HCL Tech vs Infosys vs TCS: Which IT stock to buy today and why — explained

HCL Tech vs Infosys vs TCS: After announcement of quarterly results of Indian IT majors HCL Technologies, Infosys and Tata Consultancy Services (TCS), positional long-term investors are looking for bottom fishing opportunity in these large-cap IT stocks as these stocks are available at much discounted price against other segment shares. Infosys share price today is around 27 per cent below its 52-week high whereas TCS share prie today is around 15 per cent below its 52-week high. Likewise, HCL Tech shares are around 10 per cent away from its 52-week high. However, if we compare these IT shares current market price to there price in pre-Ukraine crisis, then these large-cap Indian IT stocks are available at much lower price.

According to stock market experts, HCL Tech, Infosys and TCS results are below market estimates but comparatively HCL Tech results are much better than others. However, good results doesn't mean good financials. Recently Nasdaq has witnessed big upside after good results announced by leading US tech companies, but that has come from the layoff and other austerity measures. Apart from this, outlook for Indian IT companies looks challenging for next one to two quarters due to hawkish US Fed officials in interest rate hike and looming economic slowdown due to bank crisis in US. This is going to hit the Indian IT company's business in BFSI segment, which is at least 30 per cent of its US business revenue.

Speaking on outlook for Indian IT companies, Saurabh Jain, Vice President — Research at SMC Global Securities said, "Due to hawkish US Fed on in terest rate hike and looming economic slowdown due to bank crisis in US, Indian IT companies are facing challenge on its BFSI business segment, which is near 30 per cent of its total business in the US. So, Indian IT companies are going to face huge challenge to maintain and sustain its financials even at current levels. As quarterly results of TCS and Infosys have been disappointing, one should not jump to a conclusion that HCL Tech has reported better quarterly numbers and hence this is the stock we can look at for bottom fishing."

Saurabh Jain of SMC Global Securities advised investors to wait for the HCL Tech guidance and then make any decision as future PE would be available for them to make a proper comparison amongst Indian IT stocks.

HCL Tech vs Infosys vs TCS shares

On which IT stock to buy today, Sandeep Pandey, Director at Basav Capital said, "Rising Nasdaq doesn't mean rise in Nifty IT index. In current scenario, those IT stocks that have tumbled lesser in recent sell off, they are expected to bounce back strongly when there is trend reversal. As TCS guidance failed to inject enthusiasm in the markets, Infosys was also not able to lift the morale of Dalal Street bulls. But, HCL Tech results have led to rise in Nifty IT index and buying interest in other IT stocks as well. So, comparing HCL Tech, Infosys and TCS, I would prefer to HCL Tech shares as it has delivered comparatively better results and HCL Tech share price has tumbled lesser than Infosys and TCS shares."

However, Basav Capital director advised positional investors to take position in HCL Tech shares in a calibrated manner and suggested investors to invest in three to four stages as next one to two quarters are expected to remain sluggish for Indian IT companies. However, he also maintained that one can't time the market and hence, one can start accumulating the stock at current levels.

HCL Tech vs Infosys vs TCS: Important levels

On important levels in regard to HCL Tech shares, Anuj Gupta, Vice President — Research at IIFL Securities said, "HCL Tech share price has immediate support placed at ₹970 whereas strong support for the IT major is around ₹880 apiece levels. Bottom fishers are advised at buy HCL Tech shares around ₹1000 to ₹1020 zone and further accumulate if the stock comes around ₹920 apiece levels."

Anuj Gupta of IIFL Securities said that short term, medium term and long term HCL Tech share price target would be ₹1220, ₹1350 and ₹1500 per share levels.

Ravi Singhal, CEO at GCL Broking said that one can buy Infosys shares as well. One can buy Infosys shares around ₹1200 maintaining strict stop loss at ₹1100 apiece levels for long term target of ₹1860 in next two year time.

HCL Tech results

HCL Tech's fourth-quarter earnings were broadly in line with market estimates. The IT giant witnessed double-digit growth in YoY terms, however, sequentially the performance was feeble. Also, the IT major recorded a single-digit drop in new deal wins. However, it's FY24 guidance looks encouraging. Overall, HCL Tech's Q4 results are not seen as a shocker and hence the market is expected to be appreciative of the stock price.

Infosys Q4 results

Infosys reported a sequentially weak Q4FY23 numbers as the IT giant's Q4 PAT came in at ₹6,128 crore down by nearly 16% QoQ. While revenue also dipped by 2.2% QoQ to ₹37,441 crore. In constant currency, the company's revenue growth came in at 3.2% QoQ and 8.8% YoY. The operating margin stood at 21% in Q4.

TCS Q4FY23 results

Blaming the bank crisis in US for its weak Q4 numbers, TCS reported a net income of ₹113.9 billion ($1.4 billion) for the fourth quarter ending in March, which is a 15% increase from the previous year. However, this fell short of the analysts' estimate of ₹115.3 billions on average. Despite this, TCS's sales increased by 17% to 591.6 billion rupees.