Mumbai-based Tata Consultancy Services Ltd. (TCS NSE 0.16%) has once again become the world’s most-valued information technology (IT) company with a market capitalization of $169.25 billion on Monday. The company eclipsed a US-based It company, Accenture, to hold the top spot once again. In the process, TCS also trumped Reliance Industries NSE – 1.78% Ltd. (RIL) to become India’s most valuable company.
The share price of TCS fell 0.4% from its previous close, it was at Rs. 3,290 apeice on Monday, imparting India’s largest software services exporter a market cap of $169.2 billion, or Rs. 12.34 lakh crore. At the same time, Accenture was valued at $168.4 billion, or Rs. 12.27 lakh crore, on the New York Stock Exchange (NYSE). RIL’s market cap was at $168.5 billion, or Rs. 12.29 trillion.
TCS unexpectedly gave high Q3 results its net profit rose 7.3% year-on-year to Rs. 8,701 crore. According to the management during October-December, The IT bellwether, a Tata Group company, expanded its presence in the European market by making two acquisitions and is likely to see more large deal wins.
Brokerages have raised target prices on TCS after it reported better-than-expected results for the December quarter.
“The company has returned to positive growth zone and YoY basis and management is confident of regaining double-digit growth trajectory,” said Edelweiss raising the target price to Rs. 4,176 from Rs. 4,000 according to LiveMint.
As IT firms capitalized on the increased demand for digital services for remote working, the NSE Nifty IT index outperformed the broader indices in the pandemic year of 2020. According to Economic Times, “the Nifty IT index rose 57.98% in the last one year compared to a 16.25% rise in Nifty 50.”
Due to the COVID-19 pandemic, technology companies were among the worst-hit industries as it stalled trade and forced employees to work from home, raising costs. However, the sector started regaining its lost charm in the second quarter, aided by large deal wins and clients spending an AI, cloud computing, and the Internet of Things (IoT) as businesses moved online. In the quarter ended December, TCS reported deal wins worth $6.8 billion.
This is not the first time TCS has raced ahead of its competitors. In April 2018, the company reached the $100 billion valuation mark and overtook Accenture’s pinnacle position in the market.