TCS, Infosys or HCL Tech: Experts reveal top IT pick post Q4 earnings(Pexels)AI Quick ReadQ4 Results 2026: India’s IT sector finds itself at a critical juncture, with global demand uncertainties, pricing pressures, and the disruptive impact of artificial intelligence reshaping growth expectations.
The Q4FY26 earnings season has once again highlighted a divergence in performance across top players like Infosys, Tata Consultancy Services, and HCL Technologies. While deal pipelines remain strong across the board, growth visibility has turned increasingly uncertain, forcing investors to reassess their positioning in the sector.
Infosys reported a healthy 21% YoY increase in net profit at ₹8,501 crore for Q4FY26, while revenue rose 13.4% YoY to ₹46,402 crore, reflecting steady deal execution. However, sentiment remained subdued as the company’s FY27 constant currency growth guidance of 1.5%–3.5% pointed to a slowdown ahead, highlighting pressure on demand visibility despite stable margins.
In comparison, TCS delivered relatively stronger operational performance, with net profit rising 28.7% to ₹13,718 crore and revenue growing 5.4% QoQ to ₹70,698 crore. The company also saw a marginal improvement in profitability, with EBIT margin inching up to 25.3%. Importantly, robust deal wins remained a key positive, with Q4 TCV at $12 billion and FY26 TCV at $40.7 billion, providing strong revenue visibility going forward.
HCL Tech, meanwhile, posted a relatively muted performance. Net profit grew 4.2% YoY to ₹4,488 crore, while revenue increased 12.35% YoY to ₹33,981 crore. However, sequential trends were weaker, with revenue largely flat and margins declining, as reflected in lower EBIT levels and pressure on profitability, indicating near-term operational challenges.
As the IT sector navigates weak demand, pricing pressure, and AI-driven disruption, the post-Q4 earnings phase has brought sharper differentiation among top players. While Infosys faces growth concerns, Tata Consultancy Services shows relative resilience, and HCL Technologies offers a mixed outlook—making the choice increasingly nuanced for investors.
“When we look at the Q4 results, the story is one of caution. Infosys shocked the market with a very low growth forecast for next year, leading to a sharp drop in its stock. HCL Tech also disappointed investors with flat growth, causing its share price to tumble. Even TCS, which is performing the best and winning billions in AI deals, is being dragged down by the general gloom surrounding the sector," said Mayank Jain, Market Analyst, Share.Market.
He further noted that despite TCS emerging as relatively stronger in terms of execution and deal wins, all three stocks are currently trading near or below their key technical levels. Infosys and HCL Tech have slipped to their 52-week lows, while TCS is also hovering close to similar levels, indicating weak sentiment across the sector.
Moreover, post Q4FY26 results, Vinit Bolinjkar- Head of Research - Ventura's view on the IT sector remains cautious.
"Given the revised guidance and macroeconomic challenges, we would advise a cautious approach to Infosys, TCS, and HCL Technologies. TCS remains relatively stable and shows resilience, especially in digital transformation services, though its growth guidance has been moderated. Infosys and HCL Tech face more immediate challenges, particularly in Europe and telecom, making them less attractive in the near term," noted Bolinjkar.
For Bolinjkar, TCS remains the preferred stock for those seeking stability in the near term, but the guidance revision and uncertainty in key regions, especially Europe, suggest caution. He also stated that while HCL Tech has long-term potential due to its focus on AI and digital services, its short-term challenges make it a cautious sell for now. For Infosys, he suggests a "wait-and-watch" in the near term. The cautious FY27 revenue forecast suggests that a meaningful recovery in growth momentum is likely pushed to the second half of the fiscal year, added the expert.
Meanwhile, Motilal Oswal Financial Services has adopted a differentiated stance across India’s top IT majors, maintaining BUY ratings on all three but showing a relative preference for HCL Technologies due to its structural strengths and better growth visibility. While Tata Consultancy Services is seen as a stable performer and Infosys offers higher upside potential, the brokerage has flagged near-term risks around growth, pricing pressure and deal economics, making stock selection increasingly nuanced in the current environment.
The brokerage expects HCL Tech’s diversified and infra-heavy portfolio to remain a structural positive, even as near-term growth moderates, and has reiterated a BUY rating with a target price of ₹1,650, implying around 15% upside. On TCS, Motilal Oswal expects a gradual recovery, with USD revenue and EPS projected to grow at ~3.8% and ~7.0% over FY26–28, driven by select pockets rather than broad-based demand. It also highlighted that margin expansion may remain limited as productivity gains and currency benefits are likely to be reinvested.
For Infosys, the brokerage reiterated a BUY rating with a target price of ₹1,450, implying ~17% upside. “Deal economics are suffering as companies walk away from large contracts due to untenable terms and rising competitive intensity, signalling a shift toward leaner delivery models,” Motilal Oswal said. It added that AI-led deflation, pricing pressure, and sector-specific headwinds continue to weigh on growth visibility, with revenue expected to remain subdued in the near term.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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