TCS’s threat in Tata Group’s MCAP – TCSS Threat in Tata Groups MCAP

Information Technology (IT) company Tata Consultancy Services (TCS) is still the most valuable company of the Tata Group but its contribution to the group’s total market capitalization has decreased in recent years. TCS’s stake in the total market capitalization of all the listed companies of the Tata group has come down to 44.8 per cent, the lowest level since March 2009. In March 2020, the company’s share in the group’s market capitalization increased to the highest level of 74.4 per cent.

The market capitalization of TCS remained at Rs 11.94 lakh crore after the trading ended on 17 April 2025, while the joint market capitalization of Tata group companies recorded Rs 26.61 lakh crore that day. Since March last year, TCS’s market capitalization has declined by 15 per cent. During the same period, the total market capitalization of the Tata group has fallen by 13.3 per cent. In this way, the price of TCS shares will perform less than the entire group for the fifth consecutive year.

The company was listed in 2004 and since then its share prices had not been at the lower levels for so long. By the end of March 2024, the joint market capitalization of Tata Group companies was Rs 30.7 lakh crore, while the TCS figure was Rs 14.05 lakh crore in comparison. Comparison, TCS was listed on August 25, 2004 with a market capitalization of Rs 47,232 crore and its share in the total market capitalization of the Tata group was 49 per cent.

Apart from market capitalization, TCS’s stake in the total profits of the group has also decreased. In FY 2025, TCS is estimated to contribute around 55 per cent to the group’s 23 listed companies in joint net profit. This figure was 64 percent in FY 2023. However, its contribution to the group’s income in FY 2025 is more than 47.1 per cent in its decade in FY 2024 than 47.1 per cent. The analysis is based on Bloomberg’s estimate of Bloomberg and 9 months of FY 2025 regarding Tata Group’s other companies for the fourth quarter of TCS in FY 2025 and the fourth quarter of FY 2025.

In FY 2025, TCS had a net profit of Rs 48,519.8 crore, which has increased at the lowest speed with an increase of 4.1 per cent per annum in the last four years. The company’s net sales increased by 6 per cent to Rs 2.55 lakh crore in FY 2025. This was the lowest increase in sales in the last four years. In comparison, the joint net profit of the Tata group listed companies is estimated to be Rs 89,000 crore in FY 2025, which may be up to 10 per cent on an annual basis. According to analysts, the weakening of TCS will affect the financial situation of Tata Sons.

First Published – April 20, 2025 | 10:34 pm IST