Tata Consultancy Services (TCS), once the clear leader in India’s IT sector, has seen its valuation premium disappear after nearly 14 years. The company’s price-to-earnings (P/E) ratio has dropped to 22.5 times, falling below Infosys (22.9 times) and HCLTech (25.5 times). This marks a major shift in how investors view the country’s largest software exporter.
TCS’s market capitalisation has fallen sharply, signalling weaker investor confidence. The company has lost almost 27% of its value since reaching its record high in September 2024, compared to a 20% decline for the top five IT firms combined.
As of now, TCS’s market value stands at around ₹11.3 trillion, while the total value of the top five IT companies together is about ₹26.1 trillion, down from ₹32.7 trillion last year.
This steep fall has led to a sharp drop in TCS’s valuation multiple from 32.6 times a year ago to 22.5 times currently. While the overall IT sector also saw lower valuations, TCS’s decline has been the deepest.
One of the key reasons for TCS’s weaker performance is its slower profit growth. Over the last year, TCS’s net profit grew only 4.4%, compared to about 6% growth for the top five IT companies together.
TCS reported a net profit of ₹50,294 crore over the past 12 months, but it also faced shrinking profit margins. These trends suggest that the company’s growth momentum has slowed more sharply than its peers, leading investors to reassess its long-term prospects.
TCS has recently secured several major international contracts, primarily focused on digital transformation and AI. In the past month, key wins include extended partnerships with Morrisons (UK) for digital acceleration and ABB (Global) for AI-driven IT operations, alongside new strategic deals with Lion (Australia/NZ) and SINTEF (Norway) for AI solutions.
Read more: Tata Motors Passenger Vehicles (TMPV) Date Announced: November 14, 2025.
TCS’s fall from its premium position highlights investor concerns about its slowing profits and weaker margins. While it remains a strong player in the IT industry, TCS will need to accelerate earnings growth and restore investor confidence to regain its valuation edge over peers like Infosys and HCLTech.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Nov 13, 2025, 11:05 AM IST
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