TCS: The Most Valuable IT Services Company in the World
Case Code: CLFIN026
Case Length: 6 Pages
Pub Date: 2021
Teaching Note: Available
Organization : Tata Consultancy Services Ltd.
Industry : IT services, IT consulting
Countries : India
Themes: Corporate Finance,Stock Market, Valuation
The case study discusses India’s leading IT services company – Tata Consultancy Services Ltd.– becoming the most valuable IT services company in the world in October 2020, surpassing Accenture Plc (Accenture) in terms of market capitalization. This case is mainly useful in understanding market capitalization and various related concepts. It helps in understanding the significance of market capitalization, its determinants, and how to calculate market capitalization and free-float market capitalization of any public listed company with real data.
- To understand the significance and determinants of market capitalization.
- To understand how to calculate market capitalization with the help of real data.
- To understand the importance of free-float market capitalization and how to calculate it.
On October 8, 2020, Tata Consultancy Services Ltd. (TCS), India’s leading IT services company, became the most valuable IT services company in the world surpassing Accenture Plc (Accenture). TCS’s market cap stood at US$144.73 billion whereas Accenture was valued at US$143.4 billion on NASDAQ (Refer to Exhibit I for graph related to market cap of both companies). Analysts stated that the share price of TCS had gone up due to its better than expected financial performance in the second quarter of the financial year 2021 and the announcement of Rs. 160 billion worth of share buyback. Experts opined that there was a possibility that TCS might lose its leading position to Accenture if the company was unable to sustain its performance in the post-COVID period...
"Financial Performance; Market Capitalization; Market Cap; Free-Float Market Cap; TCS; Accenture; Significance of Market Cap; Determinants of Market Cap; Estimation the Market Cap
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