Equity Valuation Of A Selected Company TCS Using Multiple Valuation Methods

Abstract

The subject for this research paper shall be an equity valuation analysis of Tata Consultancy Services Limited, an established company operating within the IT sector in India. In order to evaluate the intrinsic value of TCS, various methods of equity valuation would be used for this company. They include Discounted Cash Flow (DCF), relative valuation and financial ratios analysis. The source for this research would consist of annual reports, financial databases, journal articles among others. Financial ratios evaluated in this research would include net profit margin, return on assets, return on equity, earnings per share, debt-to-equity ratio and price-to-earnings ratio. Based on the findings, Tata Consultancy Services exhibited profitability, liquidity and shareholder benefits over the period of time. DCF Model analysis showed the high intrinsic value of the firm due to stability and consistency of cash flows and its sustainability. The statistical methods involved the use of regression and ANOVA techniques which were done through the use of Microsoft Excel and SPSS software. Summary of Based on the above research results, TCS is a stable company, hence making a suitable investment firm.