TCS (TCS)

FairStock Score: 85/100 — HIGH CONVICTION

Score breakdown: P/E: 2/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 1/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Here is what you need to know about TCS. It is a high-quality IT services stalwart with a fortress balance sheet and exceptional returns. Return on capital is about 64.6 percent and return on equity is nearly 47.7 percent with debt to equity of just 0.102. Free cash flow is around forty thousand crore rupees, the current ratio is about one point nine, and the Altman Z-score is over twelve. That is the good news. The tricky part is valuation. The Graham number is only about nine hundred thirty-four rupees, and the DCF value is around one thousand nine hundred nine rupees. The market price is roughly twenty-four hundred to twenty-five hundred depending on which data feed you look at, so you are paying a very rich premium for quality. The quant signal shows a short-term mean-reversion setup. The z-score is minus one point five nine, and the half-life is about five point seven days, meaning the stock is about two point seven percent below its twenty-day average and might bounce back over the next one to two weeks. But this is not an extreme signal. Volume is mixed. The volume anomaly is neutral, near one, but the five-day volume imbalance is negative thirty-seven percent, meaning sellers were aggressive on down days. The twenty-day imbalance is positive five point five percent, so longer-term money has been accumulating. Price momentum is strong over twenty days, up about twenty-one point seven percent, but profit momentum is basically flat to negative, so this rally may be more market-driven than company-specific. Liquidity is excellent: impact cost for one crore rupees is only three point seven basis points, and daily volatility is only one point eight percent. If you already own TCS, this is a hold. If you are thinking about buying fresh, I would not chase the rally. A small tactical position of two to three percent risk for a mean-reversion bounce makes sense only if you have a stop below the recent low. For long-term investors, better entry points would be closer to two thousand or below, or wait for profit growth to re-accelerate. The overall rating is hold with medium confidence and a twelve-month horizon.

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Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer