HCL Tech vs TCS: Which IT Stock Should You Buy After Q1 Results 2025?

Grab your chai, because we’re about to dive deep into their numbers, strategies, and what market experts are saying. This isn’t just a face-off of quarterly figures; it’s about long-term vision, margins, and the future of AI-led growth.

A Quick Glance at the Q1FY26 Showdown

Both TCS and HCL Technologies released their April–June quarter results recently, and investors on Dalal Street are buzzing. But here’s the million-dollar question: Which IT stock should you buy now—HCL Tech or TCS?

Spoiler alert: Many analysts are leaning towards TCS, but let’s not rush. We’ll break it all down.

HCL Tech’s Q1FY26 Performance: Strong Revenue, Weak Profit

Let’s talk about HCL Tech share price and performance first.

HCL Technologies, on July 14, reported a 9.7% decline in consolidated net profit, largely due to increased expenses and a one-off hit from a client’s bankruptcy. Yep, that’s a tough pill to swallow.

• Net Profit: ₹4,257 crore (down from last year)

• Revenue: ₹30,349 crore (up 8.1% YoY)

• Operating Margin: 16.3% (below expectations)

• Stock Movement: HCL share price closed 1.04% down at ₹1,619.95 on BSE

So, while revenue looks healthy, profitability is limping. The dip in margins is being blamed on delays in program ramp-ups and increased spending, especially in AI and Go-to-Market efforts.

But hold on—it’s not all gloomy.

TCS Q1FY26: Margins Shine, Growth Stays Stable

Now over to TCS, the dependable blue-chip of Indian IT.

Tata Consultancy Services reported a 6% YoY rise in net profit, hitting ₹12,760 crore. Revenue was ₹63,437 crore—a modest 1.3% increase YoY but down 3% in constant currency terms.

• Operating Margin: 24.5% (up 0.3% QoQ)

• Deal Wins: $9.4 billion (+13% YoY)

• Stock Movement: Stable post-results, reflecting market confidence

Margins are king in the IT world, and TCS is clearly wearing the crown. While growth is tepid globally, TCS is playing the long game—with consistent cash flow, robust AI investments, and steady order inflows.

What the Experts Are Saying

Analysts have weighed in, and the consensus? TCS is the safer, more defensive play, while HCL Tech offers higher growth potential with more risk.

Let’s break it down further.

Mohit Gulati (ITI Growth Opportunities Fund): TCS Has the Edge

According to Gulati, TCS wins this round thanks to:

• Superior margin profile

• Consistent profit trajectory

• Resilient performance across market cycles

HCL Tech, he says, still holds long-term promise but needs to sort out its margin concerns before becoming a “buy” again.

Vinit Bolinjkar (Ventura Securities): Margin Matters Most

Bolinjkar points out that TCS maintained margins, while HCL Tech struggled. He also mentions that some of TCS’s pending BSNL orders could boost next quarter’s performance.

Bhavik Joshi (INVasset PMS): A Tale of Two Strategies

Joshi gives a balanced view:

• TCS: Margin leader (24.5%), great cash conversion, low-risk profile

• HCL Technologies: Better revenue growth (8% YoY), digital/cloud growth, but margin pressure due to high AI investments

In short: TCS = stability, HCL Tech = growth with volatility.

TCS vs HCL Tech: By the Numbers

Why Are HCL’s Margins Falling?

Let’s address the elephant in the room: margin pressure.

HCL Technologies is going all in on Generative AI and digital transformation. That means big investments now, with hopes of long-term payoff. But in the short term, this is squeezing profits.

It’s kind of like building a mansion—you’re putting in a lot of cash upfront and hoping the final value justifies the spend.

Is HCL Tech a Value Buy Right Now?

That depends on your investing style.

If you’re the kind of investor who loves spotting undervalued gems before they shine, HCL Tech might be for you. Its strong revenue growth, investment in AI, and future-focused roadmap make it a solid long-term bet.

But if you’re risk-averse or looking for consistent performance, this may not be the time to dive in.

Also, don’t forget the market sentiment. With HCL Tech share price dipping post-results, it signals that investors are cautious about its near-term profitability.

TCS: The “Defensive Blue-Chip” for Your Portfolio

TCS is like that trusted old SUV—it may not be flashy, but it won’t let you down. With consistent margins, strong order books, and stable cash flows, it’s the stock to hold if you’re seeking low volatility.

Also, with a growing focus on AI, automation, and digital transformation, TCS is adapting well to the tech shifts. Not aggressively like HCL Tech, but steadily and surely.

Which Stock Should You Pick Today?

Let’s wrap this up in plain English:

• Pick TCS if you want margin stability, consistent profits, and low risk.

• Pick HCL Tech if you’re okay with short-term bumps for long-term high-growth potential.

Want the best of both worlds? Consider splitting your investment between both, balancing risk and return smartly.

HCL Share Price Outlook: What to Watch Ahead

Even though HCL share price took a hit post-Q1 results, keep an eye on:

• Margin recovery in the next two quarters

• ROI from AI and Go-to-Market investments

• Global deal wins and execution pace

• Any tailwinds from government or telecom sectors

Any positive surprise here could lead to a sharp re-rating.

Conclusion

This isn’t just a story of Q1 numbers—it’s a glimpse into the future of Indian IT. TCS is the dependable performer, delivering even in tough times. HCL Technologies, meanwhile, is the risk-taking innovator, playing for a bigger win in the AI game.

It all comes down to your appetite for risk and investment horizon. Whether you go for the steady tortoise (TCS) or the ambitious hare (HCL Tech), both companies remain cornerstones of India’s IT pride.

Read More: MLC 2025: MINY Crowned Champions – ESPNcricinfo Report

Final Thought: Your Move, Investor!

Markets change. Narratives shift. But one thing’s clear: HCL Tech and TCS will continue to be at the forefront of India’s digital future. Just make sure you choose based on your goals, not the noise.

Happy investing!