1. At a Glance
TCS reported Q1FY26 revenue of ₹63,437 Cr, up just 0.7% QoQ, with Net Profit at ₹12,819 Cr (up 4.3% QoQ). Operating margin stayed steady at ~27%, and an interim dividend of ₹11/share was declared to keep long-term investors from falling asleep.
2. Introduction with Hook
India’s OG IT stock did what it does best — underwhelm while staying rich. With a $9.4B deal pipeline, margins flatter than Infosys’ charm, and more buybacks than new ideas, TCS is the steady uncle in the IT shaadi. Dependable? Yes. Exciting? Not since 2014.
3. Business Model (WTF Do They Even Do?)
Global tech consultancy offering:
- 💻 IT Services & Automation
- ☁️ Cloud + AI Implementation
- 🏦 BFSI-heavy client book (33%)
- 🌍 Mostly exports (~90% revenue is foreign)
Still runs on billable hours, still hates moonshots. AI buzz is there, but innovation? More like Infosys but with Tata branding and more dividends.
4. Financials Overview – Profit, Margins, ROE, Growth
| Metric | Value |
|---|---|
| Revenue | ₹63,437 Cr |
| EBIT Margin | 27% |
| Net Profit | ₹12,819 Cr |
| Net Margin | 20.2% |
| ROE (TTM) | 52.4% 🔥 |
| ROCE | 64.6% 🧨 |
Margins held up, profit ticked up, revenue barely moved. That’s TCS consistency for you.
5. Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹3,382 |
| P/E | 24.8x |
| P/B | 12.9x (😬) |
| Dividend Yield | 1.77% |
| FV Range | ₹3,100 – ₹3,600 |
EduFair Value Logic:
Assume FY26E EPS = ₹140 → Fair P/E = 22–26x ⇒ ₹3,080 – ₹3,640 range.
Valuation not insane, but definitely no longer attractive. Paying 13x Book for a 10% grower feels like ordering dosa at Taj when Saravana Bhavan exists next door.
6. What’s Cooking – News, Triggers, Drama
- 🧠 AI, Cloud, Cybersecurity – strategic bets, no hard metrics
- 💸 Interim dividend ₹11/share (again)
- 🧾 Order Book = $9.4B (flat YoY)
- 📉 Attrition dropped further to ~12% — stabilizing supply
- 🤝 No big M&A, no moonshots, no juicy drama
7. Balance Sheet – How Much Debt, How Many Dreams?
| Item | Value |
|---|---|
| Net Cash | ₹40,000+ Cr |
| Total Assets | ₹1.59 Lakh Cr |
| Debt | ₹9,392 Cr (negligible vs cash) |
| Reserves | ₹94,394 Cr |
| Equity Capital | ₹362 Cr |
Basically a cash printing machine with Tata logo and zero balance sheet stress. Mukesh bhai would call this financially boring.
8. Cash Flow – Sab Number Game Hai
| FY25 Free Cash Flow | ₹48,908 Cr ✅ |
| Capex | Minimal |
| Buybacks & Dividends | ₹47,438 Cr (🤯) |
| Net Cash Change | Negative (as usual) — because they keep giving it all away
Dividends > Investments, which is good if you’re a retiree. Not so much if you want long-term wealth compounding.
9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 52.4% ✅ |
| ROCE | 64.6% ✅ |
| OPM | 27% ✅ |
| Tax Rate | 24% |
| Debtor Days | 84 (slightly worsening) |
| CCC | 84 days (manageable) |
Verdict: Operationally tight, asset-light, but top-line growth is slowly dozing off.
10. P&L Breakdown – Show Me the Money
| Quarter | Revenue | Net Profit | OPM |
|---|---|---|---|
| Q1 FY26 | ₹63,437 Cr | ₹12,819 Cr | 27% |
| Q4 FY25 | ₹64,479 Cr | ₹12,293 Cr | 26% |
| Q3 FY25 | ₹63,973 Cr | ₹12,444 Cr | 27% |
| Q2 FY25 | ₹64,259 Cr | ₹11,955 Cr | 26% |
No big bang. Just reliable, quarterly compounding. Like FD returns on steroids.
11. Peer Comparison – Who Else in the Game?
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E | OPM | ROE |
|---|---|---|---|---|---|
| TCS | 2,56,148 | 49,511 | 24.8x | 27% | 52.4% |
| Infosys | 1,62,990 | 26,516 | 25.3x | 24% | 28.8% |
| HCL Tech | 1,17,055 | 17,399 | 25.9x | 21.8% | 25.2% |
| Wipro | 89,088 | 13,090 | 21.2x | 20.2% | 16.6% |
| LTIMindtree | 38,008 | 4,599 | 34.2x | 17% | 21.5% |
TCS remains the benchmark on margins and ROE, but lags in topline growth vs newer peers.
12. Miscellaneous – Shareholding, Promoters
- 👑 Promoters (Tata Sons): 71.77%
- 🐘 FIIs: 12.04%
- 💪 DIIs: 11.49%
- 🤏 Public: 4.63%
- 😴 Retail investors: Happy with dividend, bored with growth
- 👨💻 No promoter pledging, no governance issues
13. EduInvesting Verdict™
“TCS is like that uncle who gifts you cash every Diwali, never misses a family function, but hasn’t changed his hairstyle since 1998.”
Solid, stable, cash-rich. But at this valuation and this growth rate, TCS is best suited for dividend collectors and pension fund managers — not for adrenaline-junkie investors hunting 10x.
The ₹11 dividend is sweet. But the stock won’t run like Jio or Zoom or Nvidia. It’s here to protect capital, not multiply it.
🧮 Tags: TCS Q1 FY26, Tata Consultancy Services Results, IT stock update, TCS dividend, Indian IT sector, ROE leader, AI cloud growth, EduInvesting
✍️ Written by Prashant | 📅 July 10, 2025
