Final_three Company Analysis

Introduction: HCL HCL is a leading global Technology and IT Enterprise with annual revenues of US$ 5 billion. The HCL Enterprise comprises two companies listed in India, HCL Technologies (www.hcltech.com)

and

HCL

Info

systems

(www.hclinfosystems.in)

Fueled by the entrepreneurial zeal of its founders HCL developed. The 3 decade old enterprise, founded in 1976, is one of India's original IT garage start ups. Its range of offerings span R&D and Technology Services, Enterprise and Applications Consulting, Remote Infrastructure Management, BPO services, IT Hardware, Systems Integration and Distribution of Technology and Telecom products in India. The HCL team comprises 60,000 professionals of diverse nationalities, operating across 23 countries including 500 points of presence in India. HCL has global partnerships with several leading Fortune 1000 firms, including several IT and Technology majors. In 2006, HCL Technologies was ranked #1 among the "Best Performing IT Services Firms" in India while the company's Infrastructure Services Division was awarded the #2 rank worldwide. These rankings were awarded on the basis of a survey - Global Services 100 - conducted by Global Services magazine in association with NeoIT, an outsourcing advisory firm. In 2007, it was ranked by The Black Book of Outsourcing as the #1 Infrastructure Management Services Outsourcing vendor in the world', ahead of vendors such as IBM, Accenture and EDS. HCL was also mentioned as the only India based vendor in the Top 10 in these rankings. The company's innovative HR practices, including its famous "Employee First" policy, have been the subject of case studies by the Harvard Business School (August 2007) and the London Business School (Spring 2007). In its issue dated November 19, 2007, Business Week recently featured HCL in an article titled "The Employee is Always Right", which talks about HCL's "Employee First" policy. In 2008, the company won the 2008 Optimas Award for Innovation. In 2009, HCL was one of the 5 short listed companies for the Readers' Award of the FT Arcelor Mittal Boldness in Business Awards and was also awarded "The No. 1 Employer in India 2009" by Hewitt Associates in partnership with Outlook Business. In 2009, HCL was ranked by the Black Book of Outsourcing as the world's Number One outsourcing firm, ahead of other global players such as IBM and accenture.

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Business Analysis of HCL: HCL Technologies, headquartered in Noida, a suburb of Delhi, is one of the leading global IT Services companies, led by Mr Vineet Nayar. HCL Technologies, along with its subsidiaries, had consolidated revenues of US$ 2.0 billion (Rs. 9,842 crores), as on 31st March 2009 and employed 54,026 professionals. The company has an extensive global offshore infrastructure and network of offices in 20 countries spanning across all geographies. HCL works with global / Fortune 1000 clients in the areas that impact and redefine the core of their business. The company offers integrated portfolio of services including software-led IT solutions, remote infrastructure management, Engineering and R&D Services and BPO. HCL’s key serves include – Custom Application Services Enterprise Application Services Enterprise Transformation Services Engineering and R&D Services Infrastructure Management Business Processing Outsourcing. In addition to this, HCL AXON, formed after the acquisition of Axon Group plc in December 2008, offers full SAP lifecycle services including Business Consulting, Solutions Implementation, Application Management, Blue ocean upgrades and Integration Services. HCL AXON is the largest SAP only Global Partner in the world. The company acquired Capital stream, a US product company was for US$40 million in February 2008. Capital stream’s Finance Center product is an addition to HCL's current product addressing the BFSI market - Penstock, the product that HCL launched in 2007. The company acquired Liberate Financial Services Ltd. on 2nd Sep 2008, Liberate confirmed the sale of Liberate Financial Services Ltd. (LFS) to HCL for an undisclosed sum, following approval for change of control from the Financial Services Authority. On 15th Dec 2008 it acquired Axon Group, and was renamed HCL Axon, the largest acquisition in the history of the Indian IT industry, surpassing Wipro’s $600-million acquisition of Info crossing in 2007.

