TCS loses valuation premium to Infosys, HCLTech after 14 years on top

TCS loses its premium edge as slower profit growth and margin pressure pull its P/E below rivals for the first time since 2011

After being the industry bellwether for more than a decade, information-technology (IT) major Tata Consultancy Services’ (TCS’) equity valuation has slipped below that of peers such as Infosys and HCLTech. 

TCS is trading at a trailing price-to-earnings (P/E) multiple of 22.5X, lower than Infosys’ 22.9X and HCLTech’s 25.5X. 

This is a reversal for the country’s largest IT services exporter, which led industry valuation for nearly 14 years —  between 2011 and early this year. In those years, TCS traded, on average, at a trailing P/E multiple of 25.5X, at nearly a 15 per cent premium to the industry average of