TCS, Infosys Join Piotroski 8/9 List With ROE Above 30%

MUMBAI — Eight out of nine. That's the Piotroski F-Score for Tata Consultancy Services and Infosys, according to FairStock data. TCS trades at a price-to-earnings multiple of about 17, Infosys at about 15. That puts both stocks on the Piotroski 8/9 list. TCS posts return on equity of 47.7% and return on capital employed of 64.6%, company filings show. Infosys reports ROE of 32.0% and ROCE of 37.5%. The F-Score is a nine-point accounting screen. It doesn't measure revenue growth. It checks whether earnings are backed by cash flow and balance-sheet discipline. An 8/9 score signals that accounting quality is intact at two of India's largest IT services companies. Piotroski 8/9 list: what TCS and Infosys scores show The Piotroski screen uses binary tests for profitability and balance-sheet quality, according to FairStock methodology. It tests operating cash flow and balance-sheet risk. TCS's 47.7% ROE stands out. It means the company generates Rs 47.7 in net profit for every Rs 100 of shareholder equity. Infosys's 32.0% ROE is lower but still high for the sector. ROCE numbers run higher because they measure operating return on total capital, not just shareholder equity. Investors should focus on the gap between ROE and P/E. TCS trades at 17 times earnings with an earnings yield near 5.9%. Infosys trades at 15 times with an earnings yield near 6.7%. Both earnings yields sit below India's 10-year government bond yield, which traded near 7% in recent sessions, according to exchange data. That gap is the core tension. High Piotroski scores support earnings quality, but bond yields still compete for investor capital. Sector impact of TCS and Infosys Piotroski scores [Tata Consultancy Services](/stock/TCS) (NSE: TCS) and [Infosys](/stock/INFY) (NSE: INFY) are the two largest weights in the Nifty IT index. When both show 8/9 F-Scores, it reduces the sector-level risk of accounting deterioration. Other Indian IT names don't all match this profile. Mid-cap IT stocks of...