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Safal Niveshak StockTalk: TCS

Statutory Warning: This report may cause a reaction, and acting on it can be injurious to your wealth.

Note: This StockTalk analysis has been written by Nishanth Muralidhar.

About TCS
Tata Consultancy Services (TCS) is one of India’s leading IT services companies, with the backing of one of the most valuable brands of India – the Tata Group. It is India’s biggest IT service company by employee headcount, as well as the biggest by revenues currently. TCS was also the first IT company in India to achieve revenues of US$ 10 billion.

TCS provides IT services like application development and maintenance, business process outsourcing, application testing, business intelligence, consulting, Enterprise Resource Planning software, and Remote Management Services to a wide variety of clients across North America, Europe, Australasia, Scandinavia, SouthEast Asia, Africa, South America, the Middle East and India. The company also has a BPO arm which is the second biggest in India according to a Dataquest survey.

Let’s take a closer look at the business model of TCS. The company, like most other Indian IT service companies, follows a offshore-onsite model.

What this means is that when TCS wins an application maintenance contract from a North American Bank, it sends some of its employees (mostly from India, on work permits) to gain knowledge on the software systems of the bank for a period of say six months. After having gained sufficient knowledge, some of the employees would stay on while others leave back to set up an offshore team for the client.

So the onsite employees interact with the client and assign tasks to the offshore team, whereby the offshore team completes them in India and delivers them to the onsite team. Given the time difference between India and the west, a project is worked on for all 24 hours of the day, first 12 hours in the west and the next 12 in India. So, for clients, the work gets done faster and at a much cheaper rate than having to hire employees themselves.

Now what are the advantages of this model? As observed, work goes on for 24 hours ensuring faster completion of the tasks, and the client gets work done at a much cheaper rate without having to hire expensive employees. For TCS, it incurs most of its expenses in rupees (as salaries and other costs for offshore employees are borne in India) and revenues are billed in dollars. As the billing rate is very different for onsite and offshore employees (onsite employees are typically paid in dollars), TCS derives most of its revenues by exploiting the low-cost offshore arbitrage model.

So with a offshore/onsite ratio of say 70/30, TCS make good profits on every project. As more work comes offshore, the more advantageous it is in terms of costs for the client and revenues for TCS.

TCS has a very wide variety of service offerings, whereby it can position itself to win multiple contracts from the same client and offer a complete range of solutions for the client’s IT needs, ensuring a predictable stream of revenue from the client. IT application development and maintenance contracts are typically long term, as there is a somewhat long gestation period for the vendor company (TCS) to learn the applications and start working successfully.

Many clients include financial services companies and retailers, clients who typically don’t like disruptions in their business operations by frequent IT vendor shifts. So once TCS is entrenched in a particular client, it takes some good amount of force (lower bidding/problems caused by TCS employees/big mistakes in work done) to get them dislodged.

TCS, as well as other Indian IT services companies, usually work on two types of contracts – Fixed Price and Time and Material.

In fixed price contracts, the client and TCS would agree on the sum to be paid for a certain amount of work. Then it is left to TCS’s discretion to decide how many employees would work on the project, the onsite-offshore ratio, utilization etc. So TCS pulls the profitability levers on Fixed Price contracts as per its business needs.

Time and Material contract is where the client requests for a variable number of people to work on the projects and pays them for the hours worked. As the revenue stream from these types of contracts is inherently unpredictable, TCS prefers to have a higher proportion of fixed price contracts.

Another less-discussed advantage of TCS, compared to other IT services companies, is the company’s ability to obtain and execute a variety of projects across various geographies and client spectrum. TCS served Indian governmental bodies, both Central and State, before others started looking at the opportunities there. It also started offices in South America long before others started realizing Latin American potential. TCS had also established accounts in Europe and Scandinavia before other companies like Cognizant started addressing the markets there.

What do the numbers tell?
Let’s now look at the financial performance factors of TCS.

Sales, EPS and Profit Growth: Sales, EPS and profit growth for TCS for the past 5 years stand at a compounded rate of 22.5%, 22.6% and 24% respectively. These are healthy growth rates compared to the industry average.

As per estimates from Gartner, global IT spending is expected to reach US$ 3.8 trillion in 2013 and as per Nasscom, Indian IT sector is estimated to grow at 11% in the coming year. As TCS has crossed US$ 10 billion in revenues recently, there is a huge addressable market still and the company is also having one of the strongest deal pipelines in the industry, indicating a rich pool of opportunities yet to come.