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The company's innovative HR practices, including its famous "Employee First" policy, have been the subject of case studies by the Harvard Business School (August 2007) and the London Business School (Spring 2007). In its issue dated November 19, 2007, Business Week recently featured HCL in an article titled "The Employee is Always Right", which talks about HCL's "Employee First" policy. In 2008, the company won the 2008 Optimas Award for Innovation. In 2009, HCL was one of the 5 short listed companies for the Readers' Award of the FT Arcelor Mittal Boldness in Business Awards and was also awarded "The No. 1 Employer in India 2009" by Hewitt Associates in partnership with Outlook Business. Marketing Analysis of HCL: HCL leads the market with a market share of 13.7 per cent, up from 9.2 per cent in 2009," a company release said here. HCL's market share increased from to 16.6 per cent (10.6 per cent) in the fourth quarter of 2008, a growth of 103 per cent, it added. In this period, the company sold 146125 units, 46.4 per cent higher than the nearest MNC competitor. By 2009, the number of companies in HCL was consolidated from five to two - HCL Technologies and HCL Info systems. Shiv's shareholding in NIIT was recognized as personal investment and HCL Comnet became a subsidiary of HCL Technologies. HCL Perot was sold back to partner Perot Systems for $105 million in December 2008. •

Amongst geographies, Europe witnessed accelerated growth

•

Among Service lines, Engineering and R&D services, Custom Applications and Infrastructure Services witnessed significant growth, maintaining HCL ’ s dominant market position

•

Among the verticals, Financial Services, Life Sciences and Media & Entertainment grew the fastest

•

HCL large customers continue to grow significantly

HCL was the first mover in Remote Infrastructure Management (managing data centres and network services out of India) and became leaders in that market space. And now the 3

company is pushing a new offering in the IT outsourcing market where the customer generates major cost savings while retaining control. By offering fl exibility and transparency to the customer, HCL avoids head-on competition with the big players like IBM and EDS (whose approach is to take the entire system off the customer’s hands). Four major deals in recent months, including Dixons, Terradyne and Autodesk, attest to the potential in this new market space. The commercial desktops category witnessed a 14% year-on-year growth* with HCL maintaining the top rank in terms of unit shipments, followed by HP and Lenovo. Apart from large enterprises, the Small and Medium Business segment also contributed to a significant portion of shipments in the category. The growth is attributed to Rs.250 crores worth of large orders bagged by the company in the commercial space. One of HCL’s distinct advantages that has been responsible for the successful, timely implementation and rollout of services is the massive service and support network of HCL, spread across the country. HCL Info systems have a committed Pan India Direct Support Infrastructure of 2800 engineers operating across 300 cities and towns in the country. Financial Analysis of HCL: Latest Quarterly/Half yearly As On(Months)

31-Mar-2009(3)

31-Mar-2008(3)

% Change

29815.90

29743.60

0.24

Other Income

22.80

52.20

-56.32

Total Income

29838.70

29795.80

0.14

Total Expenses

28693.30

28545.80

0.52

1145.40

1250

-8.37

121.10

106.40

13.82

44.10

43.90

0.46

Extraordinary Items

0.00

0.00

--

Prior Period Adjustments

0.00

0.00

--

Provision for Tax

313.50

319.80

-1.97

After Tax Profit

666.70

823.80

-19.07

Equity Capital

342.40

342.10

0.09

0.00

0.00

--

Sales of Products/Services

OPBDIT Interest Depreciation

Reserves

4

•

Consumption of Raw Materials = Consumption of Raw Material of Rs. 43877 lacs + Stores & Spare Consumed & others of Rs. 6077 lacs.

•

Other Expenditure = Administration, Selling, repairs and other of Rs. 8249 lacs.

•

The Company on a standalone basis operates in Computer Systems and Telecommunication & Office Automation segments.

