High ROE and ROCE Tech Giant Expands Real Estate Portfolio with Rs 2,250 Crore Deal; Acquires Darshita Southern India Happy Homes

With a PE ratio of 26.4x, the company trades at a discount compared to the industry PE of 28.2x. The company has ROCE of 64.3 per cent and ROE of 51.5 per cent.  

Tata Consultancy Services Limited (TCS) has disclosed a significant acquisition in its latest board meeting. The company has announced the acquisition of Darshita Southern India Happy Homes Private Limited, a commercial real estate entity. The acquisition involves a cash consideration of Rs 2,250 crore for 100 per cent equity shares, with a call option to complete the acquisition within two years. This acquisition aims to secure land and building assets to serve as a delivery centre, aligning with TCS's strategic expansion plans. Darshita Southern India Happy Homes Private Limited, incorporated in September 2004, is currently developing a commercial property intended for lease to industrial consumers, though it has not yet commenced revenue generation.

Tata Consultancy Services Limited (TCS) is a leading global IT services, consulting, and business solutions organisation. As of the latest data, TCS's stock is priced at Rs 3,565 with a market capitalisation of approximately Rs 12,89,830 crore. Over the past year, the stock has experienced a decline, delivering a return of -13.26 per cent. The company's 52-week high stands at Rs 4,585.9, while the low is Rs 3,457.35.  Despite recent stock performance challenges, TCS remains a key player in the IT industry, known for its robust service offerings and global reach. The company has been maintaining a healthy dividend payout of 66.1 per cent.

In the Quarterly Results of December 2024, revenue stood at Rs 63,973 crore, compared to Rs 64,259 crore in September 2024 and Rs 60,583 crore in December 2023, reflecting a growth of 5.60 per cent YoY and a decline of 0.45 per cent QoQ. Net profit for the quarter was Rs 12,380 crore, up from Rs 11,909 crore in September 2024 and Rs 11,058 crore in December 2023, registering an increase of 11.96 per cent YoY and 3.95 per cent QoQ. The net profit margin was 19.35 per cent, higher than 18.53 per cent in September 2024 and 18.25 per cent in December 2023.

For the financial year 2024, revenue reached Rs 2,40,893 crore, rising from Rs 2,25,458 crore in FY23, showing a growth of 6.85 per cent. Net profit for FY24 was Rs 48,763 crore, increasing from Rs 42,635 crore in FY23, reflecting a growth of 9.73 per cent. The net profit margin for FY24 stood at 17.70 per cent, compared to 17.23 per cent in the previous financial year.

As of December 2024, the shareholding pattern is as follows: Promoters hold 71.77 per cent, FIIs hold 12.68 per cent, DIIs hold 10.86 per cent, the Government holds 0.06 per cent, and the Public holds 4.63 per cent. There is no significant change in shareholding compared to the previous quarter.

With a PE ratio of 26.4x, the company trades at a discount compared to the industry PE of 28.2x. The company has ROCE of 64.3 per cent and ROE of 51.5 per cent.  

Investors must keep this Large-Cap stock on their radar.

Disclaimer: The article is for informational purposes only and not investment advice.