TCS 2023-24 Annual Report Analysis

Mon, 15 Apr

TCS has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

TCS Income Statement Analysis

• Operating income during the year rose 6.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 7.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 26.3% in FY24 as against 26.2% in FY23.
• Depreciation charges decreased by 0.7% and finance costs decreased by 0.1% YoY, respectively.
• Other income grew by 22.5% YoY.
• Net profit for the year grew by 9.0% YoY.
• Net profit margins during the year grew from 18.8% in FY23 to 19.1% in FY24.

TCS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	2,254,580	2,408,930	6.8%
Other income	Rs m	36,100	44,220	22.5%
Total Revenues	Rs m	2,290,680	2,453,150	7.1%
Gross profit	Rs m	590,980	633,380	7.2%
Depreciation	Rs m	50,220	49,850	-0.7%
Interest	Rs m	7,790	7,780	-0.1%
Profit before tax	Rs m	569,070	619,970	8.9%
Tax	Rs m	146,040	158,980	8.9%
Profit after tax	Rs m	423,030	460,990	9.0%
Gross profit margin	%	26.2	26.3
Effective tax rate	%	25.7	25.6
Net profit margin	%	18.8	19.1

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TCS Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 461 billion as compared to Rs 436 billion in FY23, thereby witnessing an increase of 5.8%.
• Current assets rose 2% and stood at Rs 1,130 billion, while fixed assets fell 0% and stood at Rs 301 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 1,430 billion as against Rs 1,403 billion during FY23, thereby witnessing a growth of 2%.

TCS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	904,240	904,890	0.1
Current Liabilities	Rs m	435,580	461,040	5.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	1,403,440	1,430,460	1.9
Current assets	Rs m	1,102,700	1,129,840	2.5
Fixed Assets	Rs m	300,740	300,620	0.0
Total Assets	Rs m	1,403,440	1,430,460	1.9

TCS Cash Flow Statement Analysis

• TCS's cash flow from operating activities (CFO) during FY24 stood at Rs 443 billion, an improvement of 5.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 60 billion, an improvement of 15,351.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -485 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 19 billion from the Rs -54 billion net cash flows seen during FY23.

TCS Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	419,650	443,380	5.7%
Cash Flow from Investing Activities	Rs m	390	60,260	15,351.3%
Cash Flow from Financing Activities	Rs m	-478,780	-485,360	-
Net Cash Flow	Rs m	-53,650	18,930	-

Current Valuations for TCS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 114.9, an decline from the EPS of Rs 115.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 4,030.8, stands at 31.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 16.1 times, while the price to sales ratio stands at 6.1 times.
• The company's price to cash flow (P/CF) ratio stood at 28.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	616.2	665.8
TTM Earnings per share	Rs	115.6	114.9
Diluted earnings per share	Rs	116.9	114.9
Price to Cash Flow	x	24.5	28.5
TTM P/E ratio	x	27.4	31.6
Price / Book Value ratio	x	13.7	14.6
Market Cap	Rs m	12,370,338	13,250,793
Dividends per share (Unadj.)	Rs	115.0	73.0

Ratio Analysis for TCS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.5x during FY24, from 2.5x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 80.7x during FY24, from 74.1x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 50.9% during FY24, from 46.8% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 69.4% during FY24, from 63.8% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 32.8% during FY24, from 30.7% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	2.5	2.5
Debtors’ Days	Days	8	8
Interest coverage	x	74.1	80.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	30.7	32.8
Return on equity	%	46.8	50.9
Return on capital employed	%	63.8	69.4

To see how TCS has performed over the last 5 years, please visit here.

TCS Share Price Performance

Over the last one year, TCS share price has moved up from Rs 3,189.9 to Rs 4,030.8, registering a gain of Rs 840.9 or around 26.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 35,559.4 (down 0.6%). Over the last one year it has moved up from 28,235.2 to 35,559.4, a gain of 7,324 points (up 25.9%).

Overall, the S&P BSE SENSEX is up 23.1% over the year.

(To know more, check out historical annual results for TCS and quarterly results for TCS)