Thanks to its strong performance, TCS now contributes over 61% to the group's market cap compared with just 33% five years ago
Since its listing on August 25, 2004, Tata Consultancy Services BSE 0.41 % (TCS) has spearheaded the Tata Group, given its billing as the company with the largest market capitalisation among the group companies.
Thanks to its strong performance and the poor show by group companies across steel, power and telecom sectors, TCS BSE 0.41 % now contributes over 61% to the group's market cap compared with just 33% five years ago.
The higher weightage of the company, which is also the nation's largest IT exporter, also means it has largely driven the gain of 19% on an annualised basis in the past five years in the aggregate market cap of the top 10 group companies. TCS delivered 34% annualised return between 2008 and 2013 considering the market cap of Rs 3,47,230 crore on Monday, offsetting to a great extent the loss in the market cap of Tata Steel BSE -1.46 % and Tata Power.
A look at the market cap of Tata Group companies over the past 20 years reveals a declining trend in the dominance of manufacturing sectors. For instance, in 1995, Tata Steel was the largest group company with a market cap of Rs 4,280 crore followed by Tata Chemicals (Rs 2,473 crore) and Tata Motors BSE 2.14 % (Rs 702 crore).
Almost two decades later, though Tata Steel's market cap has grown five-fold to Rs 20,949 crore, the company has slid to the fourth spot in the list of the top 10 group companies.
Thanks to its strong performance and the poor show by group companies across steel, power and telecom sectors, TCS BSE 0.41 % now contributes over 61% to the group's market cap compared with just 33% five years ago.
The higher weightage of the company, which is also the nation's largest IT exporter, also means it has largely driven the gain of 19% on an annualised basis in the past five years in the aggregate market cap of the top 10 group companies. TCS delivered 34% annualised return between 2008 and 2013 considering the market cap of Rs 3,47,230 crore on Monday, offsetting to a great extent the loss in the market cap of Tata Steel BSE -1.46 % and Tata Power.
A look at the market cap of Tata Group companies over the past 20 years reveals a declining trend in the dominance of manufacturing sectors. For instance, in 1995, Tata Steel was the largest group company with a market cap of Rs 4,280 crore followed by Tata Chemicals (Rs 2,473 crore) and Tata Motors BSE 2.14 % (Rs 702 crore).
Almost two decades later, though Tata Steel's market cap has grown five-fold to Rs 20,949 crore, the company has slid to the fourth spot in the list of the top 10 group companies.
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Soaring prices of gold over the past two years helped Titan Industries BSE -0.35 % jump to the third spot on the list with a market cap of Rs 23,078 crore from the 11th position five years ago. It had a market cap of just over Rs 30 crore in 1995.
The success of JLR in the Chinese market raised the market cap of Tata Motors three-fold in five years to Rs 81,016 crore. Considering the government's efforts to discourage gold purchase by imposing higher import duty, Titan may find it difficult to repeat the performance. The same can be true for Tata Motors as Chinese demand tapers with a slowing local economy.
Other group companies such as Tata Communications BSE -0.76 % , Tata Steel and Tata PowerBSE -0.96 % are facing difficulties in execution pertaining to respective sectors and may tend to perform poorly on bourses as industrial demand dwindles.
TCS, on the other hand, appears to be on a strong footing given its focus on adding new capabilities through prudent acquisitions and efficient operations.
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