The IPO of Tata Consultancy Services (TCS), Asia's largest software services company, will begin on July 29, 2004. Through this public issue, the company has put on offer 55.4 m equity shares of the face value of Re 1 each. The price band fixed by the company is Rs 775 to Rs 900 per share. 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
Profit before tax
Equity in affiliates
Net Profit after adjustments
No. of shares
About the company
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 FY04, TCS reported consolidated revenues and profits of Rs 71.2 bn and Rs 16.1 bn, YoY growth of 29% and 47% respectively. The company's operating margins stand at 27.3%, an improvement of 290 basis points over FY03 margins.
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 (19%), asset leveraged solutions (3%) 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 62%, 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.
TCS has a clientele of 548 and a major 18% 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 30,121 employees at the end of FY04 and its revenue per employee thus stand at Rs 2.4 m, higher than Infosys' Rs 1.9 m at the end of FY04. TCS' FY04 EPS stands at Rs 35.4.
Our IPO analysis...
While this write-up was just a brief regarding the overall business of TCS, we shall put up a detailed IPO report tomorrow, 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.
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.
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: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407