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Eternal has overtaken Tata Consultancy Services (TCS) in terms of weightage in the Nifty 50, highlighting a notable shift in the index towards consumer internet and growth-oriented companies. Eternal's weight stands at around 2.29%, compared with roughly 2.08% for TCS, according to data as of 30 September 2026. The shift, however, does not mean Eternal is a larger company than TCS. The difference is largely explained by the free-float market capitalisation methodology used to calculate Nifty 50 weights. Eternal has a much larger proportion of its shares available for public investment, while a significant portion of TCS is held by its promoter, Tata Sons. As a result, the portion of TCS's market capitalisation considered for the index is substantially lower than its total market value. Naren Agarwal, CEO of Wealth1, said Eternal's higher Nifty 50 weight is primarily due to free-float. While TCS has a market capitalisation of around ₹7.5 lakh crore, more than twice Eternal's roughly ₹3.1 lakh crore, Tata Sons owns close to 72% of TCS, leaving a much smaller portion available for index calculation. Eternal, on the other hand, does not have a promoter holding of a similar scale, resulting in a significantly higher investable market capitalisation. The stock's recent performance has further widened the difference. TCS has fallen more than a third from its 52-week high of ₹3,350, while Eternal has continued to command a higher valuation, Agarwal noted. This has an important implication for passive investors. Since Nifty 50 funds and exchange-traded funds track index weights, a higher weight for Eternal means passive funds need to allocate more capital to the stock, while the relative allocation to TCS is lower. The change also highlights the contrasting investment narratives surrounding the two companies. Agarwal pointed out that the index now assigns a higher weight to Eternal despite the stark difference in their earnings. Eternal reported quarterly profit of around ₹92 crore, compared with about ₹13,420 crore for TCS. The divergence, therefore, reflects the market's willingness to assign a substantial premium to future growth potential, particularly Eternal's quick-commerce business Blinkit, rather than simply rewarding companies based on current profitability. However, Agarwal cautioned that the relative valuation gap ultimately depends on the growth assumptions embedded in both stocks. “TCS, in the mid-teens on trailing earnings with a 3% dividend yield, is priced for near-zero constant-currency growth,” he said, adding that Nuvama expects 0.6% sequential growth in TCS's Q2 results. By comparison, Eternal trades at more than 650 times trailing earnings, with the valuation reflecting expectations of sustained growth in Blinkit's business. Agarwal said the relative gap could widen if Blinkit's unit economics remain strong while IT services growth remains subdued. Conversely, stronger AI-led deal wins for TCS or renewed pricing pressure in quick commerce could narrow the valuation differential. Prathamesh Kadival, Research Analyst at Bonanza, said Eternal's Nifty 50 weight has risen to around 2.29% compared with about 2.08% for TCS, with the difference driven by the free-float market capitalisation methodology. According to Kadival, the shift points to a broader change in market preferences, with consumer internet and consumption-led growth companies gaining greater representation relative to traditional IT majors. The higher index weight also has a mechanical impact on passive flows, he noted. Nifty-tracking funds will need to maintain a relatively larger allocation to Eternal, potentially making its stock movements more relevant for the broader index. At the same time, the change should not be interpreted as an indication that Eternal is fundamentally larger than TCS, since index weight is determined by investable market capitalisation rather than total market capitalisation or earnings. Gaurav Arora, Head of Research at SAHI, also highlighted the distinction between index weight and company size. He noted that Tata Sons' roughly 72% holding in TCS significantly reduces the company's free float, whereas Eternal has a much larger proportion of its equity available to public investors. Arora said the change nevertheless reflects a broader market preference for consumption-led growth stories, while IT stocks continue to face concerns related to AI-led disruption and softer demand. From an investment-style perspective, growth-oriented investors may find Eternal's growth opportunity more attractive, while value-focused investors may find TCS's lower valuation and dividend yield more appealing, Arora said. On the technical front, he sees ₹1,980– ₹2,000 as an important base for TCS. As long as the stock holds this zone, its broader structure remains stable, while a move above ₹2,150 would be required for a potential upside breakout, he added. The changing Nifty 50 weights underline an important point: index weightage alone does not determine which stock is a better investment. Eternal's higher weight reflects its free-float market capitalisation and strong market valuation, while TCS continues to have a substantially larger earnings base. For Eternal, investors will need to track Blinkit's growth, unit economics and the sustainability of its premium valuation. For TCS, the key factors remain IT spending, large deal wins, AI-led revenue opportunities and the pace of recovery in constant-currency growth. In other words, the Eternal-TCS weight reversal is as much a story about how the market values future growth versus established cash flows as it is about the Nifty 50's changing composition. Zomato, now operating under its corporate entity Eternal Limited, officially entered the benchmark Nifty 50 index on 28 March 2025. The inclusion marked a significant milestone for the company and highlighted the growing presence of new-age technology businesses in India's benchmark index. As part of the rejig, Zomato replaced FMCG major Britannia Industries, while Jio Financial Services replaced BPCL. Eternal's entry also marked one of the notable instances of a new-age Indian technology company being added to the NSE's top 50-stock index. The parent company rebranded itself as Eternal Limited in February 2025, while its consumer-facing businesses, including Zomato and Blinkit, continued to operate under their existing brand names. The company's leadership structure also evolved subsequently. Deepinder Goyal moved from Group CEO to Vice Chairman of Eternal Limited effective 1 February 2026, while Albinder Dhindsa took over as Group CEO. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions. Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
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