Income Statement As on( Months ) Profit / Loss A/C

30-Jun-08(12) Rs mn

30-Jun-07(12) %OI

Rs mn

30-Jun-06(12) %OI

Rs mn

%OI 99.53

Net Sales

124114.40 99.81

116481.20 99.89

22947.00

Operating Income (OI)

124345.00 100.00

116611.90 100.00

23056.20 100.00

OPBDIT

4846.30

3.90

4279.90

3.67

1545.40

6.70

OPBDT

4274.50

3.44

4153.50

3.56

1219.30

5.29

OPBT

4111.00

3.31

4028.00

3.45

1151.80

5.00

233.70

0.19

271.90

0.23

163.40

0.71

56.30

0.05

-22.10

-0.02

-47.30

-0.21

Tax

1353.50

1.09

1099.30

0.94

135.70

0.59

Profit after tax(PAT)

3047.50

2.45

3178.50

2.73

1132.20

4.91

Cash Profit

3211.00

2.58

3304.00

2.83

1199.70

5.20

Dividend-Equity

1368.40

1.10

1353.00

1.16

1346.80

5.84

Non-Operating Income Extraordinary/Prior Period

•

Consumption of Raw Materials= Consumption of Raw Material of Rs. 43951 lacs + Stores ,Spares Consumed and others of Rs. 4474 lacs 2.Other Expenditure= Administration, Selling, Repairs and other expenses of Rs. 7824 lacs + purchases of services (net) of Rs. 7162 lacs

Share Statistics As on

30-Jun-08

30-Jun-07

30-Jun-06

EPS (Rs.)

17.81

18.79

6.71

CFPS (Rs.)

18.76

19.53

7.11

Book Value (Rs.)

58.51

49.75

24.16

8.00

8.00

7.98

DPS (Rs.) Ratio Analysis As on

30-Jun-08

30-Jun-07

30-Jun-06

OPBIT/Prod.cap.empl.(%)

41.62

53.51

32.73

PBIT/Cap. Employed (%)

37.11

41.70

27.16

PAT/Net worth (%)

30.43

37.77

27.77

5

Tax/PBT (%)

30.75

25.70

10.70

Total Debt/Net worth (x)

0.35

0.28

0.48

Long Term Debt/Net worth (x)

0.00

0.03

0.38

PBDIT/Finance Charges (x)

8.98

35.84

5.10

Current Ratio (x)

1.70

1.64

1.82

RM Inventory (days consumption)

3.95

3.85

14.15

FG inventory (days cost of sales)

21.77

20.26

22.69

Receivables (days gross sales)

36.05

30.96

78.36

Creditors (days cost of sales)

43.06

36.88

67.04

Op. curr. assets (days OI)

79.00

67.00

160.00

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Introduction: Infotech Founded in 1991, Infotech is a US $193.4 million (Rs. 889.75 Crores for FY 2008-2009) Global IT services company with over 7000 people specializing in Engineering Services, Geographic Information Systems (GIS), and IT services. We provide services to a wide range of industries - Aerospace, Automotive, Energy, Government, HiTech Consumer & Medical Devices, Marine, Rail, Retail, Telecom and Utilities. Infotech has a distinctive business model: "offshore services, onshore responsibility". It combines extensive software development capability based in India with global delivery through offices in the US, UK, Germany, Australia and the Netherlands that provide local customer interface and project management. We operate from 27 global locations, including 7 development centers and accommodate the largest operations out of India for Engineering Services, Geographic Information Systems (GIS), and IT services. Infotech's cutting edge is our industry specific domain expertise, people and processes, technologies, tools and training. They draw on this strong foundation to create measurable business impact for customers around the world, resulting in long-term relationships with several of the most recognized names in their respective industries. Many of these are among the top Fortune 500 companies. Infotech operates offshore 'Centres of Excellence' for leaders in the aerospace, rail, telecommunications, transportation and government verticals. Infotech is a CMMi level 5 company and is also certified to ISO 9001:2000, AS9100 standards. They are publicly listed and have enjoyed equity participation from several globally reputed investors. Infotech Enterprises Limited contributes 0.5% of its PAT to Infotech Enterprises Charitable Trust (IECT), a Trust formed with the view to implementing its CSR initiatives. IECT would support initiatives to improve quality of education in Schools for underprivileged children in Government schools which lack in basic amenities. Infotech adopted the Government Upper Primary School located in Shamshiguda, Kukatpally to provide quality-learning environment to students.

