Valuation of India's top IT companies way above earnings growth trend

Combined m-cap of top five firms up 87% since March '20, against 6.2% net profit growth in FY21

India’s top IT companies have shown a hiatus between their performance on the bourses in the pandemic period and earnings growth.

The combined market cap of the top five IT companies — Tata Consultancy Services, Infosys, Wipro, HCL Technologies, and Tech Mahindra — is up 87 per cent since the end of March 2020.

In comparison, the benchmark BSE Sensex is up 68 per cent during the period. So the industry beat the broader market by a big margin in the last one year.

In contrast to this, top IT companies were a laggard in terms of earnings growth in FY21.

The combined net