Move over, USA and China. India’s top tech company just broke the $100 billion net worth mark. Tata Consultancy Services (TCS), part of the Tata Group, rose their valuation to this massively impressive number. This makes the tech company the first Indian company to break such a barrier in over a decade. And only the second one to date.
TCS Steps in the Right Direction
According to FactSet data, Reliance Industries, owned by the country’s richest man Mukesh Ambani, is the only other company from India to break a net worth value of $100 billion. This happened in 2007, but the company has since slipped back to about $89 billion—albeit still impressive.
TCS, however, is now one of the country’s biggest conglomerates. They sell a wide range of pretty much everything, be it salt or even automobiles. They even own major names like Jaguar Land Rover.
Chief Executive Officer Rajesh Gopinathan stated the company is “delighted and thankful to our employees and customers who have been instrumental in achieving this milestone.” The company reached more than just a milestone when they beat expert analysts’ predictions after revealing quarterly revenues of nearly $5 billion, boosting the company’s shares to 4% on the first Monday of their announcement and as high as 7% by Thursday of the same week.
The success of TCS impressed analysts. “(Their) strategy has been in the right direction,” said Gartner analyst DD Mishra. Facing many challenges in both India and elsewhere, with a massive surge in tech all over the world, TCS shows no signs of slowing down.
One of their main challenges is that the company turned out to be the biggest recipient in India for the H-1B work visa program in the United States, using up a surprising 70% of it. This is the same work visa program that has been causing plenty of disruption in the US workforce. TCS however revealed they are now dramatically decreasing their H-1B dependence and hiring more local workers. In the company’s latest annual report, Human Resources Vice President Ajoy Mukherjee revealed the company hired 11,500 new employees outside India in the last financial year.
India’s Tough Financial Times
India has been going through interesting times over the last few years. While it has been undoubtedly tough, there are actions such as having at least two information technology (IT) unions. The New Democratic Labour Front–IT Employees Wing (NDLF-IT Wing) and TCS [which eventually also rebranded itself as the Forum for IT Employees (FITE) at one point], as other unions, allow the country’s $150 billion IT sector to become unionized, thus protecting the country’s 3.9 million people who work in the industry.
This disruption is also coupled by the fact that large global names like Accenture want to outspace India’s own IT bigwigs, namely TCS, Infosys Ltd., Cognizant Technology Solutions Corp., and Wipro Ltd.—estimating to add about $3.63 billion in incremental revenue. With such promise, Accenture may become the first non-heritage company to have such a performance in India.
Their strong performance easily rival’s India’s own top four combined. Accenture’s expected incremental revenue of $3.63 billion tops the dollar revenue growth, as TCS trails with $1.446 billion. Not too far behind is Cognizant with $1.308 billion. Additionally, Infosys has $671 million while Wipro $386 million. All this information is from Mint research data. In detail, the growth of Accenture, Cognizant, and Infosys comes from BMO Capital Markets, while that of TCS and Wipro comes from BNP Paribas.
However, the Indian IT market over the past year is still impressive on its own. Its export revenue for IT services takes the lead at approximately $66 billion. BPM has $26 billion. Meanwhile, software products and engineering services have $25 billion. Additionally, India’s IT industry market size is positively increasing, both in domestic ($37 billion) and export ($117 billion). This represents an 11.14% increase between 2010 and 2017. As such, the country’s massive IT sector may not feel as much of a threat from Accenture and other outsiders after all.