10 · Methodology

How the Model Works

An independent academic financial analysis and forecasting project. Not professional investment research, not TCS internal analysis, and not official TCS guidance.

Forecasting Chain

Forecast_Model sheet

01FY2025 Revenue (actual)Base year from Historical_Data
02× (1 + Revenue Growth %)Per year, per scenario (or custom override)
03= RevenueFY26 → FY27 → FY28, compounding
04× EBITDA Margin %Per year, per scenario
05= EBITDA
06− Depreciation (Revenue × Depr %)
07= EBIT
08− Tax (EBIT × Tax Rate)
09= Net ProfitOther Income not modelled
10÷ Shares Outstanding (362 Cr)→ EPS
11+ Depreciation − Capex (2.5% of Revenue)→ Free Cash Flow

Periods

Historical: FY2018–FY2025 (8 years), TCS Annual Reports.
Forecast: FY2026–FY2028 (3 years).
Units: ₹ Crore; EPS in ₹; shares in Crore.
Model created: April 2025.

Scenario Methodology

Three parameter sets (Base, Bull, Bear) are stored side by side. A scenario selector picks one column via an index (MATCH/CHOOSE). A custom growth override, when non-zero, replaces all three years' growth rates for the active scenario. The workbook was saved with the Bear case selected; this app opens on Base.

Valuation Methodology

The source model has no DCF or multiple-based valuation. Forecast EPS and FCF are its terminal outputs.

Limitations

Forecast Net Profit = EBIT − Tax, excluding Other Income; forecast net margins are therefore structurally lower than historical net margins.
Capex is a fixed 2.5% of revenue for all scenarios (hard-coded in formulas).
Shares outstanding are held constant at 362 Cr; forecast EPS is not a diluted-weighted figure.
No balance sheet, working capital, or full cash flow statement is modelled.
Implied tax rates FY18-20 appear low (3.8%-12.5%) because Other Income (₹4,826-₹7,572 Cr from interest, forex gains, investments) is taxed at lower rates or exempt. Effective tax on operating income was ~25-26%.
Forecasts are estimates based on historical trends and analyst assumptions — not official TCS guidance.

Primary Data Sources

Sources sheet · last accessed Apr-26

1TCS Annual Report FY2025-26 Consolidated balance-sheet actualsFY2026
2TCS Annual Report FY2024-25 Revenue, Profit, EPS, EmployeesFY2025
3TCS Annual Report FY2023-24 Revenue, Profit, EPS, EBITDAFY2024
4TCS Annual Report FY2022-23 Revenue, Profit, EPS, EBITDAFY2023
5TCS Q4 FY24 Results (NSE Filing) Quarterly financial results PDFQ4 FY24
6BSE India - TCS Filings Regulatory filings, ResultsFY2018-2025
7NSE India - TCS Corporate Filings Annual reports, FinancialsFY2018-2025
8TCS Investor Presentation FY25 Order book, Deal wins, GuidanceFY2025
9AnnualReports.com - TCS Archive Historical Annual Reports (PDFs)FY2004-2025

Other FY2025 Data Points

Recorded in Sources sheet

Operating Margin: 24.3%
Order Book TCV: $39.4 Billion
Attrition Rate: 13.3%
Employees: 6,07,979

This is an independent academic financial analysis and forecasting model. Forecasts and valuations are based on stated assumptions and should not be interpreted as investment advice or official guidance from Tata Consultancy Services.