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Business Analysis of Infotech: Infotech has developed a unique track record in supporting leading Automotive, Aerospace, Energy, Marine, Plant Engineering, Rail and other engineering industries in their product development support and optimizing their development time & processes. Infotech offers a unique combination of engineering skills, domain experience, and application know-how. InfoTech’s expert teams in engineering span the complete product development cycle, from concept development through after market support in the areas of Mechanical Design, Electronics Design, Technical publication and Engineering Software Development. Infotech Enterprises’ mechanical Design services represent more than three decades of knowledge, expertise and project management Skills. The broad range of experiences and knowledge we have provides us with an opportunity to help their customers transform their businesses - and all of these at cost effective prices. Infotech unique approach to market and employees is reflected in their results. The last four quarters have seen a sequential growth of 6% , 9%, 11% and 10% in IT services (Core Software and Infrastructure Services) respectively, making Infotech one of the fastest growing Indian IT companies. This quarter, with a 41% YoY growth in revenues and an EBIT growth of 46%, has been consistent with this trend. The IT services division of Infotech offers a range of quality business software solutions and services to several large and medium customers across the globe. With partnerships with global software giants and skills & expertise on wide variety software platforms including leading edge Internet and e-commerce technologies, Infotech brings to its customers high quality software services and products. Infotech has offered cost effective solutions through its onsite responsibility and offshore development to various customers in the Manufacturing, Finance, Transportation and Retail industries. Since its inception in 1991, Infotech has acquired significant domain expertise related to the industries it serves and provides software services and solutions to several of the most recognizable names in utilities, telecommunications, transportation & logistics, manufacturing, retail financial services and government markets. Having completed over Seven million person hours on Aerospace projects, Infotech has gained 8

extensive domain knowledge in aerospace engineering. Based on this domain expertise, we offer a modular service concept that allows our customers and partners secure the services they need ranging from conceptual to detailed design & analysis. Their Engineers are positioned to effectively serve the Aerospace Industry in areas like Product Design & Development, Embedded Systems, Product Life Cycle Management and IT Solutions. Avionics, a Strategic Business Unit of Infotech provides Full Life Cycle safety/Mission Critical Software solutions for Aerospace with focus on Onboard Software & Hardware Development, Testing & Integration, and Verification & Validation Marketing Analysis of Infotech: Infotech Enterprises Limited to address Geospatial business opportunities are in India and the Middle East by taking majority stake in Hyderabad-based Geospatial Integrated Solutions Pvt Limited. The Infotech’s market in India and Middle East is estimated at Rs. 1000 crore and is expected to see a 12% growth rate over the next five years. The India government’s Open Map Policy and Survey of India’s large-scale mapping initiatives are unlocking geospatial opportunities in several areas. These include land records; urban planning; environment, forestry and natural resources; utility infrastructure planning and management; and defence. Similarly, the rapid pace of infrastructure development in the Middle East has led to a growing demand for geospatial services in that region. Infotech is a world leader in services, particularly for the telecom, utilities and government markets in North America, Europe and Australia. It also enjoys a significant presence in the telecom and utility segments in India. By investing in Geospace Integra and leveraging the combined entity’s strengths, Infotech moves into an even stronger position to address the high-growth geospatial markets in India and the Middle East. Infotech approved the preferential allotment of equity shares to Tele Atlas. The Equity shares would be offered at a 10% premium to the preferential allotment guidelines price of Securities and Exchange Board of India. The number of shares offered would be less than 3% of the current paid up share capital of Infotech Enterprises. This would be