Moat: As explained above, TCS does not have a strong differentiating factor (like any Indian IT services company) and usually wins contracts based on being the lowest-cost provider and wins repeat business based on established relationships and performance. As this is usually the model adopted by other IT services companies as well, there is no distinguishing factor for the presence of a moat.

However, as TCS has a very wide variety of service offerings and clients across various geographies, the diversity of its revenue streams ensures a predictable flow of earnings. The percentage of repeat business over the last 5 years has been 90%, indicating good client satisfaction.

Return on Capital Employed: TCS’s average return on capital employed for the last 10 years stands at a solid 61.9% , which is higher than even it’s close competitor Infosys and highest among all its peers. This is an outstanding indicator for an investor as it shows TCS’s capability to generate good returns from the business.

Balance Sheet Strength: TCS has a solid balance sheet, with negligible debt and a lot of cash and investments on the books (Rs 7,400 crore as of FY12 Annual Report)

Dividend History: TCS, being from the Tata stable, has a history of rewarding shareholders and has had a very healthy dividend payout ratio of 37% between FY08 and FY12,which is a good sign. Cold hard cash is hard to conjure up, unlike earnings and positive news announcements.

Free Cash Flow Generation: TCS’s FCF shows a positive trend over the past 8 years with a growth rate of 13.7%, which is a confidence boosting sign for investors. Unlike earnings,which are susceptible to accounting manipulations, increasing and positive FCF speaks volumes for the financial strength of a company.

Management Profile: TCS, being from one of the most reputed brand groups in India, boasts of having a seasoned management team of high pedigree and professionalism. The company is a market leader in the Indian software space and that is due in no small part to the capabilities of its senior management.

TCS, as explained above, follows a low cost arbitrage model for low-end work and really does not have much revenue from innovation and high knowledge work. As per the company’s FY12 annual report, Application Development and Maintenance (low end spectrum of IT services) accounted for 44% of total revenue and innovative and high end work (Asset Leverage solutions and Consulting) contributed only 6%.

In my opinion, this is the biggest risk that TCS faces and one that it will be forced to address sooner than they like. If TCS has to move up the outsourcing ladder, it will have to move on from the low hanging fruit of low-end work and take up more consulting and high-end knowledge work. As per the annual report, the company has strategies to combat these issues, but it will take time to reflect in number.

The low-cost offshoring advantage will disappear over tim , as India gets more and more expensive and standard of living and salaries go higher over a period of 10 years or so.

The next risks are the political implications of outsourcing. There are currently a lot of controversies associated with outsourcing, namely the H1B work visa program being abused by the Indian IT biggies amidst high unemployment in America.

As per the FY12 annual report, around 50% of TCS’s revenues comes from North America, posing a significant impact from the visa issue. The recent backlash in Canada and Australia over the visa programs for technology workers is also a case in point (TCS is involved in both these cases).

All over the Western world, there is a growing push against the visa programs for technology workers, as evidenced by the Immigration Bill currently in the US Senate and other measures adopted by Western countries. There are a number of measures that TCS can adopt to offset the impacts, such as moving work offshore, having more local workforce in the countries of their clients, having more subcontracting workers at onsite, having delivery centres located in the client countries or near by (giving rise to the term called ‘near-shoring’; Mexico and Latin American countries are used for nearshoring). But the associated costs with these options are significant enough that TCS has not adopted it in a very big way. All said and done, this does pose a significant risk to the current business model.

A third risk is employee attrition ,revenues and expenses associated with employee linearity. TCS being a big employer naturally will face some attrition, but the crucial risk is of people with specialised knowledge leaving the company.But I dont see this as a significant risk as this is something every company faces and takes measures to minimise impacts. A bigger risk in my opinion,is that TCS has relied on increasing headcount to increase its revenues by way of more billable resources.Current employee expenses is 56% of revenue (Source:Annual Report FY12).But as offshoring gains maturity and more higher end work gets addressed, TCS should start looking at getting more revenues irrespective of employee count by ways of innovative solutions and products ,as adding more and more employees to generate profits is not a sustainable method in the long run.

P.S.: I don’t count currency risk as a major one for TCS, as the company earns its revenue in a variety of currencies and also incurs its expenses in a variety of currencies. Also, it follows hedging and other financial strategies to combat currency volatility, so currency appreciation and depreciation gets evened out in the longer run. All the above risks are faced by other Indian IT service companies as well and are not specific to TCS.

