I am a long-term investor hold
V S Fernando
I am a long-term investor holding both Infosys and TCS. Between the two, can you please advise which one offers more value?
V Raghunathan, Trichy, Tamil Nadu.
Infosys Technologies Ltd (Infosys), having preceded TCS to the capital market by over 10 years, carved out a niche for itself well before its peer entered the public domain. However, it is now almost two years since TCS, the largest Indian software company, debuted on the bourses. A comparison between TCS and Infosys - on management, profitability, performance indicators as well as business model - thus becomes important from the investors point of view.
TCS and Infosys took two different routes to stardom. TCS was the visionary product of the reputed Tata business empire, which foresaw tremendous potential for offering IT services at a time when computing was in its infancy. TCS had the support and financial backing of the premier business group in the country during its formative years, which it more than repaid by generating a large amount of cash in the last decade and in the process enabling its promoters to protect or up their stake in other businesses. TCS entered the bourses only when it felt it needed a currency in the form of its listed security to sustain its growth ambitions.
Infosys, on the other hand, was promoted by a little known group of professionals led by Narayana Murthy seeking to make it big but backed by only ambition and drive. Few investors would know that Infosys struggled to make a success of its IPO in February 1993. But soon, the stutter gave way to smooth transition and traction as its growth engine picked up momentum. Infosys not only set the market afire through its stellar financial performance year after year but ...