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Tata Consultancy Services Ltd. Key Financial Ratios

NSE:TCS | COMPUTERS - SOFTWARE

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Profitability Margins

2-year trend showing gross, operating, and net profit margins

FY 2024 - FY 2025

Tata Consultancy Services Ltd.'s net profit margin of 18.8% in FY2025 reflects good profitability, with operating margin at 25.5% and gross margin at 43.8%.

Understanding Profitability Margins

In FY 2025, Tata Consultancy Services Ltd. posted a gross margin of 43.8%, an operating margin of 25.5%, a net margin of 18.8%. Gross Margin = (Revenue - COGS) / Revenue; Operating Margin = EBIT / Revenue; Net Margin = Net Income / Revenue. Typical healthy ranges: Gross 20-40%, Operating 10-20%, Net 5-10%+. Consistent or improving margins indicate strong competitive positioning.

Company Performance

2-year trend showing revenue, gross profit, and net profit

FY 2024 - FY 2025

Tata Consultancy Services Ltd.'s revenue grew 5.7% to 2,592.86B and net profit grew 5.9% to 487.97B YoY in FY2025, indicating moderate business momentum.

Understanding Company Performance

In FY 2025, Tata Consultancy Services Ltd.'s revenue grew by 5.7% year-over-year. Revenue is total income from operations. Gross Profit is revenue minus cost of goods. Net Profit is the bottom line after all expenses. Consistent growth across all three signals a healthy, expanding business.

Return on Equity (ROE)

2-year trend showing shareholder returns

FY 2024 - FY 2025

Tata Consultancy Services Ltd.'s ROE of 51.0% in FY2025 indicates excellent capital efficiency.

Understanding Return on Equity (ROE)

In FY 2025, Tata Consultancy Services Ltd. reported an ROE of 51.0%. ROE = (Net Income / Shareholders' Equity) x 100. Measures how efficiently the company turns equity into profit. Above 15% is generally strong; above 25% is excellent. Very high ROE may signal high leverage — check alongside debt levels.

Net Income vs Free Cash Flow

2-year trend comparing profitability with cash generation

FY 2024 - FY 2025

Tata Consultancy Services Ltd.'s FCF/NI ratio of 0.94x in FY2025 indicates reasonable cash generation relative to profits.

Understanding Net Income vs Free Cash Flow

In FY 2025, Tata Consultancy Services Ltd.'s free cash flow trailed net income. Free Cash Flow = Operating Cash Flow - Capital Expenditure. When FCF exceeds net income, it suggests high-quality, cash-backed earnings. Persistent gaps may indicate aggressive accounting or heavy capex needs.

Net Income vs Operating Cash Flow

2-year trend comparing profitability with cash from operations

FY 2024 - FY 2025

Tata Consultancy Services Ltd.'s OCF/NI ratio of 1.00x in FY2025 indicates sound cash management with earnings well-backed by cash.

Understanding Net Income vs Operating Cash Flow

In FY 2025, Tata Consultancy Services Ltd.'s operating cash flow exceeded net income. Operating Cash Flow is the actual cash from core operations. OCF exceeding net income signals strong cash collection. OCF trailing net income may indicate aggressive revenue recognition or working capital issues.

Leverage Ratios

Measure a company's financial leverage, liquidity, and ability to meet financial obligations.

Current Ratio Analysis

2-year trend showing short-term liquidity position

FY 2024 - FY 2025

Tata Consultancy Services Ltd.'s current ratio of 2.32x in FY2025 indicates healthy short-term liquidity.

Understanding Current Ratio

In FY 2025, Tata Consultancy Services Ltd. reported a current ratio of 2.32. Current Ratio = Current Assets / Current Liabilities. Measures short-term liquidity. A ratio of 1.5-3.0 is generally healthy; below 1.0 signals liquidity risk; above 3.0 may indicate underutilized assets.

Interest Coverage Ratio Analysis

2-year trend showing ability to service debt

FY 2024 - FY 2025

Tata Consultancy Services Ltd.'s interest coverage ratio of 83.1x in FY2025 indicates comfortable debt servicing capacity.

Understanding Interest Coverage Ratio

In FY 2025, Tata Consultancy Services Ltd. reported an interest coverage ratio of 83.1x. Interest Coverage = EBIT / Interest Expense. Shows how many times operating profit covers interest payments. Above 5x is comfortable; below 1.5x signals potential difficulty servicing debt.

Debt-to-Equity Ratio Analysis

2-year trend showing financial leverage and capital structure

FY 2024 - FY 2025

Tata Consultancy Services Ltd.'s debt-to-equity ratio of 0.10x in FY2025 reflects a conservative, low-leverage capital structure.

Understanding Debt-to-Equity Ratio

In FY 2025, Tata Consultancy Services Ltd. reported a debt-to-equity ratio of 0.10. Debt-to-Equity = Total Debt / Total Equity. Below 1.0 is conservative; 1.0-2.0 is moderate; above 2.0 indicates higher financial risk. Capital-intensive industries naturally carry higher ratios.

Total Debt Analysis

2-year trend showing total debt with year-over-year changes

FY 2024 - FY 2025

Tata Consultancy Services Ltd.'s debt increased 17.1% YoY in FY2025 — rising leverage demands close monitoring.

Understanding Total Debt

In FY 2025, Tata Consultancy Services Ltd.'s total debt increased by 17.1% year-over-year. Total Debt includes short-term debt, long-term loans, debentures, and capital leases. YoY changes (shown as percentages) reveal whether the company is leveraging up or deleveraging.

Shares Outstanding

Year-over-year change in diluted shares outstanding

Tata Consultancy Services Ltd.'s diluted shares decreased 0.8% YoY in FY2025, indicating shareholder-friendly buybacks.

Over 2 years (FY2024–FY2025), diluted shares decreased 0.8% from 3.65B to 3.62B, reflecting long-term shareholder value creation.

Understanding Shares Outstanding

In FY 2025, Tata Consultancy Services Ltd.'s diluted shares decreased by 0.8% year-over-year. Diluted Shares accounts for stock options, warrants, and convertibles. Positive YoY change means dilution (red); negative means buybacks (green). Consistent dilution above 5% annually is a red flag.

Data from audited consolidated filings. For educational purposes only — not investment advice. Last update: FY 2025