Now we come to the tricky part. As many investing gurus have pointed out, equity valuation forecasting is more art than science. We have established that TCS is a good business, with sound financials, an impressive track record and a reasonable visibility of earnings and revenues for at least the next 10-15 years. Now let’s look at the price we would like to pay for TCS’s stock.

As far as possible, I like to use simple methods and inputs for forecasting prices, because as complexity rises, chances of error increases. The three methods I have used to value TCS are DCF, EPS Growth Valuation and PE growth valuation.

DCF Valuation: The assumptions I’ve making here are 12% growth for the first 5 years and 8% growth for the next 5. The 3 year median FCF is Rs 50 billion. No. of shares outstanding is 1,957 million. Net debt is negative Rs 57 billion. Terminal growth rate is kept at 0% (ultra-conservative) and discount rate is 12%. Based on these inputs, the intrinsic value comes to Rs 449.

EPS Growth Valuation: The 5-year median EPS growth rate for TCS is 25.6%. Assuming a very conservative rate of earnings growth, I have assumed growth rate as half for the last 5-year number, or around 13%. I have used this rate to forecast EPS 10 years from now.

Current 3-year median EPS is Rs 53 .Forecasting 10 years into the future, I get a estimated EPS of Rs 177. Taking a 10-year median P/E ratio of 25x, I get a 10-year price estimate of Rs 4,425. At the current price of Rs 1,538, this translates into an average annual return of around 11%. If I take dividends into account, again at a conservative rate of Rs 10 per share, total returns would come to Rs 4,525, or an average annual return of around 11.3%.

PE Ratio Valuation: Taking a 3-year median EPS of Rs 53 and a 10-year median P/E of 25, we get an intrinsic value of Rs 1,325 per share.

Based on these three valuations and taking a margin of safety of 30%, I get a comfortable buying price of Rs 1,100 per share for TCS.

Now what?
Do these valuations take into account the very serious risks that face TCS today? I would say the Immigration Bill in US and the move of the IT world from the low cost hub that is India, are potential game changers.

I’m not saying that TCS’s management is not cognizant of these risks and not taking strategies to combat these issues, but I do not believe that the market is factoring these risks into TCS’s current valuations. There exists a substantial downside to TCS’s market valuation, which only is factoring in the positive news of the rupee depreciation.

So logic compels me to wait until there is a much more sensible price level for a good company such as TCS. My study of the IT sector compels me to believe that TCS is the strongest bet among large Indian IT companies. When the market wakes up to the risks TCS is facing, that’s when we should swoop down and buy this business.

In the words of Howard Marks – “No asset is so good so as to give any price for it and no asset is so bad as that it can’t give a profit when purchased at the right price.”

Happy investing!

Disclaimer: Readers are advised to do their own independent assessment before taking any decision. You can expect some errors or forward looking statements, so do your own research as well.

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.


  1. Thank for this lucid analysis.
    Understanding IT companies, for me, for some reason has been a bit of a puzzle given the sheer size of the turnover, profits, no. of people employed and the terms used in the annual report plus the fact that I cannot see their (physical) product.
    I read somewhere that every 4th working person in the world is an Indian most likely in this decade and few more decades. This means if this labour force is skilled we may be able to encash this opportunity, if we get our basics right. Plus given the sheer dependence on IT in every aspect of our lives hopefully there should be enough business to keep the vast nos. in the IT industry employed productively.
    So from the demand perspective I think there is lot of work overseas as well as in India and cos. like TCS are well poised to exploit it.
    People being the raw material, need to be handled well, which also I understand TCS does a decent job of.
    All in all seems a good buy (at a price), what Mr Lynch calls a stalwart.

  2. Bhushan says:

    Excellent analysis and I must say that it has covered everything that one needs to know while anlyzing TCS. As mentioned in the article, hurdles being put by governments across the globe is going to be the single biggest challenge for TCS and other IT companies. It is not just USA, other countries like Australia, UK and Canada have also put restriction on immigration recently. It will be interesting to see what happens now.
    All companies have to have a strong IT infrastructure and also have to reduce cost. So, this may force them to move most of their IT setup itsef to India to bypass the immigration hurdles. If that happens, it will be good for Indian IT companies. Microsoft, Cisco and GE already are doing it and will most likely move in big way going forward.

  3. Aravind says:

    Hi Nishant,

    Thanks for your succinct analysis. Being an IT professional, I can offer some more insights and few misuse of the parameters used.
    Please correct me, if I’m wrong.

