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: 55/100
Tata Consultancy Services Ltd.
IT
Quality Score: 59/100
At a glance
| Metric | HCLTECH | TCS |
|---|---|---|
| Quality Score | 55/100 | 59/100 |
| P/E (trailing) | 18.5 | 15.7 |
| Forward P/E | 14.2 | 12.9 |
| ROE | +23.4% | +48.4% |
| Profit margin | +12.8% | +18.4% |
| Debt-to-equity | 6.93 | 10.39 |
| Dividend yield | +8.48% | +5.84% |
| 1Y price return | -31.8% | -37.2% |
| From 52w high | -35.2% | -37.6% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.90 | 2.05 |
Highlighted value = better on the metric (lower for P/E, D/E, drawdown, analyst rating; higher elsewhere). Descriptive only.
Snapshots
HCL Technologies (Rs 1,131.7) has declined 31.77% over the past 12 months and trades 35.21% below its 52-week high, sitting below both the 50-DMA (Rs 1,207.11) and 200-DMA (Rs 1,419.16). The trailing PE of 18.52 (forward PE 14.18) sits above most large-cap IT peers despite a quality score of 40 that ranks last among the 6 tracked peers. ROE of 23.36% and four consecutive years of positive FCF provide a counterweight to the weak price and earnings-growth trends.
TCS (IT sector) trades at ₹2,125 as of 2026-06-22, 37.57% below its 52-week high, below both the 50-DMA (₹2,326.99) and 200-DMA (₹2,751.85). Trailing PE is 15.71 with a forward PE of 12.89, while ROE of 48.4% ranks first among 6 tracked IT peers. A confirmed $70 million litigation charge following the US Supreme Court ruling in June 2026 adds a near-term financial headwind.
Pros
- ✓ROE of 23.36% exceeds WIPRO (15.44%) and TECHM (16.61%) peers, with 4 of the available years recording ROE above 15%, pointing to consistent capital efficiency above the sector floor.
- ✓Forward PE of 14.18 vs trailing PE of 18.52 implies the market is pricing in meaningful near-term earnings recovery; forward PE is broadly in line with TCS (15.71) and WIPRO (14.36) and below TECHM (26.12).
- ✓Positive free cash flow in 4 of the available years (persistence consistency score 61) supports dividend coverage; the declared yield of 8.48% at prevailing price has been funded by operating cash generation in recent periods.
- ✓Recent partnership announcements spanning Volkswagen e.solutions, Pegasystems AI modernization, and Sarvam AI unicorn participation extend the enterprise and AI pipeline across automotive and financial services verticals.
- ✓ROE of 48.4% is the highest among six tracked IT peers (INFY: 31.44%, HCLTECH: 23.36%, LTM: 21.29%, TECHM: 16.61%, WIPRO: 15.44%), reflecting durable capital efficiency.
- ✓5-year earnings CAGR of 12.2% and revenue CAGR of 9.6% demonstrate consistent compounding over the persistence window of 4 tracked years.
- ✓Moody's upgraded TCS to A2 (May 2026) and a multimillion-euro AI-powered IT modernisation deal was signed with Canada Life (June 2026), indicating ongoing deal flow in the enterprise segment.
- ✓Dividend yield of 5.84% at current price levels represents one of the higher yields in the large-cap IT peer group, with FCF positive in 4 of 4 tracked years supporting distributions.
Cons
- ✗Five-year earnings CAGR of -0.2% against revenue CAGR of 5.3% indicates margin compression has been a persistent feature rather than a single-year anomaly.
- ✗Composite quality score of 40 ranks 6th of 6 tracked IT peers; relative to TCS (62), LTM (65), and INFY (65), HCLTECH carries the weakest quality profile in the cohort while trading at a premium PE to INFY and WIPRO.
- ✗D/E ratio of 6.94 stands materially above the net-cash or near-zero-debt profiles of TCS and INFY, introducing balance-sheet risk in a rising-rate or revenue-slowdown scenario.
- ✗Price is 31.77% below 12-month levels and 35.21% off the 52-week high, trading below both the 50-DMA and 200-DMA with the nearest resistance at Rs 1,198.3 (5.9% above current price) and further resistance at Rs 1,257 and Rs 1,447.
- ✗Price has declined 37.17% over 12 months and remains 22.8% below the 200-DMA (₹2,751.85) and 8.7% below the 50-DMA (₹2,326.99), reflecting a sustained multi-month downtrend.
- ✗US Supreme Court rejected TCS's appeal, confirming a $70 million charge (Reuters, June 2026) — a material one-time hit to earnings in the near term.
- ✗Debt-to-equity of 10.39 is elevated relative to the capital-light nature of IT services, and the persistence data flags a rising debt trend — an atypical structural development for the segment.
- ✗Consistency score of 59/100 and quality score of 62 are below peers INFY (quality 65) and LTM (quality 65), indicating mid-tier execution consistency despite leading ROE.
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