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subject to all regulatory approvals and the approval of the shareholders of Infotech. An Extra ordinary General Meeting of shareholders is being called on April 21, 2009 to place this matter in front of the shareholders. Infotech have seen substantial change in our margins for the current quarter, but these may not be sustainable in the overall period for the complete year. Last year Infotech margins were at 18.1%, as opposed to that they saw about 19.5% for the current quarter. That was largely because of one or two contracts that they had where we could go ahead and put in their mobilization costs which they have gone ahead and did that in the last quarter, but they believe therefore this 19.5% will not be sustainable, but they are fairly sure that they will operate somewhere between 18.5% and 19%. The business is an exciting and new venture for Infotech market as it combines hosting and support, along with the application development making it a fully managed service, the first of its kind to be managed by Infotech from market condition. To successfully provide this service Infotech have partnered with two other global organization, forming relationships that will benefit Infotech both by association and by partnership relations that will enable Infotech to provide similar hosted mapping solutions to the market place. The partners selected to give Infotech the required capacity to deliver the web map service are mapping solutions provider IONIC Software (now owned by Erdas), and global hosting and telecommunications provider, Cable & Wireless. Financial Analysis of Infotech: Enterprises, posted healthy top line growth for financial year 2009, even though the profit growth could not keep pace with revenue growth. Revenue for the year went up a healthy 32 per cent to Rs 889.7 crore, as against Rs 671.4 crore last year. Profit after tax (PAT) too went up 8 per cent to Rs 92.4 crore, compared with Rs.85.5 crore in financial year 2008. The figures, though, failed to beat average market expectations. Infotech Enterprises chairman and managing director BVR Mohan Reddy said the growth last year had been driven by existing verticals such as aerospace, rails and heavy engineering. Operating revenue for the fourth quarter went up 25.4 per cent to Rs 34.9 crore, compared with Rs.187.4 crore during the same period last quarter. But profit after

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tax fell sharply by 28.5 per cent to Rs.18.5 crore, as against Rs.25.9 crore last year, due to the share in profit of the company’s subsidiary, Infotech HAL. Still, the quarterly results came in well above analysts’. “they have improved our operating margins by 230 basis points over the sequential quarter despite the global slowdown and volatile currency markets,” Reddy said. “We have undertaken various cost-control measures on a war-footing and the impact can be clearly seen from the improvement in operating margins.” Going forward, the company expects its margins to be between 19 per cent and 20 per cent. Infotech’s Indian, subsidiaries grew 21.6 per cent, 20.2 per cent and 51.1 per cent respectively during the year. Its associate company in Puerto Rico had a share of 14.1 per cent in the profit. The board of directors also recommended a 30 per cent dividend, which amounts to Rs 1.50 per share of Rs 5 each. IEEL registered revenues of EUR 10 million in FY 2008 as compared to EUR 7.75 million in the previous year. The net profit stood at EUR 1.2 million in FY 2008. Infotech Enterprises has reported a net profit of Rs 6.52 crore for

quarter ended September 30, 2008 as compared to Rs 5.65 crore in second quarter 2008. The total income has increased from Rs 237.90 million in second quarters 2008 to Rs 30.64 crore in second quarter 2002. The subsidiaries have shown marked improvement in performance over the previous quarter. Infotech Indian Subsidiary and have posted positive results. The losses in the Subsidiary have been contained. A very positive trend is expected to emerge in the coming quarters. "They are extremely encouraged by the traction in the Engineering services sector, both in terms of enhanced client interest and resultant pilot projects. They expect these to translate into growth engines for us in the coming quarters. The growth in their GIS division has been arrested. They have picked up significant new businesses and repeat businesses from USA, Europe and India. Their strategic partner for GIS Services in USA – ASI, has demonstrated a turn-around with significant wins.

