FUNDAMENTAL ANALYISIS OF

IT SECTOR
NAME – SURBHI BHANSALI
ROLL NO – O2
T.Y BBA
 INTRODUCTION TO IT SECTOR
 Information technology (it) defined as the design development, implementation and management of computer
– based information system, particularly software applications and computer hardware.
 Information technology is one of the most important industries in the India economy. It has grown to cover the
most aspects of computing and technology.
 The information technology industry has become one of the fastest growing industries in india because of
which it has caught world attention. India is now being identified as powerhouses for incremental development
of computer software.
 The it industry is heavily influenced by factors like the global market and the sustenance of its rate of growth.
The IT industry is one which is not limited to software developments alone. Technology can be applied in
libraries, hospital, banks, shops, prisons, hotels, airports, train, stations and many other places through
database management system, or through custom based software.
 India its core competencies and strength have attracted significantly investments' from major countries. The
computer software and hardware sector in India attracted major countries.
 Spending on information technology in India is expected to reach US$ 90 billon in 2019. revenue from digital

segment is expected to comprise 38 per cent of the forecasted US$ 350 billion industry revenue by 2025.
INTRODUCTION TO COMPANY
THE INTRODUCTION OF FIVE COMPANY ARE AS FOLLOWS:

TATA CONSULTANCY SERVICE (TCS):

 TATA Consultancy Services Limited (TCS) is an Indian multinational information technology(IT) service and consulting

company with headquartered in Mumbai, Maharashtra, India. It is a subsidiary of Tata Group and operates in 149

locations across 46 countries.

 TCS is the largest Indian company by market capitalisation. Tata consultancy services is now placed among the most

valuable IT services brands worldwide. In 2015, TCS was ranked 64th overall in the Forbes World's Most Innovative

Companies ranking, making it both the highest-ranked IT services company and the top Indian company . It is the world's

largest IT services provider. TCS became the first Indian IT company to reach $100 billion
 TCS and its 67 subsidiaries provides a wide range of information technology-related products and services including

application development, business process outsourcing, capacity planning, consulting, enterprise software, hardware sizing,

payment processing, software management and technology education services. The firm's established software products

are TCS Bancs  and TCS Master Craft.

 Tata Consultancy Services has 285 offices across 46 countries and 147 delivery centres in 21 countries. At the same date
TCS had a total of 58 subsidiary companies.
 INTRODUCTION TO COMPANY
INFOSYS WIPRO
 Infosys Limited, is a global multinational  Wipro is also known as Western India Palm
corporation that provides business consulting, Refined Oil Limited, it is an Indian multinational
Information technology and outsourcing services. It corporation that provides information technology,
has its headquarters in Bangalore, Karnataka, India. consulting and business process services. It’s
Infosys is the second-largest Indian IT company headquartered in Bangalore, Karnataka, India.
after Tata Consultancy Services by 2017 revenue  Wipro Limited is a provider of IT services, including
and 596th largest public company in the world based
Systems Integration, Consulting, Information
on revenue. On March 29, 2019, its market
Systems outsourcing, IT-enabled services, and
capitalisation was $46.52 billion.
R&D services. Wipro entered into the technology
 Infosys provides software development, maintenance
business in 1981 and has over 160,000 employees
and independent validation services to companies in
and clients across 110 countries. IT revenues were
finance, insurance, manufacturing and other
at $7.1 billion for the year ended 31 March 2015,
domains. Infosys has 82 sales and marketing offices
with a repeat business ratio of over 95%.
and 123 development centres across the world with
 In 2018, Wipro received ATD's Best of the BEST
major presence in India, United States, China,
Award.
Australia, Japan, Middle East and Europe.
 INTRODUCTION TO COMPANY
HINDUSTAN COMPUTERS LIMITED(HCL)
TECH MAHINDRA
 HCL Technologies Limited, is

an Indian multinational information
 Tech Mahindra Limited is an

technology (IT) service and consulting company Indian multinational subsidiary of the Mahindra

headquartered in Noida , Uttar Pradesh. It is a subsidiary Group, providing information technology (IT) services

of HCL Enterprise.  and business process outsourcing(BPO) to

 The Founder of HCL technogies was Shiv Nadar. companies in various vertical and horizontal

 It operates across sectors including defence, automotive, markets. Anand Mahindra is the Chairman of Tech

banking, capital markets, chemical and process Mahindra, which is headquartered at Pune and has

