Infosys vs TCS: A Comparative Analysis of IT Giants
In the changing era of the IT sector, TCS and Infosys stand as rocks and are each other’s biggest competitors. Let’s look at how these companies are growing in the market.
Infosys
As of 20th February 2024, Infosys is the second largest IT company, established in 1981 in India by Narayana Murthy. In 2023, the company served 56 countries in over 234 locations. The company boasts a market capitalization of Rs 6.99 trillion (as on 20th February 2024) and has ranked second to the largest IT company in the nation, TCS.
Infosys serves various industries, like consulting, IT service, maintenance, etc. The company invests in emerging technologies and startups for strategic solutions that will benefit its clients.
The company’s important statistical data is represented below:
| Market Cap | ₹ 6,99,469 Cr. |
| TTM P/E | 28.68 |
| ROCE | 44.60% |
| Current Price | ₹ 1,685 |
| Book Value | ₹ 181.7 |
| ROE | 31.90% |
| 52 Week High | ₹ 1,733 |
| 52 Week Low | ₹ 1,185 |
| Dividend Yield | 2.04% |
| Face Value | ₹ 5.00 |
Tata Consultancy Services (TCS)
Tata Consultancy Services, or TCS, is the largest IT company in India and was founded in 1968 in Mumbai, Maharashtra. It is one of the top 10 IT companies in the world. TCS has a global presence where it provides IT services, consulting, business solutions, network solutions, data & analytics, etc. The organization serves more than 46 countries and operates in 150 locations.
The company’s essential statistics for 2024 are shown below:
| Market Cap | ₹ 14,58,324 Cr. |
| TTM P/E | 32.51 |
| ROCE | 64.40% |
| Current Price | ₹ 4,030 |
| Book Value | ₹249.9 |
| ROE | 46.60% |
| 52 Week High | ₹ 4,185 |
| 52 Week Low | ₹ 3,070 |
| Dividend Yield | 2.85% |
| Face Value | ₹ 1.00 |
Overview of the IT sector
These companies are asset-light and cash-rich because they provide IT related services, such as cloud management, cybersecurity, consulting, software services, and network setup, which do not require a an extensive infrastructure network.
As of 20th February 2024, the weightage of the IT sector in Nifty50 is 14.18%, and the average contribution of IT to the GDP of India stands at approximately 7.4%. The IT and Business Process Management (BPM) also account for 56% of the global outsourcing market.
There are two major groups within the IT industry: software and services and technology hardware and equipment. The Indian IT business service market is expected to reach ₹34.9 lakhs crore by 2029. TCS and Infosys are not the only players who will push this number in the coming years; there are other companies also who will be playing a major role, such as L&T Infotech Ltd., HCL Technologies, Wipro, Tech Mahindra, Mphasis Ltd, and many more.
Comparative Analysis
Financial Statement Analysis
| Particulars | Infosys | TCS |
| Q3 – FY 2024 | Q3 – FY 2024 | |
| Revenue (₹ Crores) | 38,821 | 60,583 |
| Change in Revenue (YoY) | 1.30% | 4% |
| Change in Revenue (QoQ) | -0.40% | 1.50% |
| Change in Revenue in Constant Currency (YoY) | -1% | 1.70% |
| Net Profit (₹ Crores) | 6,113 | 11,097 |
| Change in Net Profit (YoY) | -7.20% | 1.96% |
| Change in Net Profit (QoQ) | -1.70% | -2.48% |
| Employee Count | 3,22,663 | 6,03,305 |
| Change in Employee | -6,101 | -5,680 |
Artificial Intelligence
Both of the companies are extensively focused on driving the growth of AI. Infosys Topaz is an AI-first set of services, solutions and the platforms using generative AI technologies. While Infosys Cobalt is a combination of services, solutions and platforms for enterprises to enhance their cloud journey.
According to TCS’ website, AI and Cloud led the demand across the Service line, with solid momentum sustaining Cloud migration and increasing customer interest for AI and Generative AI.
Conclusion
The comparative analysis reveals the strengths of Infosys and TCS. While Infosys demonstrates a focus on emerging technologies and client-centric solutions, TCS maintains a dominant position (in terms of revenue and market cap) with a broad spectrum of services and a more substantial global presence. Despite facing challenges in growing net profit, both companies exhibit robust financial metrics and a commitment to AI-driven innovation.
As the IT sector evolves, Infosys and TCS are well-positioned to navigate future trends and sustain their leadership in the competitive market.
Frequently Asked Questions (FAQs)
- How many employees work at TCS and Infosys?
While Infosys ended the December quarter with 3,22,663 employees, TCS ended the third quarter with an employee base of 6,03,305.
- Who is the parent company of TCS?
Tata Consultancy Services (TCS) is a subsidiary of Tata
- How big is TCS in comparison to Infosys?
TCS has a market cap of Rs. 14.6 lakh Crores, while Infosys has a market cap of Rs. 6.99 lakh Crores.
- When did TCS and Infosys start?
TCS started in 1968 and Infosys started in 1981.
- What are the top 5 IT companies in India?
The top 5 IT companies (in terms of market cap) in India are – TCS, Infosys, HCL Technologies, Wipro, and LTIMindtree.
Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.
