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Tata Consultancy ServicesNSE:TCS +0.17%87 Interest Coverage is 63.43 as of Jun. 2026, which is 13% below its 10-year median of 73.09. 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 1,720 Software companies, Tata Consultancy Services ranks better than 59.24% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
Operating Income
by its Interest Expense. Tata Consultancy Services's
Operating Income
for the
three
months ended in Jun. 2026 was ₹173,170 Mil. Tata Consultancy Services's Interest Expense for the
three
months ended in Jun. 2026 was ₹-2,730 Mil.
Tata Consultancy Services's interest coverage for the quarter that ended in Jun. 2026 was 63.43.
The higher the ratio, the stronger the company's financial strength is.
Good Sign:
Ben Graham prefers companies' interest coverage to be at least 5. Tata Consultancy Services Ltd has enough cash to cover all of its debt. Its financial situation is stable.
The historical rank and industry rank for Tata Consultancy Services's Interest Coverage or its related term are showing as below:
NSE:TCS'
s Interest Coverage Range Over the Past 10 Years
Min: 41.91 Med: 73.09 Max: 951.53
Current: 52.63
NSE:TCS's Interest Coverage is ranked better than 59.24% of 1720
companies
in the Software industry
Industry Median: 26.445
vs NSE:TCS: 52.63
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
Tata Consultancy Services Interest Coverage Related Terms
Tata Consultancy Services Interest Coverage 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.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
NSE:TCS vs IBM, ACN, FISV: Interest Coverage Comparison
For the Information Technology Services subindustry, Tata Consultancy Services's Interest Coverage, along with its competitors' market caps and Interest Coverage 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 Interest Coverage vs Software Industry
For the Software industry and Technology sector, Tata Consultancy Services's Interest Coverage distribution charts can be found below:
* The bar in red indicates where Tata Consultancy Services's Interest Coverage falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* 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.
Tata Consultancy Services (NSE:TCS) has a Interest Coverage of 63.43 as of Jun. 2026. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Tata Consultancy Services and its competitors. This is 13% below median its historical median of 73.09. Over the past decade, Tata Consultancy Services' Interest Coverage has ranged from 41.91 to 951.53. According to the industry distribution chart, Tata Consultancy Services ranks #701 out of 1720 companies in the Software industry, placing it in the top 40.8%.
Is Tata Consultancy Services' Interest Coverage too high?
Tata Consultancy Services' current Interest Coverage of 63.43 is 13% below median its 10-year median of 73.09. Over the past 10 years, this metric has ranged from a low of 41.91 to a high of 951.53. The Software industry median Interest Coverage is 26.45. Tata Consultancy Services' value of 63.43 is 139.9% above this industry median. Based on the distribution chart, Tata Consultancy Services ranks #701 out of 1720 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' Interest Coverage compare to IBM and ACN?
According to the Software industry distribution chart, Tata Consultancy Services ranks #701 out of 1720 companies for Interest Coverage. This puts Tata Consultancy Services in the upper half of its industry. The industry median Interest Coverage is 26.45. Tata Consultancy Services' value of 63.43 is 139.9% above this benchmark. Historically, Tata Consultancy Services' own Interest Coverage has ranged from 41.91 to 951.53 over the past decade. While the company's 10-year median is 73.09 vs. the industry median of 26.45, Tata Consultancy Services has consistently been above 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 Interest Coverage for a Software company?
The median Interest Coverage among Software companies is 26.45, based on 1,720 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Tata Consultancy Services's current Interest Coverage of 63.43 is 139.9% above 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 Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Tata Consultancy Services and its competitors. For the Software industry, the median Interest Coverage is 26.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Tata Consultancy Services's current Interest Coverage is 63.43, which is 13% below median its own 10-year median of 73.09. 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 Interest Coverage is 63.43, which is 13% below median its 10-year median of 73.09 and 139.9% above the Software industry median of 26.45. 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 Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For Tata Consultancy Services (NSE:TCS), the current Interest Coverage is 63.43 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:
Interest Coverage: 63.43 (13% below median its 10-year median of 73.09)
GF Value™: ₹4,069.64 vs. price of ₹2,302.00 (43.4% below fair value)
Industry Position: 139.9% above the Software median (#701 of 1720)
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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