India’s largest software exporter Tata Consultancy Services (TCS), which went past IBM’s market capitalization on Monday, is about 11 percent away from turning more valuable than Adobe Inc. Currently, TCS — the second-fastest growing software company among the top 10 — is valued at $121.73 billion compared to $119 billion of IBM and $118 billion of Accenture.
The Tata group company’s revenue has risen 12 percent on a compounded basis in the past five years compared to 7 percent of Microsoft, 9 percent of Apple or 8 percent of SAP. Since its listing in August 2004, TCS stock has returned 1,790 percent. Apple, the only stock which has outperformed TCS among IT giants, has returned 8,400 percent during this period. But, IBM and Accenture posted sales of $80 billion and $42 billion, respectively, compared to TCS’s revenue of $21 billion. The market value of TCS trails SAP by 23 percent.
Tech Stocks A Global Comparison (source economictimes)
The tale of two IT majors
It is very interesting to note that the tech giant IBM and TCS were once partners. And, IBM had tried to buy out TCS. While in recent news, IT giant Tata Consultancy Services (TCS) surpassed the tech giant IBM in terms of M-capitalization. Due to stock prices change the market capitalization keeps on fluctuating. Moreover, TCS also took over Reliance Industries Limited(RIL) on the same day, scoring the most valued Indian company.
TCS overtook IT giant IBM
In recent trade, TCS market capitalization share of $120 billion, i.e. Rs 8.37 lakh crore. Whereas IBM recorded the same $119.6 billion or Rs 8.32 lakh crore in New York stock exchange. Closing trade of IBM M-capitalization stood at Rs 8.29 lakh crore and TCS to Rs 8.44 lakh crore.
In recent years, TCS profits and growth are in a constant roller-coaster similarly the tech giant IBM also known as ‘Big Blue’ have seen several ups and downs.
IBM is focusing more on technologies and software and moving away from commoditized parts of its business. In fiscal year, TCS net profit of $4.5 billion from total revenue of $21 billion, whereas IBM IBM documented $8.7 billion from $79.6 billion.
TCS Pushes RIL to be Most Favoured Company.
In a recent exchange, TCS not only surpassed IBM in terms of m-cape but also Reliance Industries Limited(RIL). This made the company most valued Indian company in the stock market overtaking both IT giant on the same day.
The M-cap of TCS while the closing of trade was Rs 8,37,194.55 crore, which was Rs 1,170.47 crore more than that of RIL’s m-cap, lodged at Rs 8,36,024.08 crore on the BSE. TCS’s shares rose by 2.39% to shut at Rs 2,231.10, while that of RIL rose by 0.27% to shut at flat Rs 1,318.85.
Both companies compete against each other to bag the top position in market capitalization. In May, RIL reclaimed the top position in market capitalization and became most-valued firm overtaking TCS.
TCS is at number 1 position, followed by RIL, HDFC Bank, HUL and HDFC in market capitalization ranking.
In stock market nothing is constant, now TCS holds the first position, maybe in future, there can be some other tech giant the thrown.
Once again an Indian Compay has proved to be a pride for the nation. What’s your view on this? Do tell us in the comments!
Suggested readings:
