The significant appreciation in its share price, from Rs 1,410 on April 26 to Rs 2,023 on Friday, has made Tata Consultancy Services (market cap: Rs 3,95,975 crore or $58.66 billion) the world’s second-most valuable IT services company after IBM.
TCS is now way ahead of third-placed Accenture (market cap: $46.7 billion) and fourth-placed HP ($43.3 billion), both of which have higher revenues. IBM, the most valuable IT services company in the world is way ahead of the pack with a market cap of $200 billion.
In two recent but separate reports, global equity giants JP Morgan and CLSA have said TCS could become the first Indian company to touch a market capitalisation of $100 billion (Rs 6,57,000 crore at the current exchange rate) within the next few years.
The TCS scrip touched a lifetime trading high of Rs 2,023.13 up Rs 77 or 3.96% in trading on Friday.
“Yes, I definitely think TCS can do it,” said Ankita Somani, research analyst, Angel Broking. She noted that TCS has been ahead of peers, having diversified outside of its traditional US and European markets. Brazil, Japan and China are some of the new markets that TCS has ventured into. And despite its scale, it is growing faster than most other global IT firm.
“More importantly, this growth is at industry-leading margins and everything seems to be going right for TCS at the moment and we believe it has the potential to be India’s first company to reach $100 billion in market cap,” CLSA said on Friday.
“If TCS grows revenues at a CAGR of 15% over four to five years, holding margins/ROE constant at current multiples, the $100-billion market cap threshold can be achieved,” JP Morgan said in a note earlier this month.