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Introduction: TCS Tata Consultancy Services started in 1968. Mr. F.C Kohli who is presently the Deputy Chairman was entrusted with the job of steering TCS. The early days marked TCS responsibility in managing the punch card operations of Tisco. The company, which was into management consultancy from day one, soon felt the need to provide solutions to its clients as well. TCS was the first Indian company to make forays into the US market with clients ranging from IBM, American Express, and Sega etc. TCS is presently the top software services firm in Asia. During the Y2K buildup, TCS had setup a Y2Kfactory in Chennai as a short-term strategy. Now, with E-business being the buzzword, the factory is developing solutions for the dotcom industries. Today, about 90 percent of TCS' revenue comes from consulting, while the rest from products. TCS has great training facilities. In addition to training around 5 percent of the revenue is spent upon its R&D centres like the Tata Research Design and Development Centre at Pune, along with a host of other centres at Mumbai and Hyderabad. It benchmarked its quality standing, invested heavily in software engineering practices and built intellectual property-in terms of patents, code and branded products. At the same time, it expanded its relationships with technology partners and organizations, increased linkages with academic institutions and incubated technologies and ideas of people within TCS and outside. TCS has already patented 12 E-Commerce solution product packages and has filed six more applications for patent licenses. Over $25 million were spent on enhancing hardware and software infrastructure. The company now has 72 offices worldwide. As many as seven centres were assessed at SEI CMM Level 5 last year(3.4 mistakes in a million opportunities).These include Chennai, Mumbai, Bangalore, Calcutta, Hyderabad and Lucknow. Several business and R&D relationship with global firms like IBM, General Electric, Unigraphics Solutions have been made. The present CEO of the company is Mr.S.Ramadorai. The company’s strength is about 14,000. TCS was formed in July 1998 to address demand from mid-sized businesses for a cost-effective, user-friendly, and highly flexible financial management package capable of scaling with a growing organisation.

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Business Analysis of TCS: TCS invests about 4 per cent of its annual revenues in training, a shining example of which can be seen at the state-of-the-art training centre in Thiruvananthapuram in the south Indian state of Kerala. Their training modules have been developed to serve the specific needs of individual employees, and are based on their needs at various stages of development in the organisation. Consider our 'induction training program' (ITP), which is for all our recruits from engineering colleges. This is a specially designed, 77-day training course at the Thiruvananthapuram facility. The ITP is conducted with the objective of transforming engineers from diverse disciplines into software professionals. Then there are the 'continuing education programs' (CEPs), which cover over 300 topics and can be delivered over a variety of channels: classrooms, computers, audio / video, contact sessions, seminars, conferences and workshops. Our dedicated training centre in Thiruvananthapuram, established in 1998, sprawls over 58,000 square feet. The centre has 18 classrooms, a library, an auditorium, a conference hall, discussion rooms, and faculty and administrative areas. The facility has about 300 personal computers connected to servers. TCS has 10 other centers in India fully equipped to conduct any type of training programme. Exposure to business excellence and evolving technologies Careers across business and technology areas Being at the forefront of the e-revolution Global exposure - with projects in over 50 countries and 800 clients, many of them Fortune 500 standouts

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World class training and the opportunity to learn continuously An open-door, energetic environment with world-class infrastructure Market Analysis of TCS: The company has 10,000 corporate clients, which generate together more than 50% of its income. Long-distance services provided TCS with R$450mil revenues between. Tata Consultancy Services has tied up with Formula One racing car maker Ferrari to provide information technology services for the development of the teams racing car for the next season, which begins on Sep 6, 2009. Under the multi-million dollar deal, TCS will be providing Infotech solutions and engineering services for the development of the Formula One racing car. Exceptional delivery systems, domain capability in engineering design and ease of business were the factors that worked in favour of TCS, N Chandrashekaran, and executive vice-president, TCS, told Business Standard. Chandrashekharan was involved in negotiations with the Italian company. TCS, The F1 car is based on the most complex and advanced platform in the market, packing research into aerodynamics and engine technology. TCS is delighted that Ferrari has chosen TCS technology and solutions to help it retain its pole position." The deal makes TCS the first Indian company to enter the F1 arena, which boasts of 19 Grand Prix races in 17 countries across four continents with an average 250 million viewers per race. TCS will work on a host of areas, including car electronics, safety, aerodynamics, trouble-shooting, during and in between races. Fiat-owned Ferrari expects to start the next season with an interim version of their F2008 car, which led the Italian team to its sixth successive constructor's title in 2008. Chief designer Rory Byrne said late last month that Ferrari could bring the new car out from the first race of 2008 but was not in a hurry because the team wanted to go deeper into research and design. He expected the new car to make its debut between the third and fifth races. The company was at the forefront in providing software solutions to European clients for the transition to Euro. It also used offshore development methodology to deliver solutions

