Capgemini - The Giant rises, even when the world falls.

Summary

Capgemini, a global leader in Consulting and IT services has always worked behind the scenes powering transformation for some of the world’s biggest companies. But its true value doesn’t shine in the calm it shows when the storm hits. When businesses are under pressure, cutting costs and searching for smarter ways to operate, Capgemini rises. With deep expertise and quiet consistency it helps companies stay afloat and move forward not loudly but effectively. A giant in every sense especially when it matters most.

Why Capgemini Grows Stronger When the World Slows Down

When the economy slows down, companies feel the heat. Sales drop, costs rise, and suddenly every decision starts to feel like a risk. So, most businesses start cutting costs in marketing, staff and tech. But here’s the truth you can’t save your way out of a storm, you have to build yourself strong enough to survive it. That's where Capgemini steps in. It delivers the core services that businesses must have, to stay alive and grow during tough times including -

-Cloud computing to reduce IT costs

-Cybersecurity to defend against rising threats

-Automation to boost efficiency

-And Outsourcing to stay lean and focused

 These aren’t upgrades, they’re essentials. And Capgemini makes a simple promise to every business it supports, “You focus on your business. I’ll handle the rest.” From your systems to your security, your backend becomes Capgemini’s responsibility  so you can move faster, stay protected and focus entirely on growth.

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How Capgemini turns Recession into a Revenue Engine

1. Companies Want to Cut Costs

• During a recession the companies want to save money.

• Capgemini helps them automate work, using cheaper digital systems and reducing manual labor.

• Example: Instead of hiring a full in house tech team, a company outsources to Capgemini (which is cheaper and more efficient).

2. More Demand for Outsourcing

• Businesses prefer to outsource IT and support services to experts like Capgemini.

• This saves money and improves speed.

3. Focus on Efficiency and Technology

• In tough times, companies want to become faster, smarter and more digital.

• Capgemini helps them move to cloud computing, AI tools and digital platforms.

• These changes reduce costs and also improve productivity.

4. Government and Critical Sector Projects Continue

• Even during a recession the banks, energy, telecom and government still need IT support and innovation.

• Capgemini works with these sectors so the demand stays steady.

5. Long-Term Contracts

• Capgemini has multi-year contracts with many clients.

• This gives it stable income even if the economy slows down.
  
  

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Financial overview

 

Financial Performance
—	FY-20	FY-24
Net Revenue	15171.5cr	27786cr
Net Profit	1656.9cr	3245.9cr
EPS	280.1	547.6
Total Assets	16368.1cr	25125.5cr

 

The company delivered strong performance with robust double-digit growth across revenue, profit, EPS and assets.

➜ Net Revenue 83.15% - Strong top-line expansion

➜ Net Profit 95.87% - Improved operational efficiency

➜ EPS 95.50% - Enhanced shareholder value

➜ Total Assets 53.51% - Solid balance sheet growth

 

 

Solvency ratio
Ratio	Value
Debt-to-Equity	0.32
Debt-to-Assets	0.026
Interest Coverage Ratio	68.9

 

The company maintains a very healthy debt profile with low leverage and strong interest coverage that indicates robust financial stability and a minimal reliance on external borrowing.

➜ Low leverage, company uses more equity than debt

➜ Very low debt in total assets, strong asset backing

➜ Excellent ability to meet interest obligations

 

 

Peer Comparison of Valuation
Valuation Metric	Capgemini	TCS	Infosys
Price to Earnings (P/E)	22.8	24	25
Price to Book (P/B)	3.6	12.48	6.9
Market Cap to Sales	2.67	5.5	4.8

 

Capgemini is currently trading at the most attractive valuation among its peers offering the best value in terms of earnings, book value and revenue multiples.

➜ Capgemini has the lowest P/E suggesting it's more attractively priced based on earnings

➜ It trades at a significantly lower P/B, indicating stronger value on shareholder equity

➜ Lowest Market Cap to Sales which means investors pay less for every ₹1 of revenue

 

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Segment Revenue Breakup

 

➜ India saw solid growth, with revenue increasing from ₹38,192 Cr to ₹41,930 Cr (9.8% rise)

➜ UK & Europe maintained its position as the largest revenue contributor by growing from ₹1,12,118 Cr to ₹1,17,747 Cr

➜ America experienced a slight dip in the revenue from ₹1,10,136 Cr to ₹1,08,673 Cr

➜ Rest of the world remained relatively stable and showing a minor decline

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Why every Recession sparks an IT Revolution

In today’s world, IT is no longer a support function but the core engine that keeps businesses running from backend systems to cybersecurity and automation, it simply can’t be replaced.

History has shown us that IT service companies tend to grow stronger after every global crisis. When businesses are hit by recessions they often look to cut costs and boost efficiency, exactly what IT firms help them do.

We saw this clearly after the 2008 financial crisis and again in the post Covid boom of 2020. IT wasn’t just a service it became the shield and sword for companies navigating chaos.

Now, with early signs of a global slowdown and rising geopolitical tensions the stage may be set for another massive wave of IT growth and those who position themselves early could ride this compounding cycle once again.

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Final Thoughts & Analyst Talk 

The world is shifting.

Global tensions are rising. Economies are wobbling. The early signs of a slowdown are quietly surfacing. And when recessions hit, they don’t knock, they crash. Companies falter. Profits vanish. Some never recover.

But in every downturn, there are a few who don’t just survive, they lead.
Capgemini could be one of those rare stories.

While the world cuts back, Capgemini steps in. Its services include cost optimization, digital transformation and automation which aren’t optional during recession they’re essential. And that’s where the opportunity lies.

Today, it's trading at one of the best valuations among its peers. Quiet Underpriced. Yet fundamentally strong.

So as an Analyst, the view is simple:

If the world is heading into a storm, Capgemini might just be the ship built to sail through it. While others slow down, it has the tools to accelerate.
Valuations are low, fundamentals are strong and the market hasn’t fully noticed yet.
For those paying attention, this could be the opening scene of a winning story. If you came across it while reading on sharescart.com maybe this is where you quietly become part of the winning story.