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Tata Consultancy ServicesNSE:TCS +0.39%87 Gross Margin % is 39.83% as of Jun. 2026, which is 15% below its 10-year median of 46.98. GuruFocus rates NSE:TCS with a GF Score™ of 87/100 and a GF Value™ of ₹4,069.64 (Significantly Undervalued). The stock has 1 warning sign investors should review. Among 2,690 Software companies, Tata Consultancy Services ranks better than 51.04% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Tata Consultancy Services had a gross margin of 39.83% for the quarter that ended in Jun. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Tata Consultancy Services Gross Margin % Related Terms
Tata Consultancy Services Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
NSE:TCS vs IBM, ACN, FISV: Gross Margin % Comparison
For the Information Technology Services subindustry, Tata Consultancy Services's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Tata Consultancy Services Gross Margin % vs Software Industry
For the Software industry and Technology sector, Tata Consultancy Services's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Tata Consultancy Services's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Tata Consultancy Services (NSE:TCS) has a Gross Margin % of 39.83% as of Jun. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Tata Consultancy Services and its competitors. This is 15% below median its historical median of 46.98. Over the past decade, Tata Consultancy Services' Gross Margin % has ranged from 41.54 to 48.93. According to the industry distribution chart, Tata Consultancy Services ranks #1317 out of 2690 companies in the Software industry, placing it in the top 49%.
Is Tata Consultancy Services' Gross Margin % too high?
Tata Consultancy Services' current Gross Margin % of 39.83% is 15% below median its 10-year median of 46.98. Over the past 10 years, this metric has ranged from a low of 41.54 to a high of 48.93. The Software industry median Gross Margin % is 40.76. Tata Consultancy Services' value of 39.83% is 2.3% below this industry median. Based on the distribution chart, Tata Consultancy Services ranks #1317 out of 2690 companies in the Software industry, which is above the industry midpoint. Overall, Tata Consultancy Services has a GF Score™ of 87/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Tata Consultancy Services' Gross Margin % compare to IBM and ACN?
According to the Software industry distribution chart, Tata Consultancy Services ranks #1317 out of 2690 companies for Gross Margin %. This puts Tata Consultancy Services in the upper half of its industry. The industry median Gross Margin % is 40.76. Tata Consultancy Services' value of 39.83% is 2.3% below this benchmark. Historically, Tata Consultancy Services' own Gross Margin % has ranged from 41.54 to 48.93 over the past decade. While the company's 10-year median is 46.98 vs. the industry median of 40.76, Tata Consultancy Services has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.76, based on 2,690 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Tata Consultancy Services's current Gross Margin % of 39.83% is 2.3% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Tata Consultancy Services and its competitors. For the Software industry, the median Gross Margin % is 40.76 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Tata Consultancy Services's current Gross Margin % is 39.83%, which is 15% below median its own 10-year median of 46.98. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Tata Consultancy Services stock overvalued right now?
Based on GuruFocus' analysis, Tata Consultancy Services (NSE:TCS) is currently considered Significantly Undervalued. The stock's GF Value™ is ₹4,069.64, compared to a current price of ₹2,302.00 — trading 43.4% below its estimated fair value. The current Gross Margin % is 39.83%, which is 15% below median its 10-year median of 46.98 and 2.3% below the Software industry median of 40.76. Tata Consultancy Services' overall GF Score™ is 87/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Tata Consultancy Services (NSE:TCS), the current Gross Margin % is 39.83% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Tata Consultancy Services (NSE:TCS) Overvalued in 2026?
Based on GuruFocus' analysis, Tata Consultancy Services stock appears to be undervalued.
The current stock price of ₹2,302.00 is trading 43.4% below its estimated GF Value™ of ₹4,069.64.
GuruFocus considers Tata Consultancy Services to be Significantly Undervalued.
Key valuation signals for NSE:TCS:
Gross Margin %: 39.83% (15% below median its 10-year median of 46.98)
GF Value™: ₹4,069.64 vs. price of ₹2,302.00 (43.4% below fair value)
Industry Position: 2.3% below the Software median (#1317 of 2690)
No single metric tells the full story. See the NSE:TCS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Tata Consultancy Services is a leading global IT services provider based in Mumbai, India. Founded in 1968, it is one of the first companies to leverage a global delivery model that helps clients outsource their IT needs to offshore labor. The company boasts a wide range of offerings, including IT consulting, managed services, and business process outsourcing.
87GF Score
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