Tata Group first Indian Conglomerate to cross Rs 30 lakh Crore Market cap

The Tata Group achieved a historic milestone as its collective market capitalization surpassed Rs 30 lakh crore, marking a first for any Indian business conglomerate. This surge in shareholder value was propelled by increased buying activity in shares of Tata Consultancy Services, Tata Motors, Tata Power, and Indian Hotels throughout the current year. Notably, Tata Consultancy Services Ltd recorded a growth of over 9 percent, Tata Motors Ltd advanced by more than 20 percent, Tata Power saw a jump of 18 percent, and Indian Hotels gained 16 percent. The Tata Group boasts 24 listed companies on various stock exchanges.

On the other hand, Tejas Network, Tata Elxsi, and Tata Chemicals experienced declines exceeding 10 percent since the beginning of the year, while the remaining stocks saw gains ranging from 1 to 5 percent. Notably, TCS reached a new milestone by surging over 4 percent and surpassing a market capitalization of Rs 15 lakh crore. This surge was fueled by promising deal wins in Q3FY24, with a total contract value of $8.1 billion, marking a 3.8 percent increase from the previous year. The management expressed optimism regarding long-term growth, foreseeing a rise in client investments as challenging macroeconomic conditions ease.

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 persistent chip supply challenges, Jaguar Land Rover (JLR) has seen an improvement in its supply situation, resulting in a reduction in order backlog. The domestic business has demonstrated in-line performance, marked by a notable 19 percent revenue growth and a significant expansion of 270 basis points in EBITDA margin. Anticipation of new model launches and robust demand is expected to drive future volume growth. Management remains optimistic about sustained demand in the Indian market, buoyed by economic recovery efforts and the government's focus on infrastructure development. Analysts foresee the passenger vehicle (PV) segment maintaining its momentum, with an estimated industry growth rate of 5-7 percent in FY24.

In 2024, Tata Power has experienced growth, aligning with the prevailing trend in the power and energy sector. The expectation of further momentum is rooted in the government's heightened focus on expanding the utilization of renewable energy, as highlighted in the Interim Budget 2024. As a prominent player in the private sector, Tata Power possesses a significant clean energy portfolio of 5,500 MW, encompassing solar, wind, and hydropower. Indian Hotels has sustained strong performance across key metrics, fueled by robust demand. The optimistic future outlook conveyed by management is encouraging, prompting analysts to anticipate a resilient earnings trajectory in the upcoming years, supported by various growth drivers.