TCS Vs HCL Technologies: Which stock can deliver higher returns after Q3 results

Synopsis: TCS and HCLTech delivered steady Q3 performance with healthy revenue growth and strong AI traction, supported by robust deal wins and expanding AI partnerships, though brokerages have differing views on valuations and near-term upside with mixed buy, hold, and sell recommendations.

These two large-cap IT stocks, providing global technology, digital, and AI-led services, remained in focus after their Q3 results highlighted steady revenue growth and rising AI services contribution. While deal wins and AI momentum supported sentiment, brokerages offered mixed recommendations on whether investors should buy, hold, or sell the stocks going forward.

With a market capitalization of Rs. 11,76,927.69 crores, the shares of Tata Consultancy Services Limited were currently trading at Rs. 3,275 per equity share, rising nearly 1.21 percent from its previous day’s close price of Rs. 3,235.70. 

Similarly, with a market capitalization of Rs. 4,53,168.50 crore, the shares of HCL Technologies Limited were currently trading at Rs. 1,691 per equity share, rising nearly 1.37 percent from its previous day’s close price of Rs. 1,668.10. 

Q3 FY26 Result

Coming into the quarterly results of Tata Consultancy Services Limited, the company’s consolidated revenue from operations increased by 4.87 percent YOY, from Rs. 63,973 crore in Q3 FY25 to Rs. 67,087 crore in Q3 FY26, and grew by 1.96 percent QoQ from Rs. 65,799 crore in Q2 FY26.

Tata Consultancy Services Limited reported strong traction in its AI services, with annualized AI revenue reaching $1.5 billion and registering a healthy 16.3 percent quarter-on-quarter growth. 

During the quarter, the company secured several large deals across markets, including a mega deal in North America, taking total deal bookings to $9.3 billion. While deal bookings declined 9 percent year-on-year, momentum remained strong, supported by BFSI-led demand and AI-driven transformation opportunities.

Likewise, HCL Technologies Limited’s consolidated revenue from operations increased by 13.32 percent YOY, from Rs. 29,890 crore in Q3 FY25 to Rs. 33,872 crore in Q3 FY26, and grew by 6.04 percent QoQ from Rs. 31,942 crore in Q2 FY26. Net 

Advanced AI remained a key growth driver during the quarter, with AI-led revenues reaching $146 million, accounting for roughly 4 percent of total revenue and registering a strong 19.9 percent sequential growth fueled by the rising adoption of Agentic AI, Physical AI, and AI Factory implementations.  

The company’s Advanced AI revenue surpassed the $100 million milestone in the previous quarter. This momentum was bolstered by strong deal activity, which included net new deals totalling $3.006 billion and annual contract value bookings that reached a four-year high.

AI Partnership

Tata Consultancy Services (TCS) has built a robust AI ecosystem through strategic partnerships with hyperscalers like AWS, Google Cloud, and Microsoft, and enterprise platforms such as SAP, Oracle, Salesforce, and ServiceNow. 

The company collaborates with NVIDIA, OpenAI, Anthropic, Siemens, Honeywell, and other AI-native partnerships like Kore.ai, Vianai, Windsurf, CURSOR, and domain leaders enable TCS to deliver scalable, industry-focused AI solutions, driving innovation and faster digital transformation for global clients.

Correspondingly, HCL Tech also continues to strengthen its AI ecosystem through strategic partnerships with global technology leaders. The company has deepened collaboration with NVIDIA in Physical AI and Robotics, including the launch of a Physical AI Innovation Lab. 

HCL Tech has also been recognized by Microsoft as a “Frontier Firm” and achieved Microsoft Copilot Specialization. Partnerships with SAP, AWS, and Strategy Inc focus on advancing AI-driven industry solutions, data analytics, and core modernization. 

Brokerages Viewpoints

Tata Consultancy Services Limited has mixed brokerage views. Macquarie remains bullish with a Buy and a Rs. 4,810 target, while Citi maintains a Sell at Rs. 3,020. Nomura holds a Neutral stance with a Rs. 3,300 target. Other brokerage views follow in the table.

BrokerageRatingTarget PriceUpside / Downside MacquarieBuy₹4,81046.87% Motilal OswalBuy₹4,40034.35% Prabhudas LilladherBuy₹4,04023.36% Choice Institutional EquitiesBuy₹3,95020.61% Kotak Institutional EquitiesBuy₹3,67512.21% CLSAOutperform₹3,5939.71% Morgan StanleyOverweight₹3,5408.09% HSBCHold₹3,4505.34% NomuraNeutral₹3,3000.76% CitiSell₹3,020-7.79%

Similarly, HCL Technologies Limited has mixed brokerage views. Motilal Oswal and Prabhudas Lilladher remain positive with Buy ratings and target prices of Rs. 2,200 and Rs. 1,910, respectively. HSBC maintains a Hold at Rs. 1,815, while Nomura, Morgan Stanley, Citi, Kotak Securities, and ICICI Securities have neutral to cautious stances. Here are several perspectives from different brokerages, as detailed in the table above.

BrokerageRatingTarget PriceUpside / Downside Motilal OswalBuy₹2,20030.10% Prabhudas LilladherBuy₹1,91012.95% HSBCHold₹1,8157.33% NomuraBuy₹1,8107.04% Morgan StanleyEqual-weight₹1,7604.08% CitiNeutral₹1,7000.53% Kotak SecuritiesReduce₹1,680-0.65% ICICI SecuritiesHold₹1,590-5.97%

Company Overview

Tata Consultancy Services (TCS) was founded in 1968 as part of the Tata Group and is a global leader in IT services, consulting, and business solutions. It provides application development, cloud migration, AI, cybersecurity, and digital transformation services across industries like banking, retail, healthcare, and manufacturing. 

HCL Technologies was established in 1991 and is headquartered in Noida, India. The company specialises in IT consulting, digital services, engineering, and software products. It offers cloud, AI, cybersecurity, and engineering R&D for sectors including finance, telecom, automotive, and healthcare. 

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