    1. Onsite-offshore mix :
    The company receives payment in dollars but pays the off-shore employees in rupees, thus formulating the offshore arbitrage model.
    A company having more onsite employees pay them more in dollars, but they also charge much more for their services.
    Thus, even if they have to make to do with a smaller pie, the pie itself is large.
    So a company always plan to have a healthy mix of onsite-offsite employees. The cost leverage is maintained thus.

    2. Fixed Price Vs Time & Material contracts:
    For both, the no. of employees to work on a project needs to be approved by the client and not left to the company’s discretion (though there might be some freedom due to the trust established).
    The difference is between the 2 contracts depends on the hours worked. They both have their pros and cons.

    For fixed price contracts, a client pays the agreed billing rate but the workload will be much more (> 8 hrs a day).
    So the service provider is at a disadvantage as more effort doesn’t get translated to money.

    For time & material contracts, the company can charge more if the effort is more.
    For further references:

    2. Risks:
    I totally agree with you on the risk faced by TCS on placing little emphasis on innovation.

    I have a doubt with the below statement.
    As per the FY12 annual report, around 50% of TCS’s revenues comes from North America, posing a significant impact from the visa issue. The recent backlash in Canada and Australia over the visa programs for technology workers is also a case in point (TCS is involved in both these cases).

    But that is the case for almost all IT companies. TCS’s client mix looks even better compared to others. Besides, it just talks about the geography of clients and not onshore workforce. More pertinent is the revenue ratio of onshore to offshore workforce. The visa issue is overplayed and though it may impact margins, it is not unmanageable. It may even be a positive as following the rules and hiring locals more may bring them into contention of lucrative Federal IT projects.

    3. Moat:
    Also IT companies derive their moat from quality of execution, TAT and process adherence. TCS has sufficient moat among niche clients who expect highest standards(e.g. BFSI and FMCG verticals). They are ready to bear premium billing rates. Conversely, clients who are primarily looking at cost reduction will look at cheaper vendors.

    All in all, moving up the value cycle and creating expertise in product verticals seems to be the key.
    Please let me know your thoughts.

    • Nishanth says:


      For your points

      2)For fixed price contracts , employees bear the brunt and not TCS :).For time and material contracts , they cant charge more than 8 hours per day, time is fixed for 6 months or a year or even extended for 3 more months, but billing per day stays at 8 hours per day.

      3)Risks:If you read my statement , I have mentioned that all risks outlined are applicable for all the IT service companies.TCS is the best placed among them , due to geographical diversification.

      3)Moat – From my experience in working in the IT field , I have seen usually that TCS has bid the lowest among all the companies and hence they usually get the projects. I havent seen marked difference in quality of execution and process adherence between Infy,Wipro and TCS.

      PS: I too work in an IT service company:)

      • Nishant,

        Thanks for your reply.
        2. For fixed price contracts , employees bear the brunt and not TCS.
        That indirectly affects TCS as the employee morale is pretty important. Also we know how the saying goes. ‘The govt. company in IT sector is TCS. They don’t tax or pile work load on employees so much as others.’ Yes, they can’t charge more than 8 hours per day. But the project itself gets extended as you say, which will bring in more money to the coffers.
        3. Risks: Yes, I read your statement and agree with you totally.
        I was taking issue with this statement.
        “As per the FY12 annual report, around 50% of TCS’s revenues comes from North America, posing a significant impact from the visa issue. The recent backlash in Canada and Australia over the visa programs for technology workers is also a case in point (TCS is involved in both these cases).”
        Isn’t that just the geographical split of revenues i.e. 50% of clients are from US instead of onshore revenues. Onshore to offshore workforce Revenue ratio, particularly US onshore to offshore revenue ratio is more relevant here right? Shouldn’t we be considering that instead of the make up of the geographical profile of clients?
        3. Yes, true. I was talking more about the competition from mid and small size IT companies. Besides, many of the big peers have fallen/falling to the wayside :). Perhaps we should include CTS and HCL instead of Infy and WIPRO for the medium term :).

  4. Jana Vembunarayanan says:

    Hi Nishanth,

    Thanks for the detailed post!
    What makes TCS to generate an ROIC of 61.9% while Infosys is not able to do the same?


