TCS Market Value Tops Rs. 5 Lakh Crore for First Time in IT history
Tata Consultancy Services shares hit their all-time high on Wednesday following which the IT major's market capitalisation crossed a record Rs. 5 lakh crore. Market cap is the value of a company's outstanding shares and is used to determine a company's size.
TCS is the first Indian company to achieve a market cap of Rs. 5 trillion. TCS' nearest rival in terms of market cap is state-run ONGC (Rs. 3.5 lakh crore). Reliance Industries, India's biggest company by sales, ranks third by market cap (Rs. 3.3 lakh crore) currently.
Among IT companies, TCS' market cap is more than the combined market cap of its nearest three rivals -- Infosys (Rs. 1.90 lakh crore), Wipro (Rs. 1.39 lakh crore) and HCL Tech (Rs. 1.07 lakh crore).
In dollar terms, TCS' market cap has surged to $83 billion (at 60 rupee per dollar), which is comparable to the BMW Group and drugmaker AstraZeneca, but far less than its global competitor IBM, which is valued at nearly $200 billion.
TCS, India's biggest outsourcer, has been a steady outperformer and has overtaken Infosys as India's bellwether IT company. Its first quarter results were described as "superlative" by Asia-Pacific focused brokerage CLSA.
TCS has increased profit over the last two years at a faster pace than rivals Infosys and Wipro, which have both had internal management changes.
The Mumbai-based firm is estimated to post revenue growth of 16 per cent in the next 12 months, compared with Infosys' 8.3 per cent and Wipro's 9.9 per cent, according to Thomson Reuters SmartEstimates.
"Despite its size, TCS remains the fastest growing IT services company in the offshore space... to that extent the premium valuation of TCS is justified. There are not too many stocks that show that kind of revenue traction," said Hitesh Shah of IDFC Securities.
TCS gained 2.1 per cent to end at Rs. 2,586 and outperformed the broader Nifty index, which closed 0.36 per cent higher.Source