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to companies in Europe. Speaking on the proposed ADR offering announced earlier, no firm timeframe was decided yet as it was only in August 2008 that TCS had hit the Indian market. The IT firm, which has a presence in 32 countries with 10 development centres, services clients from sectors like banking, financial services, retail, manufacturing, telecommunications and transportation. Financial Analysis of TCS: TCS reported sales of $401.24 billion for the fiscal year ending January of 2009. This represents an increase of 7.1% versus 2008, when the company's sales were $374.53 billion. Sales at TCS have increased during each of the previous five years (and since 2004, sales have increased a total of 57%). Sales of International saw an increase of 8.8% in 2009, from $90.64 billion to $98.65 billion. Most of the company's 2009 sales were in its home market of the United States: in 2009, this region's sales were $302.60 billion, which is equivalent to 75.4% of total sales. In 2009, international sales were up 8.8% to $98.65 billion. TCS currently has 2,100,000 employees. With sales of $401.24 billion, this equates to sales of US$191,069 per employee. The sales per employee levels at the three comparable companies vary greatly, from US$144,352 to US$529,073, as shown in the following table. Some of the variation may be due to the way each of these companies counts employees (and if they count subcontractors, independent contractors, etc). For the 52 weeks ending 5/8/2009, the stock of this company was down 12.3% to $50.14. During the past 13 weeks, the stock has increased 1.0%. During the past 52 weeks, the stock of TCS has outperformed the three comparable companies, which saw losses between 16.2% and 38.7%. During the 12 months ending 1/31/2009, earnings per share totaled $3.34 per share. Thus, the Price / Earnings ratio is 15.01. Earnings per share rose 5.7% in 2009 from 2008. The P/E ratio of 15.0 is lower than the P/E ratios of all three comparable companies, which are currently trading between 15.3 and 136.1 times earnings. This company is currently trading at 0.49 time’s sales. TCS is trading at 3.03 times book value. The company's price to book ratio is higher than that of all three comparable companies, which are trading between 0.74 and 2.43 times book value.

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During the 12 months ending 1/31/2009, TCS paid dividends totaling $0.95 per share. Since the stock is currently trading at $50.14, this implies a dividend yield of 1.9%. This company's dividend yield is higher than the three comparable companies (which are currently paying dividends between 0.0% and 1.5% of the stock price). During the quarter ended 1/31/2009, the company paid dividends of $0.24 per share. TCS has increased its dividend during each of the past 5 calendar years (in 2004, the dividends were $0.36 per share). During the same 12 month period ended 1/31/2009, the Company reported earnings of $3.34 per share. Thus, the company paid 28.4% of its profits as dividends. On the $401.24 billion in sales reported by the company in 2009, the cost of goods sold totaled $299.42 billion, or 74.6% of sales (i.e., the gross profit was 25.4% of sales). This gross profit margin is very slightly better than the company achieved in 2008, when cost of goods sold totaled 74.8% of sales. In 2009, the gross margin was the highest of the previous five years (and in 2005 was as low as 24.5%). The company's earnings before interest, taxes, depreciation and amortization (EBITDA) were $25.17 billion, or 6.3% of sales. This EBITDA to sales ratio is roughly on par with what the company achieved in 2008, when the EBITDA ratio was 6.4% of sales. In 2009, earnings before extraordinary items at TCS were $13.19 billion, or 3.3% of sales. This profit margin is lower than the level the company achieved in 2008, when the profit margin was 3.4% of sales. Earnings before extraordinary items have grown for each of the past 5 years (and since 2005, earnings before extraordinary items have grown a total of 28%). The company's return on equity in 2009 was 20.4%. This was a decline in performance from the 20.9% return that the company achieved in 2008. (Extraordinary items have been excluded).

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