    • srinivas says:

      Utlization Rate/Billability: In the IT sector, utilization rate means no of persons billable.
      TCS has the high utilization compare to Infosys, which is causing to increase the Profit Margin.
      TCS Fiscal 2013 Fiscal 2012
      Including trainees 72.30% 74.40%
      Excluding trainees 81.60% 82.20%

      Including trainees 69.00% 69.6
      Excluding trainees 72.6 76.9

    • Nishanth says:


      Good question.It is mainly how they pull the various profitability levers ( onsite-offshore ratio , no of people on bench, expense management etc.)

      A track record of highest ROIC over 10 years indicates very good financial management.

  5. Here are my two cents in relation to IT industry risks…


    * I’m talking about IT service companies like TCS and Infosys. Not Indian IT sector or MNC’s in India.
    * In fact I believe the IT sector has a bright future in India with more and more MNC’s directly opening their shops domestically.
    * I might be biased on my opinion or might be thinking in a narrow way. One can debate this to come to conclusion.

    On Technology:

    * The “software as a service” model is taking off the shelves in a big way in US. Instead of million companies building the same components again and again, they are opting for SOS with pay by year subscription that would cut down development cost, maintenance cost and enhancement costs in big way. Our service companies are employing lot of labor in these areas, when the labor is cut, their margins would erode over time.

    * The previous version of software process was complex. Therefore our service companies had lot of managers who managed their teams. Also the old model was like “don’t reveal your secrets”, but with new open source platforms, I can see the process itself is straightforward and will cut down this part of labor and their margins. There will be a group of technical teams with one or two level hierarchy.

    * Every client of TCS or other companies only outsourced their non-secret, non-proprietary tasks and kept their important things in house. When these open source and “software a service” gets more popular, those service operations will opt for that platform.

    * For example, initially every bank had their own software, later they standardize it. here the credit unions all have same platforms inside different themed websites.

    * Think about PC sales, they are declining… the mobiles require simple coding, and management. More than that, they don’t need these many teams to build vast products which might not be even used. They can build as the demand arises or can even go and buy the small teams that have readily built it.

    * Earlier the industry had to build the software and release it in structured way. They required lot of testers, developers, designers. With internet a lot if changing, you can develop on the go, fix code on the go.

    * Better software process/tools and techniques are really increasing the productivity. If a team was taking ‘x’ hours to build a product earlier, it now takes only ‘x/2’ hours. That’s a major change. I feel our service companies have been sitting comfortably for a long time with not increasing the productivity, the cheap labor in comparison to developed countries so far might have allowed them to fill that gap. With declared youth unemployment of 40% in Spain, that might not be case anymore.

    * Our companies have built less product brands like “Oracle” or “SAP”. They can build it now, but now everything is online, it needs less resource to build it, and it can be built from anywhere, the factor is productivity. Again I am not arguing that our people are less productive, but there are too many structures in IT service company that blocks it.

    On Macro:

    * The wage advantage that India had is no more. One chart even said, when we see the rupee devaluation in terms of dollar, adjusted to inflation in US and India, rupee actually gained 6% even at INR 60 to $1.

    * The purchasing power in developed countries are gone or even lesser than in India. Therefore the IT expenditure will go low.

    * The smart phones are even going to take away the “helpdesk” “call center” tasks. With mobile app, the company can understand the behavior of their customer in a big way and update their app to get less customer queries over time.

    * I believe a lot of clean up has to take place before seeing growth back.


    * Big domestic story is still in front of them. Think about who would get these large govt. contracts… TCS, Infosys, HCL, Satyam and IBM
    (Even in this, there are many companies to fight for that pie which itself might be small when compared to contracts of Fortune 500 that comes in dollars and pounds. Also One the Govt. had to start the reform to start with. Second, Mahindra’s, Tata’s will also user their own IT companies to execute their companies projects.)

    * Domestic stories might support these companies during currency devaluation.

  6. Are there any resources where we can study where the Indian IT story is headed.

  7. May be “disruption” is the right word. We have to wait to see how companies comes out of it. I don’t want to speculate and divert the topic from analysis to IT internals, who knows my points are already factored in the stock price by the market.

    If you are an optimist, you have to think that these are the same IT companies that came to this level from no where in 1990’s. You just need a bold management and right leadership.

    Personally I feel our companies reward system is inefficient, salary is not the only motivation. One has to reward failures in the same way they reward the success provided it’s a failure after hard work. “Taking no risk is the biggest risk of all.

    They can dedicate a pool of resources to innovate cost effective solutions for our population… any system that genuinely helps people can take off in a big way. Though there are many bottlenecks, if thought through, it can be broken.

    With right motivation and leadership, the young India can do wonders.