industries, energy and utilities, healthcare, hi-tech, its registered office in Mumbai.
industrial manufacturing, mining and natural resources,  Mahindra & Mahindra started joint venture with British
oil and gas, retail, telecom, and travel, transportation, & Telecom in 1986 as a technology outsourcing
hospitality.
firm. British Telecom initially had around 30 percent
 HCL Technologies operate in 44 countries, including its stake in the Tech Mahindra company. 
headquarters in Noida, India. It has establishments in
 Tech Mahindra announced its merger with Mahindra
Australia, China, Hong Kong, India, Indonesia, Israel,
Satyam on March 21, 2012, after the boards of the
Japan, Malaysia, New Zealand, Saudi Arabia, Singapore,
two companies gave their approval, to create a 2.5
South Africa, the United Arab Emirates and Qatar.
billion $ IT Company
 RESEARCH METHODOLOGY
 Research methodology is the way to systematically solve the problem. This focuses on the methodology
and the techniques used for the collection , classification and tabulation of the data.
 Research design is a framework of conducting research of the project. The research design used in this
study is descriptive research design . The purpose of descriptive design is getting an insight over the
issue.
 This study is based on descriptive research study because it is based on secondary data. The secondary
data is been found from various websites, books, research paper etc.
 this study is based on secondary data and it has been analysis from the published annul report of various
IT companies. The data is been collected from the balance sheet and profit and loss statement of selected
companies.
 OBJECTIVE OF THE STUDY:
 To carry out the financial analysis of it sector in order to suggest the investment of the various selected it
companies.
 To study the growth of the IT Sector in order to invest.
 LIMITATIONS:
 Technical analysis is also used for calculating the intrinsic value which is not considered.
 As the data sources are secondary , the data collected cannot be accurate and complete.
 There are also some inherent disadvantages in ratio analysis, which is not considered.
RESEARCH METHODOLOGY
DATA ANALYISIS:
 The project contains secondary data and it is analysis using the statistical tools. The tools used for analysis the
data are:
 Ratio analysis
 ANOVA
 Comparative statement

SCOPE OF FURTHER STUDY:

 By analysis the financial status and other related information of selected companies of it sector of five years,
will help to choose shares that outperform the market and provided consistent gain to the investor.
 This study makes an attempt to provide the necessary information to the data.
 This study covers the five years of the data.

JUSTIFICATION OF TITLE:
 Financial analysis of it sector helps us to understand the position in the market as the IT sector is in growing
trend in current market and has the possibility to grow in the future in it sector.
 It is the sector of the technology which is developing in the many countries. In today’s era, everything is
done through technology, so there is the possibility for the growth in this sector.
 FINDINGS AND ANALYISIS
 Ratio analysis is done for all the companies for the last five years. In this 13 ratio has been analysis for all the
companies.
 Firstly, By considering the average of current ratio , the financial services has more assets to pay off the short term
and long term which is followed by INFOSYS and HCL . The current ratio of the various companies is significantly
different years .
 In the quick ratio, the Infosys has the capability to meet the short term financial requirement. Wipro, TCS, tech
Mahindra has also ability to pay the short term financial requirement. The quick ratio of five companies does not have
significant difference in their ratio as they are equal in any terms.
 In operating profit margin, in this HCL and TCS has the efficiency in controlling the cost and expenses associated with
business operations. The operating profit among the different companies does not differ significantly.
 In gross profit margin, HCL and TCS have the ability of proportion of the revenues after the cost of goods sold. The
gross profit does not differ with the different companies.
 In net profit margin the remaining income is calculated after deducting operation expenses, interest, taxes and
dividend. The companies like HCL and TCS have more net profit margin as compared to other companies which is
financial sounded company. The net profit margin of various companies does not have any significant difference
among them.
 Infosys and HCL Company do not have debt. They may possess the all equity firm. Wipro have the long term financial
soundness. The debt to equity posses that the total equity, how much debt is there. The debt to equity has not any
significant difference among various years.
 The return on capital employed i9ndicates how effectively a firm generates revenues from capital employed. TCS
can effectively generate capital from it, whereas Infosys cannot take into consideration. There is no significant
difference in ratio of different company.
 The return on net or return on equity of various companies does not differ significantly. The TCS and HCL have
high return on equity in compare to other companies. They have the capability to make the high return on money
invested by the shareholders.
 TCS, tech Mahindra and HCL have high Interest coverage ratio which indicates that they have the ability to pay the
interest and the outstanding debt. The interest coverage ratio of various companies may differ significantly.
 The assets turnover ratio among different companies does not differ significantly. TCS and WIPRO have high
assets turnover ratio which indicates how much revenue is generated by using the assets of the company.
 The high EPS indicates the profitability of the company . The companies like Infosys and TCS have high EPS
among the different years.
 The p/e ratio indicates valuing a company that measures its current share price relative to it’s per share earnings.
 TCS shows the increasing trend in profit after interest and taxes which indicates the high growth of the firm. The
company is overall good from the paying of interest, generating more return on the shareholders money, to pay off
the liabilities, high profitability to generate more return etc.
 Infosys may be the all equity firm has the high return on equity and also it shows that the same or decreasing trend
in the profit. But the firm has maintained the profit.
 Wipro has the ability to pay the short term requirement and the long term obligations and also have the financial
soundness of the company. As the Infosys, Wipro also have the same trend in the profit.
 HCL is also overall good firm as it is efficiently in controlling cost, ability to meet short term obligations, generates
revenues from the assets, high profitability, etc. It has the high trend of increasing profit and performing well from
the previous years.
CONCLUSION:
•Here by it is concluded from the financial results, ANOVA and ratio analysis that the companies like TCS and HCL
has better performance than the other companies.
•The investor should invest their money in these companies in order to make the high return out of it.
•From the above findings, HCL, TCS, Infosys are showing the beast liquidity, efficiently, profitability position and
the best option available to investor to make their investment decision in the it industry.

SUGGESTIONS:
•Apart from this analysis the investor should analysis the market by the other methods also.
•The market functions vary from the demand and supply of the shares, and so sometime it is not possible to predict
accurately.
•While investing the investor has to take the other factors into the consideration.
THANK YOU