Tata Consultancy Services (TCS), long regarded as the bellwether of India’s IT-services industry, has lost a key valuation advantage: its equity valuation now stands below those of its peers Infosys and HCL Technologies for the first time since 2011.

Key Highlights

• TCS valuation drops below Infosys and HCL Tech for the first time since 2011.
• Investors cite slower growth and margin pressures as key reasons for TCS’s valuation decline.

TCS is currently trading at a trailing price-to-earnings (P/E) multiple of approximately 22.5×, whereas Infosys is at about 22.9× and HCL Technologies at 25.5×. For more than a decade—between 2011 and early 2025—TCS had commanded a premium, trading on average at around 25.5× earnings, nearly 15 % above the industry average of 22.2×.

The shift reflects mounting investor concerns about TCS’s earnings growth and margin pressures, particularly in comparison to its peers. In recent quarters, TCS reported a net-profit growth of just 4.4 % year-on-year, lagging behind the combined 6 % growth of the top five Indian IT services companies in the same period. Meanwhile, TCS’s market capitalisation has slipped markedly: it has fallen nearly 27 % from its September 2024 lifetime high, and as of now TCS’s market value (~₹11.3 trillion) represents about 43.4 % of the combined market capitalisation of the top five IT firms—down from 55 % in March 2020.

Analysts attribute the valuation slide to multiple factors: slower revenue growth and margin contraction at TCS, together with a broader derating of the Indian IT services sector post-pandemic. For instance, TCS’s P/E multiple has dropped from 32.6× at the end of September last year to 22.5× now. In contrast, some of its peers have shown relatively more resilience or better investor expectations.

Also Read: TCS Shareholders Face Rs 4 Lakh Crore Loss in 2025

Going forward, while TCS management expects FY26 growth to be better than FY25, brokerage houses describe the guidance as somewhat “fuzzy” amid ongoing global IT demand challenges.

In sum, TCS’s diminished valuation premium signals not only a notable shift for the company itself, but also highlights changing investor sentiment within India’s large-cap IT sector, where dominance and historic leadership are increasingly subject to performance and market expectations.