Mumbai/Bengaluru: Tata Consultancy Services Ltd (TCS), which is currently in its 50th year, on Monday surpassed the $100 billion mark in market value, becoming only the second Indian firm after Reliance Industries Ltd to do so.
Even as analysts debate if its share price is fairly valued, there is no dispute over TCS’s scorching growth, having added $10.9 billion in revenue over the past seven years. That is roughly the size of India’s second largest IT services firm Infosys Ltd, which ended FY18 with $10.94 billion in revenue.
Over the past few years, TCS has pulled away from its nearest rival, widening the revenue gap from $1.46 billion in 2008 to $8.15 billion in 2018.
The gap between TCS and Infosys captures the resurgence in the Mumbai-based company’s fortunes since N. Chandrasekaran, the current chairman of Tata Sons Ltd, took over as CEO in November 2009.
“What is exciting for us is the whole Business 4.0 journey and the great opportunity to be a digital partner of choice to our customers in their growth and transformation journey," said Rajesh Gopinathan, the CEO and managing director of TCS.
With TCS signing up several large new deals, the gap between India’s top two software services providers is only likely to widen.
In the March quarter, TCS claims to have won over 450 small digital deals with a total value of over $1 billion, according to a senior executive. TCS’s deal wins in digital—the fuzzy umbrella term which each company uses to classify revenue generated from areas generally classified as social, mobile, analytics, cloud computing and Internet of Things—is higher than the $905 million worth of total deal wins, including rebids and new wins, by Infosys in the quarter.
“We believe our thought leadership framework of Business 4.0 should help us continue on the right profitability and growth path," TCS chief operating officer N. Ganapathy Subramaniam said in an interview last week.
“Chandra (Chandrasekaran) always believed in giving a much larger role to people he believed had potential, and so the organizational change we undertook was a phenomenal move. We organized ourselves into smaller units. Each of the units was run by leaders who were told to run it the way they wanted," Subramaniam said.
“I sometimes call TCS the Indian IBM because of the longevity of its staff and unique culture," said Phil Fersht, CEO of HfS Research, an outsourcing-research firm. “It has stayed very focused on relentless execution and is less obsessed with marketing messages and trying to sound like everyone else."
“We have added this capability of adding a cylinder to a moving car. We now understand that digital is not technology. It is a series of technologies. This is why we have defined Business 4.0, under which we can come up with new offerings without, say, destabilizing a car. And credit to Rajesh (Gopinathan) and our team for remaining focused on what our clients want," said Subramaniam.