TCS, Tata Motors, Tata Power propel Tata Group’s m-cap to ₹30 lakh cr

Tata Group on Tuesday achieved a new milestone as the combined market capitalisation of the software-to-salt conglomerate crossed ₹30 lakh crore, accounting around 8% of the BSE's total market capitalisation of ₹392.21 lakh crore. With this, the 155-old company became the first Indian business house ever to secure this feat, while Mukesh Ambani’s Reliance remained the country’s second largest business conglomerate with a combined group market cap of over ₹21 lakh crore, followed by Gautam Adani-led Adani group with a cumulative market value of around ₹15 lakh crore.

Out of 18 major listed entities of Tata Group, barring Tata Power, The Indian Hotels Company, and Tata Teleservices, all firms ended in positive terrain on Tuesday. Tata Technologies, the engineering unit of Tata Motors that recently made its debut on domestic bourses, was the top performer among the group entities with a 4.6% gain.

Tata Consultancy Services (TCS), which contributes over half of Tata Group’s mcap, surged 4% to close at a new record high of ₹4,133.45 on the BSE after the company said that it secured a new deal from global travel insurance firm Europ Assistance to transform its IT operating model using artificial intelligence and machine learning. The m-cap of the country’s most valued IT firm crossed ₹15 lakh crore for the first time to close at a record high of ₹15.12 lakh crore.

Tata Coffee shares settled 3.6% higher, while Tata Steel, Tata Motors, and Tata Chemicals rose 2.2%, 1.36%, and 1.3%, respectively.

Among others, Tata Consumer, Tata Elxsi, Tata Metalik, Tata Communications, and Nelco rose in the range of 1-2%, while Titan, Voltas, Trent, Tata Investment, Tejas Networks ended with modest gains.

In the last four months, the m-cap of Tata group increased by ₹5 lakh crore from ₹25 lakh crore as on September 18, 2023, driven by strong rally in heavyweights such as TCS, Tata Motors, Tata Power, and Indian Hotels. The share price of TCS has risen over 18% in the last six months, while Tata Motors, the conglomerate’s second most valued firm, zoomed over 54% during the same period. Titan and Tata Power, the group’s third and fourth biggest companies in terms of mcap, rallied 23% and 69%, respectively, in the past six months.  

The recent rally in Tata group shares can be attributed to healthy earnings and brand “Tata”, which enjoys special preference amongst investors.

In the third quarter ended December 31, 2023, TCS posted 2% year-on-year growth in net profit to ₹11,058 crore compared with ₹10,846 crore in the year-ago period. Consolidated revenue increased 4% year-on-year to ₹60,583 crore in the third quarter as against ₹58,229 crore in the corresponding quarter last fiscal.

Tata Motors also reported better than expected results in Q3 FY24, driven by robust India business and improvement in the performance of Jaguar Land Rover (JLR), while easing raw material costs and price hikes boosted profit margins. The auto major posted a 137.5% growth in consolidated net profit at ₹7,025.11 crore in Q3 FY24, against ₹2,958 crore in the year-ago period. The consolidated revenue increased 25% to ₹1.11 lakh crore against ₹88,489 crore in the same period last year.

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