2 IT Stocks to Buy now for up to 35% upside, Recommended by Motilal Oswal

Synopsis: Motilal Oswal Financial Services recommends Tata Consultancy Services Limited and HCL Technologies Limited, citing Q3 performance and growth visibility, with target prices of ₹4,400 and ₹2,200, implying upside potential of up to 36 percent.

Motilal Oswal Financial Services has highlighted two select large-cap IT stocks that continue to offer strong growth potential following their Q3 results. Backed by healthy revenue growth, margin stability, and robust deal pipelines, these companies are well-positioned to benefit from sustained digital and AI-led demand.

According to Motilal Oswal, the recommended stocks offer upside potential of up to 36 percent, making them attractive picks for investors seeking growth opportunities in the IT sector. Here are two large-cap IT stocks recommended by Motilal Oswal with a high growth potential of up to 36 percent following the Q3 results announcement

Tata Consultancy Services Limited

With a market capitalization of Rs. 11,73,381.96 crore, the shares of Tata Consultancy Services Limited were currently trading at Rs. 3,243.10 per equity share, down nearly 0.75 percent from its previous day’s close price of Rs. 3,267.60. 

Motilal Oswal, a prominent brokerage firm, has recommended a “Buy” call on Tata Consultancy Services Limited with a target price of Rs. 4,400 per share, indicating an upside potential of 35.67 percent.

Motilal Oswal Financial Services remains positive on Tata Consultancy Services Limited, supported by a steady Q3 FY26 performance that came in slightly ahead of expectations. TCS reported revenue of USD 7.5 billion, growing 0.8 percent quarter-on-quarter in constant currency, driven by strong growth in regional markets and select verticals such as consumer business, energy, and healthcare. 

EBIT margin stood at a healthy 25.2 percent, remaining flat sequentially and better than estimates, while adjusted PAT rose 6.4 percent QoQ and 13.4 percent YoY to Rs. 141 billion, despite one-off restructuring and labor-related costs.

Looking ahead, Motilal Oswal expects further improvement in Q4 FY26, with revenue, EBIT, and adjusted profit projected to grow 6.8 percent, 10.8 percent, and 10.9 percent year-on-year, respectively. Deal momentum remains supportive, with total contract value wins of USD 9.3 billion and a stable book-to-bill ratio of 1.2x. The brokerage believes consistent execution, margin stability, and a strong order pipeline support its target and long-term positive view on the stock.

Tata Consultancy Services Limited (TCS), a flagship of the Tata Group founded in 1968, is engaged in providing comprehensive IT services, consulting, and business solutions worldwide. TCS delivers application development, maintenance, cloud migration, AI, machine learning, cybersecurity, and digital transformation services across industries like banking, financial services, insurance (BFSI), retail, manufacturing, healthcare, and telecommunications.

HCL Technologies Limited

With a market capitalization of Rs. 4,49,817.13 crore, the shares of HCL Technologies Limited were currently trading at Rs. 1,657.60 per equity share, down nearly 0.44 percent from its previous day’s close price of Rs. 1,665. 

Motilal Oswal, a prominent brokerage firm, has recommended a “Buy” call on HCL Technologies Limited with a target price of Rs. 2,200 per share, indicating an upside potential of 32.72 percent.

Motilal Oswal Financial Services highlighted a strong Q3 FY26 performance by HCL Technologies Limited, with revenue reaching USD 3.8 billion, growing 4.2 percent QoQ in constant currency, well above expectations. 

EBIT margin stood at 18.6 percent, better than estimates, while new deal wins were robust at USD 3.0 billion, reflecting a sharp 43.5 percent year-on-year increase. Adjusted PAT rose 13.3 percent QoQ to Rs. 48 billion, supported by steady execution and resilient demand.

Looking ahead, Motilal Oswal noted that HCLTech revised its FY26 revenue growth guidance upward to 4-4.5 percent in constant currency, with services growth expected between 4.75 percent and 5.25 percent, while maintaining EBIT margin guidance at 17-18 percent. 

For Q4 FY26, the brokerage expects revenue, EBIT, and adjusted profit to grow 12.3 percent, 7.4 percent, and 9.0 percent year-on-year, respectively. HCLTech continues to stand out as the fastest-growing large-cap IT company, supported by its diversified and resilient business portfolio.

HCL Technologies Limited was established in 1991 and is headquartered in Noida, India. The company is engaged in end-to-end IT consulting, digital services, engineering, and software products for global enterprises. HCL specializes in cloud transformation, AI, cybersecurity, IoT, digital engineering, and R&D services across sectors, including financial services, telecom, automotive, aerospace, healthcare, and retail

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