9 31.9

    TCS is a part of the Tata Group, and holds the distinction of becoming the first Indian software company to cross the coveted US$ 1 bn revenue mark in FY03. During the nine-months ending December 2003 (9mFY04), TCS reported consolidated revenues and profits of Rs 50.8 bn and Rs 11.4 bn respectively. The company's operating margins (including depreciation) stand at 25.2%.

    The company derives the largest chunk (77%) of its revenues from the application development and maintenance services. The remaining is being contributed by enterprise solutions and package implementation (20%), asset leveraged solutions (2%) and consulting and other services (1%). Quite unlike its domestic peers like Infosys and Satyam, TCS' revenue share from the US region is a low 64%, with another major chunk (20%) coming from the European region. Also, contribution of Indian revenues for the company is at a high of 13%, unlike its peers who have miniscule (2%-4%) contribution from the same. However, around 69% of this high contribution of Indian revenues is result of the contribution of CMC, which TCS had acquired from the Government of India in 2001.

    TCS has a clientele of 491 and a major 19% contribution to revenues comes from the GE Group alone. The company has a high repeat business of around 97%. As for the delivery model, a high 64% of TCS' revenue comes from its onsite efforts. As a matter of comparison, this figure for Infosys stands at a lower 55%. TCS employed 28,797 employees at the end of December 2003 and its revenue per employee thus stand at Rs 1.8 m, lower than Infosys' Rs 1.9 m at the end of FY04.

    TCS, based on its annualised 9mFY04 earnings, has an EPS of Rs 31.9.While this write-up was just a brief regarding the overall business of TCS, we shall put up a detailed IPO report shortly, which will elaborate on the business model of the company as well as its comparative standing with its peers and its growth prospects going forward.The report will also cite the reasons to apply/not apply for the IPO.



    Equitymaster requests your view! Post a comment on "TCS' prospectus: Excerpts". Click here!


    More Views on News

    TCS: Currency Volatility Plays Spoilsport (Quarterly Results Update - Detailed)

    Jul 14, 2017

    TCS starts FY18 decently despite an adverse currency impact.

    TCS: A Dull End to the Year (Quarterly Results Update - Detailed)

    Apr 21, 2017

    Client specific issues result in a dull end to FY17.

    Tata Consultancy Services (TCS): A Strong Performance (Quarterly Results Update - Detailed)

    Jan 13, 2017

    Tata Consultancy Services (TCS) has declared results for the quarter ended December 2016. The company has reported a 1.5% QoQ increase in consolidated sales while the consolidated net profit was up 0.9% QoQ.

    Tech Mahindra: Our Revised View (Quarterly Results Update - Detailed)

    Aug 2, 2017

    A better than expected turnaround in performance results in a change in view.

    Wipro: A Decent Start to the Year (Quarterly Results Update - Detailed)

    Jul 27, 2017

    Digital services drive growth for Wipro in 1QFY18.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)



    Compare Company With Charts