HCL Tech vs TCS: Which IT stock to buy today after Q3 results 2025? EXPLAINED
- HCL Tech vs TCS: Market experts noted that despite delivering a solid financial performance driven by a sharp uptick in deal wins, TCS and HCL Tech faced pressure due to higher expectations on the Street
HCL Tech vs TCS: After the announcement of October-December quarter results for fiscal 2024-25 (Q3FY25), India's leading information technology (IT) giants will be in focus during today's market session. Even as D-Street investors ponder which IT stock to buy, sell, or hold now, market experts have given a strong ‘buy’ rating for both Tata Consultancy Services (TCS) and HCL Technologies Ltd after their latest Q3FY25 earnings verdict.
Analysts noted that despite delivering a solid financial performance led by a sharp uptick in deal wins, both TCS and HCL Tech faced pressure due to higher expectations on the Street. India's largest IT services company, TCS, logged an impact on revenue, dragged by BSNL deal contribution. On the other hand, India's third-largest IT service major, HCL Tech, emerged as a top pick for experts due to its strong total contract value (TCV).
HCL Tech vs TCS Q3 Results
The IT behemoth, TCS, reported revenue of Rs. 63,973 crore, down 0.4 per cent quarter-on-quarter (QoQ) and up 5.6 per cent year-on-year (YoY). HCL Tech registered a topline growth of 3.6 per cent QoQ and 5.1 per cent YoY, at Rs. 29,890 crore. Market experts noted that the sequential uptick in HCL's topline is attributed to its product-led growth, while TCS's revenue remained under pressure as the BSNL deal contribution started to taper.
EBIT reflected a similar trend for both companies, with a sequential uptick followed by an annual decline (TCS: 24.5 per cent, up 40 bps QoQ / down 54 bps YoY; HCL Tech: 19.5 per cent, up 90 bps QoQ / down 37 bps YoY). The LTM attrition rate rose for HCL and TCS (13.2 per cent and 13 per cent, respectively). However, HCL made a net addition of 2,134, while TCS did not make any net addition to its workforce.
According to Sagar Shetty, Research Analyst at StoxBox, the TCV remained a key highlight during the December quarter. TCS registered a surprising uptick in deal wins at $10.2 billion (up 26 per cent YoY), while HCL Tech's TCV is at $2.1 billion (up 10.5 per cent), suggesting a favourable demand environment going ahead.
“While TCS and HCL Tech demonstrated solid financial performance, the market's high expectations and specific operational challenges influenced their results," said Shetty. “Going ahead, we maintain a positive outlook for both companies, backed by their market position. HCL Tech Ltd is one of our top picks amongst the tier I companies, guided by the upward revision of topline growth and an uptick in TCV,” added the market expert.
Shaji Nair, Research Analyst, Capital Market Strategy, Mirae Asset Sharekhan added that HCL Tech reported decent revenue growth of 3.8 per cent QoQ in constant currency but missed his estimates of 4.8 per cent QoQ with largely broad performance across geos and verticals.
The company raised the lower end of the guidance for FY25 to 4.5-5 per cent from 3.5-5 per cent while keeping margin guidance unchanged. “While the performance is healthy, the commentary on discretionary spending would be the key monitorable. The Q3 performance and revised guidance reflect that the company is on track to deliver industry-leading growth among Tier 1 IT companies for FY25. We have a Buy rating on the stock," said Nair.
HCL Tech vs TCS: Which IT stock to buy today?
Sumeet Bagadia, Executive Director at Choice Broking, recommends buying TCS at ₹4,291.10 with a target price of ₹4,591 at a stop loss of ₹4,140. TCS is currently trading at ₹4,291.10, exhibiting a robust uptrend. According to the expert, the stock has reversed strongly from lower levels, forming a bullish candle that indicates strong upward momentum.
Increased trading volumes support this reversal, confirming the move's strength. Furthermore, TCS is trading above its 20-day, 50-day, and 200-day EMAs, reflecting solid support across both short-term and long-term trends.
"The recent breakout above the key resistance level of ₹4,290 underscores continued momentum, which could propel the stock toward a potential target of ₹4,591. On the downside, immediate support is observed at ₹4,200. The Relative Strength Index (RSI) currently stands at 56.47 and is trending upward, signalling to grow buying interest in the stock," he said.
"To manage risk effectively, a stop-loss at ₹4,140 is recommended to protect against unexpected market reversals. Considering the favourable technical indicators and current market conditions, TCS presents a promising buying opportunity with a target of ₹4,591, provided appropriate risk management strategies are implemented," concluded Bagadia.
Shiju Koothupalakkal, Technical Analyst at Prabhudas Lilladher, highlighted that HCL Tech's share has hit an all-time high level of ₹2,002. It has maintained a strong uptrend for the last six months and has sustained above the significant 50-DEMA zone, presently positioned at ₹1,895.
“The RSI is also well placed and technically has much upside potential to carry on with the positive move. One can maintain a buy in this stock, keeping the stop loss of ₹1,895, and expect immediate targets of ₹2,190 and ₹2,280 once the near-term resistance zone of ₹2,050 mark is decisively breached,” said Koothupalakkal.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.
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