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Tata Consultancy ServicesBOM:532540 +0.24%87 Return-on-Tangible-Equity is 54.61% as of Jun. 2026, which is 30% above its 10-year median of 42.06. GuruFocus rates BOM:532540 with a GF Score™ of 87/100 and a GF Value™ of ₹4,075.54 (Significantly Undervalued). The stock has 1 warning sign investors should review. Among 2,486 Software companies, Tata Consultancy Services ranks better than 82.78% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Tata Consultancy Services's annualized net income for the quarter that ended in Jun. 2026 was ₹533,960 Mil. Tata Consultancy Services's average shareholder tangible equity for the quarter that ended in Jun. 2026 was ₹977,770 Mil. Therefore, Tata Consultancy Services's annualized Return-on-Tangible-Equity for the quarter that ended in Jun. 2026 was 54.61%.
The historical rank and industry rank for Tata Consultancy Services's Return-on-Tangible-Equity or its related term are showing as below:
BOM:532540'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 30.76 Med: 42.06 Max: 54.05
Current: 49.92
During the past 13 years, Tata Consultancy Services's highest Return-on-Tangible-Equity was 54.05%. The lowest was 30.76%. And the median was 42.06%.
BOM:532540's Return-on-Tangible-Equity is ranked better than 82.78% of 2486
companies
in the Software industry
Industry Median: 9.81
vs BOM:532540: 49.92
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Tata Consultancy Services Return-on-Tangible-Equity Related Terms
Tata Consultancy Services Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Tata Consultancy Services's Return-on-Tangible-Equity can be seen below:
* 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.
BOM:532540 vs IBM, ACN, FISV: Return-on-Tangible-Equity Comparison
For the Information Technology Services subindustry, Tata Consultancy Services's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Software Industry
For the Software industry and Technology sector, Tata Consultancy Services's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Tata Consultancy Services's Return-on-Tangible-Equity 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Jun. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 54.61% mean?
Tata Consultancy Services (BOM:532540) has a Return-on-Tangible-Equity of 54.61% as of Jun. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Tata Consultancy Services and its competitors. This is 30% above median its historical median of 42.06. Over the past decade, Tata Consultancy Services' Return-on-Tangible-Equity has ranged from 30.76 to 54.05. According to the industry distribution chart, Tata Consultancy Services ranks #428 out of 2486 companies in the Software industry, placing it in the top 17.2%.
Is Tata Consultancy Services' Return-on-Tangible-Equity too high?
Tata Consultancy Services' current Return-on-Tangible-Equity of 54.61% is 30% above median its 10-year median of 42.06. Over the past 10 years, this metric has ranged from a low of 30.76 to a high of 54.05. The Software industry median Return-on-Tangible-Equity is 9.81. Tata Consultancy Services' value of 54.61% is 456.7% above this industry median. Based on the distribution chart, Tata Consultancy Services ranks #428 out of 2486 companies in the Software industry, which is in the top quartile — a strong position relative to peers. 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' Return-on-Tangible-Equity compare to IBM and ACN?
According to the Software industry distribution chart, Tata Consultancy Services ranks #428 out of 2486 companies for Return-on-Tangible-Equity. This places Tata Consultancy Services in the top 17% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 9.81. Tata Consultancy Services' value of 54.61% is 456.7% above this benchmark. Historically, Tata Consultancy Services' own Return-on-Tangible-Equity has ranged from 30.76 to 54.05 over the past decade. While the company's 10-year median is 42.06 vs. the industry median of 9.81, 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 Return-on-Tangible-Equity for a Software company?
The median Return-on-Tangible-Equity among Software companies is 9.81, based on 2,486 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Tata Consultancy Services's current Return-on-Tangible-Equity of 54.61% is 456.7% 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 Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Tata Consultancy Services and its competitors. For the Software industry, the median Return-on-Tangible-Equity is 9.81 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Tata Consultancy Services's current Return-on-Tangible-Equity is 54.61%, which is 30% above median its own 10-year median of 42.06. 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 (BOM:532540) is currently considered Significantly Undervalued. The stock's GF Value™ is ₹4,075.54, compared to a current price of ₹2,298.00 — trading 43.6% below its estimated fair value. The current Return-on-Tangible-Equity is 54.61%, which is 30% above median its 10-year median of 42.06 and 456.7% above the Software industry median of 9.81. 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 Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Tata Consultancy Services (BOM:532540), the current Return-on-Tangible-Equity is 54.61% 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 (BOM:532540) Overvalued in 2026?
Based on GuruFocus' analysis, Tata Consultancy Services stock appears to be undervalued.
The current stock price of ₹2,298.00 is trading 43.6% below its estimated GF Value™ of ₹4,075.54.
GuruFocus considers Tata Consultancy Services to be Significantly Undervalued.
Key valuation signals for BOM:532540:
Return-on-Tangible-Equity: 54.61% (30% above median its 10-year median of 42.06)
GF Value™: ₹4,075.54 vs. price of ₹2,298.00 (43.6% below fair value)
Industry Position: 456.7% above the Software median (#428 of 2486)
No single metric tells the full story. See the BOM:532540 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
Get the complete analysis for BOM:532540
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