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Tata Consultancy Services Limited (TCS)
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DCF Implied Price
₹1,841.19
-25.9% vs mkt
From NSE filing
Market Price
₹2,485.30
As of 2026-11-04 · Close
Statements
FY26
Ended 2026-03-31
Enterprise Value
₹6.17L Cr
PV FCFF + PV TV
Terminal value 67.9% of EV
Equity Value
₹6.66L Cr
Net Debt Adjusted
WACC
13.14%
CAPM / Capital Cost
Terminal Growth (g)
4.00%
Gordon Growth
Valuation Drivers
base scenario
WACC & Capital Cost
Risk-Free Rate (Rf)6.78%
Beta (β)0.90
Equity Risk Premium (ERP)7.08%
Cost of Equity (Ke)13.14%
Pre-Tax Cost of Debt (Kd)16.67%
Effective Tax Rate (t)25.17%
After-Tax Cost of Debt12.47%
Weights (Equity / Debt)99.2% / 0.8%
Weighted Average Cost of Capital13.14%
Source: CAPM: Rfr=6.78% (INDIA market default for rfr (10Y sovereign yield %)), Beta=0.90 (Per-company registry benchmark beta vs primary index (0.85), Blume-adjusted), ERP=7.08% (INDIA market default for erp (Equity Risk Premium %)). Cost of Equity=13.14% = Rf + Beta x ERP. Pre-tax Cost of Debt=16.67% (after-tax 12.47%). Capital Weights: Equity=99.2%, Debt=0.8%.
Return Metrics & Financial Health
Terminal ROIC
42.0%
+28.9% vs WACC
FCF Yield (Yr 1)
7.2%
FCFF / Equity Val
Implied EV / EBIT
8.9x
Forward Multiple
Net Debt Position
+₹49,062
Net Cash Balance
FCFF & DCF Valuation Schedule
PV FCFF: ₹1.98L Cr
|PV TV: ₹4.19L Cr
|Net: +₹49,062@ 2026-03-31
|Price: ₹1,841.19
| DCF Line Item (Mid-Year) | FY27 | FY28 | FY29 | FY30 | FY31 |
|---|---|---|---|---|---|
EBIT (Operating Profit) EBIT (Operating Profit)Definition Earnings Before Interest and Taxes: core operating profitability before capital structure and taxes. Formula: Revenue - COGS - Operating Expenses - D&A | 69,714 | 74,134 | 78,834 | 83,832 | 89,147 |
Tax Rate % Tax Rate %Definition Effective corporate tax rate applied to operating earnings for NOPAT calculation. Formula: Taxes / PBT | 24.4% | 24.6% | 24.8% | 25.0% | 25.2% |
NOPAT NOPATDefinition Net Operating Profit After Tax: un-levered profit generated purely by core operations. Formula: EBIT × (1 - Effective Tax Rate) | 52,676 | 55,882 | 59,275 | 62,882 | 66,709 |
+ D&A + D&ADefinition Depreciation & Amortization added back because it is a non-cash accounting expense. Formula: Cash Flow Statement D&A Add-back | 5,890 | 6,263 | 6,660 | 7,083 | 7,532 |
− CapEx − CapExDefinition Capital Expenditures: net cash spent on property, plant, equipment, and intangible assets. Formula: Cash Flow Statement Capital Investments | (7,940) | (8,443) | (8,978) | (9,547) | (10,153) |
± ΔNWC ± ΔNWCDefinition Change in Non-Cash Operating Working Capital: cash invested or freed up in working capital. Formula: − (Δ Receivables + Δ Inventory − Δ Payables) | -2,887 | -3,099 | -3,296 | -3,505 | -3,727 |
= FCFF (Free Cash Flow) = FCFF (Free Cash Flow)Definition Free Cash Flow to Firm: unlevered cash flow available to all debt and equity capital providers. Formula: NOPAT + D&A − CapEx − ΔNWC − Stock Comp | 47,739 | 50,603 | 53,662 | 56,913 | 60,361 |
Discount Factor (Mid-Year) Discount Factor (Mid-Year)Definition Mid-year discount factor assuming cash flows arrive continuously throughout the year. Formula: 1 / (1 + WACC)^(t - 0.5) | 0.9402 | 0.8308 | 0.7344 | 0.6492 | 0.5738 |
PV(FCFF) PV(FCFF)Definition Present Value of Free Cash Flow discounted back to current fiscal year. Formula: FCFF × Mid-Year Discount Factor | 44,886 | 42,042 | 39,408 | 36,945 | 34,636 |
| Σ PV of Explicit Forecasts (PV FCFF) | ₹197,917 | ||||
| + PV of Terminal Value (4.0% g, 68% of EV) | ₹419,180 | ||||
| Enterprise Value (EV) | ₹617,097 | ||||
| + Net Cash & Liquid Assets | + ₹49,062 | ||||
| Equity Value DCF Implied Share Price | ₹666,159 ₹1,841.19 / share | ||||
WACC: 13.14%Cost of Equity: 13.14%Cost of Debt: 12.47%Equity Wt: 99.2%
Terminal ROIC: 42.0% (Reinvest 9.5%)
Financial Forecast Summary
| Line Item | FY27 | FY28 | FY29 | FY30 | FY31 |
|---|---|---|---|---|---|
| Revenue | ₹289,670 | ₹308,035↑ | ₹327,565↑ | ₹348,332↑ | ₹370,417↑ |
| EBITDA | ₹75,604 | ₹80,397↑ | ₹85,494↑ | ₹90,915↑ | ₹96,679↑ |
| EBIT (Operating Profit) | ₹69,714 | ₹74,134↑ | ₹78,834↑ | ₹83,832↑ | ₹89,147↑ |
| Net Profit (PAT) | ₹55,169 | ₹58,370↑ | ₹61,757↑ | ₹65,358↑ | ₹69,178↑ |
| D&A | ₹5,890 | ₹6,263↑ | ₹6,660↑ | ₹7,083↑ | ₹7,532↑ |
| CapEx | ₹7,940 | ₹8,443↑ | ₹8,978↑ | ₹9,547↑ | ₹10,153↑ |
| Operating Cash Flow | ₹58,172 | ₹61,534↑ | ₹65,121↑ | ₹68,936↑ | ₹72,983↑ |