TCS market cap tops ~13-trillion mark

Tata Consultancy Services (TCS) became the second listed company and the first information technology (IT) company to cross the ~13 trillion market capitalisation (market cap) after its stock hit a new high on Tuesday.

The stock of TCS closed at ~3,552.40, up 2.32 per cent on the BSE. TCS' stock, part of the Tata group of companies, quoted higher for the ninth straight trading day. Thus far in August, in 12 trading days, TCS has rallied over 11 per cent, against a 6 per cent rise in the S&P BSE Sensex.

The sharp rally in stock price helped TCS' market cap rise to ~13.14 trillion. In terms of market cap, it stands at Number 2, behind Reliance Industries which has a market cap of ~14.36 trillion, according to the BSE data.

TCS is one of the leading IT service providers with a presence in the BFSI, communication, manufacturing, retail & hi-tech verticals. The company has posted consistent organic revenue growth and industry-leading margin (>25 per cent).

The company is a key beneficiary of multiyear growth (15-20 per cent) in digital technologies. An increase in outsourcing in Europe, vendor consolidation, and deal pipeline should lead to a revenue CAGR of 13 per cent over FY21-23E, analysts at ICICI Securities said in the June quarter result update. The brokerage further said industry-leading margin will continue and expects its margin to improve by 142 bps over FY21-23E.

“Strong order book along with execution capabilities and upward traction across the geography should support top-line growth. Additionally, improved operating leverage and a healthy balance sheet should provide further growth visibility in the upcoming quarter,” Geojit Financial Services said in the result update.