Below is our thoughts on the cycles of Tata Consultancy Services from 2004 to 2023.
There have been four clear cycles in the price of Tata Consultancy Services (TCS) since 2008. If the pattern were to continue, we’d expect that a similar run to the upside (gray line; RHS) as seen in prior cycles.
Based on the historical trend, TCS has a high probability of the price achieving a positive return if held a minimum of 4 years. The expected annualized return would be approximately 20%.
The downside risk is the primary (only) concern. Based on the prior cycles, the average decline for any given year is approximately -25%. This excludes the declines of 2006 and 2007 where TCS fell more than -50% if a transaction is initiated.