The combined market capitalisation of Tata group companies surpassed Rs 25 lakh crore on Wednesday after the group’s cash churner, Tata Consultancy Services, joined the party following the large deal win from Jaguar Land Rover (JLR).’
After last years’ muted performance, shares of TCS have rallied as much as 16 percent from their April lows as valuation comfort in large IT names attracted investors attention. The gauge for software stocks — Nifty IT index — had come off 32 percent between January 2022 to April 2023 after companies in the sector lowered their full-year revenue growth forecasts . Even the stock of TCS also mirrored the same trend with the stock plunging 26 percent from its January 2022 highs.
Last week TCS announced a large deal win from JLR worth $ 1 billion TCV over five years. The deal would add $200 million annually to company’s revenues. The JLR deal along with the $1.8 billion BSNL deal and $1 billion Nest deal could together potentially add 3.5 percent to Q3 growth and 1.8 percent each to FY24 and FY25 growth, assuming the ramp-ups start happening from Q3, observed J.P. Morgan in an investor note.
However, TCS which accounted nearly three-fourths to the group’s market valuation in 2020 is now contributing 52 percent to the group market capitalisation. Further, except Rallis India, all listed companies have generated positive returns so far in 2023, with companies like Tata Motors, Trent and Tata Communications rallying more than 50 percent. The benchmark Nifty50 has gained 11 percent during the same period.
Of the total addition of Rs 4 lakh core, TCS alone contributed Rs 1.14 lakh crore, which was followed by Tata Motors and Titan Company. While the market capitalisation of Tata Motors increased by Rs 90,259 crore so far this year, Titan Company saw a surge of Rs 59,100 crore.
While Tata group occupies the top position as the most valuable business conglomerate in the country, Mukesh Ambani-led Reliance group ranked second with a market capitalisation of Rs 16.8 lakh crore.