Managerial Economics ppt on TCS

2. KEY INSIGHTS
•INDUSTRY : IT Consulting, IT Services
•FOUNDED: 1968
•FOUNDER: J.R.D TATA
•HEADQUARTERS: MUMBAI
•KEY PERSON: N CHANDRASEKARAN(Ceo/MD )

4. About Us
• Who We Are: Tata Consultancy Services is an IT services,
consulting and business solutions organization that delivers real
results to global businesses, ensuring a level of certainty that no
other firm can match.
• What We Offer: TCS offers a consulting-led integrated portfolio
of IT and IT-enabled services delivered through its unique Global
Network Delivery Model, recognized as the benchmark of
excellence in software development.
• Lineage: TCS is part of the Tata group, one of India’s largest
industrial conglomerates and most respected brands.
• Workforce: TCS has over 3,24,000 of the world’s best-trained IT
consultants in 46 countries.

5. Product And Services
• Application development and maintenance value (43.80%)
• Asset leverage solutions (2.70%)
• Assurance Services (7.70%)
• Business process outsourcing (12.50%)
• Consulting (2.00%)
• Engineering and Industrial services (4.60%)
• Enterprise solutions (15.20%)
• IT infrastructure services (11.50%)

6. Our Presence
232 offices in 46 countries and 151 solution centres
in 24 countries spread across 42 countries.

7. Mission
• To help customers achieve their business
objectives by providing innovative, best-in-
class consulting, IT solutions and services.
• To make it a joy for all stakeholders to work
with us.
Values
• Leading change, Integrity, Respect for the
individual, Excellence, Learning and sharing.

8. FINANCIAL STATEMENTS

9. BALANCE SHEET

10. SHAREHOLDING PATTERN

12. REVENUES BY GEOGRAPHY

14. FINANCIAL RATIOS
1. Activity Ratio
2. Liquidity Ratio
3. Profitability Ratio
4. Solvency Ratio

15. Activity Ratios
4.47
4.48
4.63
4.35
4.4
4.45
4.5
4.55
4.6
4.65
2013 2014 2015
RECEIVABLE TURNOVER RATIO

16. 81.6
81.3
78.8
77
77.5
78
78.5
79
79.5
80
80.5
81
81.5
82
82.5
2013 2014 2015
NO. OF DAYS OUTSTANDING

17. 5457.71
9386.18
7638.32 7546.8
5962.9
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2011 2012 2013 2014 2015
INVENTORY TURNOVER RATIO

18. 1.5
1.56
1.48
1.47
1.61
1.4
1.45
1.5
1.55
1.6
1.65
2011 2012 2013 2014 2015
ASSET TURNOVER RATIO

19. 2.45 2.48
2.85
3.18
2.78
0
0.5
1
1.5
2
2.5
3
3.5
2011 2012 2013 2014 2015
CURRENT RATIO

20. 2.44 2.47
2.88
3.16
2.8
0
0.5
1
1.5
2
2.5
3
3.5
2011 2012 2013 2014 2015
QUICK RATIO

21. Profitability
Ratios

22. Net Sales
37,324.51
48,893.83
62,989.48
81,809.36
94,648.41
0.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
90,000.00
100,000.00
2010-11 2011-12 2012-13 2013-14 2014-15
Net Sales

23. Operating Profits
11,178.36
14,435.31
18,039.91
25,152.79 24,481.71
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
2010-11 2011-12 2012-13 2013-14 2014-15
Operating
Profits

24. Operating Profit Margin
29.93
29.3
29.54
33.29
28.57
26
27
28
29
30
31
32
33
34
2010-11 2011-12 2012-13 2013-14 2014-15
Operating Profit Marg

25. Net Profit
9,189.79
10,523.45
14,075.69
19,331.87 20,059.70
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
2010-11 2011-12 2012-13 2013-14 2014-15
Net Profit

26. Net Profit Margin
25.85
28.24
26.4
28.56
26.17
24
25
26
27
28
29
2010-11 2011-12 2012-13 2013-14 2014-15
Net Profit Margin

27. Return On Capital Employed
44.45
53.63
48.07
53.39 52.77
0
10
20
30
40
50
60
2010-11 2011-12 2012-13 2013-14 2014-15
Return On Capital
Employed

28. Return On Equity (ROE)
37.91
37.01
35.21
36.01
38.96
33
34
35
36
37
38
39
40
2010-11 2011-12 2012-13 2013-14 2014-15
Return On Equity

29. Earnings Per Share
46.9
53.65
71.82
98.55
102.41
0
20
40
60
80
100
120
2010-11 2011-12 2012-13 2013-14 2014-15
Earnings Per Share

30. Solvency Ratios

31. Debt Equity Ratio
0.1 0.1 0.1 0.1
0
0.02
0.04
0.06
0.08
0.1
0.12
2010-11 2011-12 2012-13 2013-14 2014-15
Debt-Equity Ratio

