TCS and Infosys comparison

 

Tata Consultancy Services (TCS) and Infosys are two of the largest IT service companies in India. Both companies have a significant global presence and offer a wide range of services to clients across various industries. In this article, we will compare TCS and Infosys based on various parameters.

History and Background

·         TCS was founded in 1968 and is headquartered in Mumbai, India. It is a subsidiary of the Tata Group, which is one of the largest business conglomerates in India. TCS started as a division of the Tata Group, providing computer services to other group companies. However, over the years, it has grown to become one of the largest IT service providers in the world.

·         Infosys was founded in 1981 by a group of six engineers, including N.R. Narayana Murthy. It is headquartered in Bangalore, India, and is known for its focus on innovation and technology. Infosys has grown rapidly over the years and has become one of the largest IT service companies in India.

Revenue and Market Cap

·         TCS is the largest IT service company in India and has a market cap of over $100 billion. In the fiscal year 2021, TCS reported a revenue of $22.2 billion, which was a 4.6% increase from the previous year.

Infosys, on the other hand, has a market cap of around $90 billion. In the fiscal year 2021, Infosys reported a revenue of $14.6 billion, which was a 10.7% increase from the previous year.

 

Employee Strength

·         TCS is the largest employer in the Indian IT industry, with over 500,000 employees. It has a presence in over 46 countries and has been consistently ranked among the top employers in the world.

Infosys has around 300,000 employees and has a presence in over 50 countries. The company has been recognized as one of the best employers in the world and has won several awards for its employee-friendly policies.

 

Service Offerings

Both TCS and Infosys offer a wide range of services to clients across various industries. Some of the common services offered by both companies include:

a.       Application development and maintenance

b.       Consulting and advisory services

c.       Digital transformation services

d.       Enterprise solutions

e.       Infrastructure management services

f.        Quality assurance and testing

g.       System integration

 

Global Presence

·         TCS has a strong global presence, with operations in over 46 countries. It has delivery centers in several countries, including the United States, the United Kingdom, Canada, and Australia. TCS has been recognized as one of the largest IT service providers in the world and has won several awards for its global operations.

·         Infosys also has a strong global presence, with operations in over 50 countries. It has delivery centers in several countries, including the United States, Europe, and Asia-Pacific. Infosys has been recognized as one of the fastest-growing IT service companies in the world and has won several awards for its global operations.

 

Innovation and Technology

·         Both TCS and Infosys have a strong focus on innovation and technology. TCS has invested heavily in research and development and has set up innovation labs in several countries. It has also partnered with several universities and research institutions to drive innovation in various fields.

Infosys has also made significant investments in innovation and technology. It has set up innovation centers in several countries and has partnered with several startups to drive innovation in various fields. Infosys has also been recognized for its focus on innovation and has won several awards for its efforts in this area.

 

Financial Performance

·         Revenue Growth:

TCS has consistently outperformed Infosys in terms of revenue growth over the past five years. TCS recorded a revenue growth of 8.6% in 2019-20, which was higher than the industry average of 7.7%. In contrast, Infosys recorded a revenue growth of 9% in the same period, which was slightly lower than the industry average. However, both companies experienced a decline in revenue growth in 2020-21 due to the COVID-19 pandemic. TCS recorded a revenue growth of 4.6%, while Infosys recorded a growth of 2.3%.

 

·         Profitability:

TCS has consistently maintained higher profitability margins compared to Infosys over the past five years. TCS recorded a net profit margin of 20.6% in 2019-20, which was higher than the industry average of 17.2%. In contrast, Infosys recorded a net profit margin of 18.5% in the same period. TCS has consistently maintained a higher operating profit margin compared to Infosys as well. In 2019-20, TCS recorded an operating profit margin of 25.1%, which was higher than the industry average of 21.8%. In contrast, Infosys recorded an operating profit margin of 22.8% in the same period.

·         Key Financial Ratios:

Return on Equity (ROE) is an important financial ratio that measures how much profit a company generates for every dollar of shareholder equity. TCS has consistently maintained a higher ROE compared to Infosys over the past five years. In 2019-20, TCS recorded an ROE of 35.6%, which was higher than the industry average of 24.3%. In contrast, Infosys recorded an ROE of 25.7% in the same period.

Return on Assets (ROA) is another important financial ratio that measures how much profit a company generates for every dollar of assets. TCS has consistently maintained a higher ROA compared to Infosys over the past five years. In 2019-20, TCS recorded an ROA of 24.2%, which was higher than the industry average of 17.4%. In contrast, Infosys recorded an ROA of 17.6% in the same period.

Debt to Equity ratio is a financial ratio that measures the proportion of a company's debt to its equity. A lower debt to equity ratio indicates that a company has a lower level of debt and is therefore less risky. TCS has consistently maintained a lower debt to equity ratio compared to Infosys over the past five years. In 2019-20, TCS recorded a debt to equity ratio of 0.3, which was lower than the industry average of 0.5. In contrast, Infosys recorded a debt to equity ratio of 0.4 in the same period.