  8. Akhilesh Pathak says:

    Dear Nishanth,

    Indeed a deatiled analysis. Excellent work. Can’t comment coz of conflict of interest.

    Although, I can vouch for one thing (from my own personal experience) that TCS is a great employer 🙂

    Warm regards


  9. Hi Nishant…currently, as of 17.7.2013, TCS price is Rs.1650, which is much higher than the buying price you recommend…..and I am not sure it will come down given the fall of the rupee……as somebody who wants to get into TCS……I dont know what to do.

    • Dear Raghav, it would be nice to know why you want to get into TCS. Regards.

      • Vishal, there is no exposure to IT in my portfolio, so I was looking to get into either TCS or HCL……but if you have read the tweet I sent to you today morning, when you asked people about the max loss they have faced…..3 weeks back I bought 550 ONGC @345, and now it is struggling at 300….. so I am suddenly very particular about entering at the right level. My choice is 50% TCS / HCL plus 50% in ITC……could you give me your estimation of what would be a correct entry point for these companies ? I am a buy and forget type long term investor……..

        • Nishanth says:


          You bought ONGC @ 345 .. May I know on what basis you bought at this level.Below , you have mentioned that there was nobody to advise you , hence curious. What if you are advised to enter into TCS @ 1650 and it falls to 900 levels..would you feel that was a mistake?

          Say Vishal gives an estimated value for your stock picks , you buy them and prices falls 30% after that , you are unable to contact Vishal.What will you do in such a case ? Best approach is to learn for ourselves , how to go about building an equity portfolio and if we are unable to do so , then outsource it to mutual funds.

          Would you buy clothes , groceries , electronics items etc, when they are on sale or marked up by 50%? .If your answer is “I would like to buy at a discount” , then why do you apply the opposite behavior to your stock purchasing methods? A stock is nothing but a tiny portion of a business, and as owner of that business ,you would like to get that portion as cheaply as possible , in order to enhance future returns? Would you willingly pay 50 lakhs for a plot of land when you know the market value is 25 lakhs ? It’s the same principle here. Do your own learning (This website is an excellent resource) , do your own research , apply your own logic , and then decide to buy or not.Whatever valuations I have given above are at a conservative level. If you apply aggressive inputs , you can reach closer to the desired price level.But what if the company doesn’t perform as expected? What if business is impacted ? What do you do then ? Sell ? Hold ? Buy More?

          If you still want to buy TCS @ current price levels, please go ahead and do so. BUT, do understand this: Whether you buy on your own conviction or anybody else’s advise ( Stock Broker , Friends, Relatives , Colleagues, Vishal ,God), the responsibility is yours alone , the risk is yours alone , the profits are yours alone , the losses are yours alone.

          Best of luck.

          • True…I am actually a very naive guy when it comes to investing…go by reputation of the company, forget the price, go by news flow……it was worked for me in case of RIL, L&T, Hul, Ultratech, ADAG companies (which are now doing well)…..also I bought and sold Idea for a nice profit….so I thought I was doing great, and my method was correct………but now I think I will have to do some real learning..

  10. Vishal, thing is, my funds as limited but my desire for good quality stocks is too high………stocks that I can hold for years and years…..I have about 2 lakhs which I can invest right now……I was thinking, TCS/HCL plus ITC ….and maybe SBI Pharma mutual fund as I cannot take the risk of betting on a single pharma company…….there is nobody to advise me as I dont know anybody who is good at stock market investments….so I was wondering if you could give me some advise on this.

    • Hi Raghav,

      1. Avoid any sector fund – very risky, as the fund manager has to remain invested whether the sector is doing well or not and despite its future.
      2. It’s good to search for quality businesses, but when you are starting out, don’t be rigid on a sector or a set of companies. Instead, learn as much as possible across businesses before making any investment. Like, if you want to invest in pharma, first learn how a pharma business is run.
      3. Have you done some homework on TCS, HCL, ITC etc? If not, why are you “thinking” to buy them?

      Hope this helps. 🙂

  11. Excellent Analysis .

    I don’t work in IT . maybe someone can tell us the salaries of diff. Levels of TCS employees ..say fresher’s to senior levels, both onsite and offshore.

    Not each and every salary , but just a general gist of salaries.

  12. If you think that TCS wins contracts solely on the pricing, you are very much mistaken.

  13. Haraneesh Reddy says:

    Vishal , This link throws a page not found error. Perhaps you may want to fix it.


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