(Bloomberg) -- India’s waited 10 years to host another $100 billion corporation. Fittingly, the first company to attain that mantle in a decade is Tata Consultancy Services Ltd., the outsourcing giant that helped put the country’s best-known industry on the map.
India’s most valuable company achieved that milestone after gaining as much as 4.6 percent Monday in the wake of better-than-expected earnings. It’s now outstripped Goldman Sachs Group Inc. and joined the ranks of the world’s 100 largest corporations, based on Friday’s closing prices. The last Indian name to cross that threshold was Reliance Industries Ltd. -- the telecom-to-energy conglomerate controlled by billionaire Mukesh Ambani surpassed that barrier in 2008 when the rupee was at least 30 percent stronger than today.
TCS is the largest of a clutch of firms including Infosys Ltd. that pioneered modern IT outsourcing, by taking over many of the back-office support functions for household names from General Motors Co. to Citigroup Inc. Backed by the Tata Group, TCS and its peers built a thriving model adopted by much of the rest of the world -- and fostered the generations of software engineers that provided much-needed talent to Silicon Valley.
“It is an important milestone, which not only gives us something to cheer but also changes the perspective and sentiment toward other Indian software makers,” said Gaurang Shah, head investment strategist at Geojit Financial Services Ltd. in Mumbai. “As a brokerage, we have remained positive on India’s IT industry when most analysts treated it as untouchables. With TCS, our confidence in the sector has been reinforced.”
TCS’ industry, which today generates some $167 billion of revenue annually, is now going through a painful transition with the rise of automation, mobile, artificial intelligence and cloud computing -- converging trends that’ve pushed clients away from the labor-intensive back-office programming operations that Tata and its peers specialize in.
Analysts are betting that Tata is among the best-placed to make that transition. In the near term, though, TCS continues to grapple with soaring hiring costs as immigration curbs hamper its ability to move cheaper Indian workers into its largest market, the U.S.
©2018 Bloomberg L.P.