It is $100 billion and counting. There is no stopping the iconic Indian technology services provider and exporter Tata Consultancy Services (TCS) that has catapulted itself into the super league. The achievement is special because there has been no compromise of its reputation for professional excellence and corporate ethics that are the hallmarks of the Tata group.
The Mukesh Ambani group touched $100 billion-plus in market capitalisation way back in 2008, along with a few other Indian companies. With TCS – India’s most valuable company – touching new heights, the jubilation in the markets and corporate circles continues. If analysts are to be believed, the energy conglomerate has all the potential to rescale the heights to join TCS at the high table. Telecom services and technology may again be the contributors, if RIL were to make it on the strength of a large diversification plan. That, however, is another story.
Having overtaken major global companies like Accenture, Cognizant, and HCL Technologies, the target for Tata group chairman Natarajan Chandrasekaran should be to match Oracle, IBM and SAP, its global peers. Going beyond market capitalisation, the objective of TCS should be to provide value offers across the chain to the global IT services industry. Unless TCS intelligently expands its bouquet of offering, moving up further will pose a big challenge. While doing so, TCS cannot let down its shareholders who have applauded and benefited from annualised returns of 21.1 per cent since 2004, the highest in the sector. Already, TCS has overtaken several global companies while making itself attractive for shareholders. Ultimately, profitability is what matters for an enterprise.
The latest achievement of TCS becomes clear when placed against some notable comparisons. Consider the fact that over 128 countries have GDP of less than $ 100 billion; TCS market capitalisation is $20 billion to $25 billion more than the value of all the stocks traded on the Pakistan Stock Exchange; TCS market cap of Rs 6.7 lakh crore is about 27 per cent of the entire spending announced by finance minister Arun Jaitley in his budget of 2018-19 at Rs 24.42 lakh crore. And, hold your breath, TCS market cap is more than the combined defence budget of both India and Japan reported at $52.5 billion and $45 billion respectively in 2017.
TCS has now joined the 100 top global companies at 97th position. In fact, the TCS has become the most valued Indian enterprise at a time when the global services businesses is facing huge hurdles like non-tariff trade barriers and inflexible policy regimes especially in the US and Europe while anti-globalisation drives have picked up momentum.
As Indians take a bow, the policy matrix will have to target creating at least 20 such home-grown enterprises, one each in twenty industry segments over the next five years. TCS has its task cut out. The company cannot rest on its laurels. It must build on its achievements and evolve an ecosystem for Brand India on the global scene. The surest way to achieve this is doing business based on ethics, providing value to the company’s shareholders while setting the highest standards of corporate governance.