HCLTECH vs TCS
Side-by-side comparison of HCL Technologies Ltd. and Tata Consultancy Services Ltd.. Descriptive only — not investment advice.
HCL Technologies Ltd.
IT
Quality Score: 52/100
Tata Consultancy Services Ltd.
IT
Quality Score: 54/100
At a glance
| Metric | HCLTECH | TCS |
|---|---|---|
| Quality Score | 52/100 | 54/100 |
| P/E (trailing) | 19.5 | 17.6 |
| Forward P/E | 15.0 | 14.5 |
| ROE | +23.4% | +48.4% |
| Profit margin | +12.8% | +18.4% |
| Debt-to-equity | 6.93 | 10.39 |
| Dividend yield | +8.01% | +5.18% |
| 1Y price return | -20.9% | -28.4% |
| From 52w high | -31.4% | -31.8% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.95 | 2.12 |
Highlighted value = better on the metric (lower for P/E, D/E, drawdown, analyst rating; higher elsewhere). Descriptive only.
Snapshots
HCLTECH trades at ₹1,198.40, down 20.86% over the past year and 31.39% below its 52-week high, sitting below both the 50-DMA (₹1,318.98) and 200-DMA (₹1,461.28). The Q4 FY26 earnings release in late April 2026 triggered a single-session decline of over 10% accompanied by brokerage target-price cuts, while management guided for muted FY27 growth. Trailing PE of 19.54 sits above larger peers despite a quality score (40) that ranks last among the six IT peers analyzed.
TCS trades at ₹2,394.40, down 28.41% over 12 months and 31.77% below its 52-week high, with the price sitting 17.6% below the 200-DMA at the time of analysis. Against this technical backdrop, the company reports an ROE of 48.4% — highest among its 6 tracked IT peers — and a 5.18% dividend yield, though the dividend has been cut for a second consecutive year. An active governance investigation at the Nashik facility adds a reputational risk dimension not visible in the trailing financial metrics.
Pros
- ✓ROE of 23.36% has remained above 15% in 4 of the available years, and FCF was positive in 4 of those years, indicating a degree of earnings and cash-generation consistency.
- ✓Forward PE of 14.97 represents a meaningful compression from the trailing PE of 19.54, implying that current analyst earnings estimates embed a recovery in profitability relative to today's price.
- ✓5-year revenue CAGR of 5.3% indicates the business has grown its top line in absolute terms even as net margin faced pressure (profit margin: 12.8%).
- ✓Dividend yield of 8.01% at current price is among the highest in large-cap IT, reflecting the extent of price decline rather than an elevated payout; the absolute dividend has remained in place through recent quarters.
- ✓ROE of 48.4% ranks 1st among 6 tracked IT sector peers (HCLTECH 23.36%, INFY 31.44%, TECHM 16.61%, WIPRO 15.49%, LTM 21.29%), and has been above 15% in 4 of the available historical years.
- ✓FCF has been positive in 4 of the available recorded years, with a consistency score of 59, indicating above-average earnings-to-cash conversion relative to the historical record.
- ✓Trailing dividend yield of 5.18% is notable for a large-cap IT name; forward PE of 14.47 compresses the valuation multiple further when projected earnings are used.
- ✓5-year earnings CAGR of 12.2% and revenue CAGR of 9.6% reflect sustained top- and bottom-line growth over a multi-year horizon despite current near-term headwinds.
Cons
- ✗Price has declined 24.69% over the past three months and remains below both the 50-DMA and 200-DMA with no identified technical support levels, leaving the nearest reference points as resistance levels at ₹1,447, ₹1,643, and ₹1,747.
- ✗Q4 FY26 results prompted multiple brokerages to cut target prices and the stock fell over 10% in a single session on 22-Apr-2026; management guided for muted FY27 revenue after what it called its fastest growth in three years — a combination of earnings disappointment and cautious forward guidance.
- ✗5-year earnings growth of -0.2% against 5-year revenue growth of 5.3% indicates that revenue gains have not translated into earnings expansion, compressing profit margins over the period.
- ✗Quality score of 40 ranks 6th (last) among 6 IT peers; D/E of 6.935 is materially higher than typically reported for large-cap IT software businesses and merits examination of the underlying liability composition.
- ✗Price is 31.77% below the 52-week high and 17.6% below the 200-DMA (₹2,901.17), with losses of 28.41% over 12 months and 20.16% over 3 months — among the steepest drawdowns in the measured IT peer group.
- ✗Active governance risk: Nashik facility allegations led to an internal probe ordered by the Chairman and 7 SIT arrests as of April 2026, representing an ongoing legal and reputational exposure.
- ✗Dividend has been reduced for two consecutive years, with cash being redirected to AI infrastructure investment; payouts to parent Tata Sons have also declined, signalling a shift in capital allocation priorities.
- ✗Debt-to-equity of 10.39 is on a rising trend; while IT firms are not capital-intensive in the traditional sense, this trajectory alongside declining dividend capacity constrains financial flexibility.
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