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Sachin Saini

This document provides a technical and fundamental analysis of Tata Consultancy Services (TCS) for 2015-2016. The technical analysis examines TCS stock charts and indicators such as moving averages, momentum, relative strength index, and identifies signals like a double bottom formation and moving average crossovers that indicate the stock is undervalued and has potential to rise. The fundamental analysis calculates TCS's weighted average cost of capital (WACC) at 24.05% and free cash flow for the firm (FCFF) at $11.86 million, suggesting the company is financially healthy. Based on the overall positive interpretation of both the technical and fundamental analyses, the document recommends buying TCS stock.

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PROJECT REPORT ON TECHNICAL & FUNDAMENTAL ANALYSIS OF TATA CONSULTANCY SERVICES 2015-2016 SUBBMITTED BY: SACHIN SAINI
Technical Analysis The Interpretation of Technical Analysis is based on chats/graph. Which are as follow:- 1. Moving Averages Crossovers MACD 2. Momentum Indicators RSI Relative Strength Index
Line Chat Bearish Double Bottom As we can see after 15th Aug trend become bearish and there was a Double Bottom indication in the trend after bearish trend in between 3th Sep, 2016 and 20th Sep, 2016. It can be predicted that there is some possibility of rise in the price. A bullish Swing can also be expected.
Moving Average Crossover As we can see from the period of 9th Sept onwards, that the 20 Day Moving average (Blue Line) is coming closer to the 10 Day moving average (Red Line) from upside which leads to the buying of the stock but as it can be seen from the graph that the 50 Day Moving average (orange line) is also cutting both from downside. For here we can predicted that it is the time to buy the stock.
Moving Average Convergence Divergence The MACD Histogram here is representing the difference in the 26 and 12-Day exponential moving average. As from 23th Sep,2016 onwards, the value of histogram is above the zero line and blue line is cutting red from downside. So, it is the time to buy the stock.
Relative Strength Index In the above Chat we can see the share price is constant around 40. Which shows TCS is technically weak. Hence it cant predict to sell so, best is to hold the stock.
Fundamental Analysis Weighted average cost of capital (WACC) Particulars Value Debt (D)* 163.02 Equity (E)* 197.04 Rd (Return on debt = Interest payment/ debt) 13.59% Re (Return on equity)* 43.89 V (D+E) 360.06 D/V 0.452757874 E/V 0.547242126 Interest Payment* 13.58 Tax rate (fixed) 0.30 WACC (Rd *(1-T)*D/V+Re*E/V) 24.05336892 WACC = (Rd *(1-T)*D/V+Re*E/V) = 13.58/163.02*(1-0.30)*163.2/360.06+43.89*197.04/360.06 = 13.59*(1-0.30)*0.45275787+43.89*0.547242126 = 24.054336892 *Taken for Balance Sheet & Accounts
Free Cash Flow for the Firm (FCFF) Particulars Value EBIT 30,689.41 Tax rate 0.30 Capital Expenditure 20465 Depreciation 1,559.19 Change in WC 13360.58 FCFF 11867.94 FCFF Formula: FCFF = EBIT (1-t) (Capital expenditure depreciation) Change in Working capital = 30689.41 (1-0.30) (20465-1559.19) 13360.58 = 11897.94 The cash flow of the company is doing good. So, as per the Interpretation based on of Fundamental Analysis the TCS is doing well Therefore, we can Buy the stock.
Interpretation As per the Interpretation based on Analysis the TCS is doing well. Therefore, we can Buy the stock. THANK YOU

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Presentation1

  • 1. PROJECT REPORT ON TECHNICAL & FUNDAMENTAL ANALYSIS OF TATA CONSULTANCY SERVICES 2015-2016 SUBBMITTED BY: SACHIN SAINI
  • 2. Technical Analysis The Interpretation of Technical Analysis is based on chats/graph. Which are as follow:- 1. Moving Averages Crossovers MACD 2. Momentum Indicators RSI Relative Strength Index
  • 3. Line Chat Bearish Double Bottom As we can see after 15th Aug trend become bearish and there was a Double Bottom indication in the trend after bearish trend in between 3th Sep, 2016 and 20th Sep, 2016. It can be predicted that there is some possibility of rise in the price. A bullish Swing can also be expected.
  • 4. Moving Average Crossover As we can see from the period of 9th Sept onwards, that the 20 Day Moving average (Blue Line) is coming closer to the 10 Day moving average (Red Line) from upside which leads to the buying of the stock but as it can be seen from the graph that the 50 Day Moving average (orange line) is also cutting both from downside. For here we can predicted that it is the time to buy the stock.
  • 5. Moving Average Convergence Divergence The MACD Histogram here is representing the difference in the 26 and 12-Day exponential moving average. As from 23th Sep,2016 onwards, the value of histogram is above the zero line and blue line is cutting red from downside. So, it is the time to buy the stock.
  • 6. Relative Strength Index In the above Chat we can see the share price is constant around 40. Which shows TCS is technically weak. Hence it cant predict to sell so, best is to hold the stock.
  • 7. Fundamental Analysis Weighted average cost of capital (WACC) Particulars Value Debt (D)* 163.02 Equity (E)* 197.04 Rd (Return on debt = Interest payment/ debt) 13.59% Re (Return on equity)* 43.89 V (D+E) 360.06 D/V 0.452757874 E/V 0.547242126 Interest Payment* 13.58 Tax rate (fixed) 0.30 WACC (Rd *(1-T)*D/V+Re*E/V) 24.05336892 WACC = (Rd *(1-T)*D/V+Re*E/V) = 13.58/163.02*(1-0.30)*163.2/360.06+43.89*197.04/360.06 = 13.59*(1-0.30)*0.45275787+43.89*0.547242126 = 24.054336892 *Taken for Balance Sheet & Accounts
  • 8. Free Cash Flow for the Firm (FCFF) Particulars Value EBIT 30,689.41 Tax rate 0.30 Capital Expenditure 20465 Depreciation 1,559.19 Change in WC 13360.58 FCFF 11867.94 FCFF Formula: FCFF = EBIT (1-t) (Capital expenditure depreciation) Change in Working capital = 30689.41 (1-0.30) (20465-1559.19) 13360.58 = 11897.94 The cash flow of the company is doing good. So, as per the Interpretation based on of Fundamental Analysis the TCS is doing well Therefore, we can Buy the stock.
  • 9. Interpretation As per the Interpretation based on Analysis the TCS is doing well. Therefore, we can Buy the stock. THANK YOU