32. Interest Coverage Ratio
562.67
87.69
3.71 13.48 15.51
0
100
200
300
400
500
600
2010-11 2011-12 2012-13 2013-14 2014-15
Interest Coverage Ratio

33. Proprietary Ratio
•Proprietary Ratio = Proprietary fund / Total
Assets
•44051.88 / 57604.19 = 76.4%

34. Price Earning Ratio
• P/E Ratio = Market value per
share/Earnings per share
• TCS P/E Ratio = 25.5

36. Mergers And Acquisitions
YEAR MONTH Company Name
• 2004 January AFS
• 2004 January ASDC
• 2004 July Phoenix Global Solutions
• 2005 October Financial Network
Solutions
• 2005 October Pearl Group
• 2006 February Tata InfoTech
• 2008 December Citigroup Global Services
• 2013 July Alti Sa

37. Current News , Events and Scenario
• TCS announced to spend Rs 100 crores for Clean India
Campaign on Independence Day.
• TCS became first Indian company to achieve market
capitalization of Rs 5 lakh crores on 23rd July 2015.
• TCS joined the league of top 10 global IT service companies.
• Plans to setup largest corporate learnning centre in
Thiruvanthapuram .
• TCS on June 16, 2015 announces to launch Center for
Excellence(CoE) for next generation technology solution.

38. TCS Generic Business Strategy
• Low cost Global delivery 24*7 model
• Focus on customer relationship management,customer retention
(for repeat business revenue which is 95.6%).
• Timely delivery with the help of proven delivery & quality
framework –iQMS.
• Differentiation in low end services in terms of cost,resources.
• Differentiation in high end services as consulting in terms of niche
offerings,expertise.
• Protection from currency fluctuations with the help of currency
hedging.

40. Market Development Strategy
• New/Emerging Markets: India,Middle-east and Australia.
• Current Product: ADM,BPO,KPO, consultancy services (in
BFSI,manufacturing and retail) and software products
(financial products)
• Recommendation: Since these are fast developing IT
market, TCS needs a paradigm shift in focus from US and
EU markets to these markets.

41. Other Global Strategies
• Since last few years TCS is successfully leveraging
labour cost in Eastern Europe, South America and
China.
• Recent acquisitions in Ireland and Latin America
demonstrate its ambition to create delivery centers of
respectable size outside of India.
• TCS was the first one to set up a delivery centre in
China.

42. Corporate Strategies
• Diversification Strategy:
1.In February 2008,TCS restructured its global operations to adopt
an integrated, customer – centric approach.
2. The company’s operations are now divided into five units :
Industry Solutions (for vertical – specific services),
Major Markets (North America, Western Europe & the U.K.),
New Growth Markets (Latin America, Eastern Europe,
Middle East & Africa and India).
Strategic Growth Business (TCS Financial solutions, SMB and
platform – based BPO) and Organizational Infrastructure

43. Strategic Alliances
1. TCS has strategic relationships with various global
technology vendors. These relationships are in various
dimensions such as Customer, Service Provider, Supplier,
and Alliance Partner.
2.
3. TCS and these technology vendors collaborate on joint
research leveraging each other’s strengths to research
and to the development of best-of-breed offerings.
Some of the strategic alliances are listed below:
a) Intel
b) SAP
c) Hewlett – Packard
d) EMC2

44. Acquisition Strategy
1. Nov 2008 : TCS Acquisition of Citigroup Services.
2. Feb 2006 : Tata Infotech (TIL) Limited was merged into TCS
Limited.
3. March 2006 : TCS, through its subsidiary, Diligenta,acquired a
basis in part of UK’s Pearl Group.
4. Oct.31,2006 : Similar to the financial stakes made above, TCS
again expanded its banking products and consolidated its
European operations after acquiring a 75% equity stake in its
Switzerland – based partner, TKS – Teknosoft. TKS was the
marketing agent for TCS in Europe.

45. TCS Joint Ventures
1. TCS went for a joint venture (JV) in Feb 2007 with three
Chinese partners.
2. The TCS joint venture will thus be one of the largest
software companies in China once it reaches its 5,000-
employee target.
3.
4. Another JV is between TCS and SBI (State Bank Of
India) in Nov 2005 to cater advanced technology
solutions and domain consulting for the banking and
financial services sector.

49. Awards
• TCS ranked #1 for customer satisfaction in the UK.
• TCS was awarded the Business Standard's Company of the
Year award for 2012
• In 2012, the company won Gold Shield award for excellence in
financial reporting from the Institute of Chartered Accountants
of India (ICAI)
• The company won 'Recruiting and Staffing Industry Leader of
the Year' and ‘Best Employer Brand’ awards at the World HRD
Congress' annual meet in 2012
• TCS was ranked #1 IT service provider for the Manufacturing in
Europe, Middle East and Africa (EMEA) by International Data
Corporation in 2014