Tata Group's combined market capitalisation crossed Rs 30 lakh crore on February 6, making it the first Indian business house ever to hit the milestone. The surge in shareholder wealth has been driven by buying interest seen in Tata Consultancy Services, Tata Motors Tata Power and Indian Hotels shares this year.
Tata Consultancy Services Ltd surged over 9 percent so far in 2024 while Tata Motors Ltd advanced over 20 percent. Tata Power jumped 18 percent while Indian Hotels gained 16 percent. The Tata Group has 24 companies listed on exchanges.
Meanwhile, Tejas Network, Tata Elxsi and Tata Chemicals dropped over 10 percent so far this year while the remaining stocks gained in the range of 1-5 percent.
TCS reached a new high on February 6, surging over 4 percent and crossing the market cap of Rs 15 lakh crore. The boost is attributed to encouraging deal wins in Q3FY24, with a total contract value of $8.1 billion, up 3.8 percent from the previous year. The management expressed confidence in long-term growth, anticipating client investments to increase as the challenging macro conditions subside.
TCS recently announced a 15-year partnership expansion with Aviva, a UK insurance leader, aiming to transform the "UK Life business." Though the deal size is undisclosed, sources suggest it's a mega deal, typically exceeding $500 million. This follows a seasonally weak quarter for TCS with no large reported deals.
Tata Motors stock witnessed a surge in the past month driven by strong earnings with contributing factors like the easing impact of semiconductor chip shortage, lower raw material prices and robust demand. The company achieved a notable 27 percent YoY volume growth and a substantial 22 percent YoY revenue growth with the Jaguar Land Rover (JLR) division posting a remarkable 16.2 percent EBITDA margin.
Despite ongoing chip challenges, JLR's supply has improved, reducing order backlog. The domestic business showed in-line results, with a 19 percent revenue growth and a significant 270-basis point expansion in EBITDA margin. New model launches and strong demand are expected to boost future volumes. The management is optimistic about sustained demand in the Indian market, driven by economic recovery and government emphasis on infrastructure development. The PV business is anticipated to continue its momentum with a projected industry growth of 5-7 percent in FY24, analysts said.
Tata Power has shown growth in 2024, aligning with the trend in the power and energy sector. The anticipation of additional momentum stems from the government's increased emphasis on expanding renewable energy use in the Interim Budget 2024. As one of the leading private sector players, Tata Power boasts a substantial clean energy portfolio of 5,500 MW, covering solar, wind and hydropower.
Indian Hotels sustained strong performance across key metrics, driven by robust demand. The optimistic future outlook from management is encouraging, leading analysts to anticipate a robust earnings trajectory in the coming years, supported by various growth factors.
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