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The Tata Group's combined market capitalization surpassed Rs 25 lakh crore, thanks in part to Tata Consultancy Services (TCS) winning a significant deal with Jaguar Land Rover (JLR).
TCS, the cash cow of the Tata conglomerate, has seen its shares rise by up to 16% since their April lows. This resurgence occurs as large IT companies regain investor favor due to attractive valuations.
Between January 2022 and April 2023, the Nifty IT index, which tracks software stocks, fell 32%, owing primarily to lower revenue growth forecasts by IT firms. TCS followed a similar pattern, with its stock falling 26% from its January 2022 highs.
Conversely, TCS recently announced a significant win in the form of a five-year, $1 billion Total Contract Value (TCV) deal with JLR. This transaction is expected to generate $200 million in revenue for TCS each year.
When combined with other significant deals, such as the $1.8 billion BSNL deal and the $1 billion Nest deal, TCS could see a 3.5% increase in Q3 growth and a 1.8% increase in both FY24 and FY25 growth, according to J.P. Morgan, assuming ramp-ups start in Q3. The Tata Group's remarkable journey continues, with its companies demonstrating flexibility and resilience in an unstable market environment.
Also read, Tata Motors Commits to Diesel Vehicles Amid GST Debate
