TCS, Wipro, Infosys, and HCL Technologies: Evaluating the Best Investment Opportunity Post Q3 2025 Earnings
TCS, Wipro, Infosys, and HCL Technologies: The December quarter (Q3FY25) earnings of leading domestic IT companies were a mixed bag, but overall, they did not disappoint. This has sparked optimism that the IT sector may have weathered the worst of the storm. While it is premature to make definitive conclusions, experts are generally upbeat about the Indian IT industry post-Q3 results.
TCS reported strong TCV (total contract value) and expressed confidence in its long-term growth outlook. Infosys, on the other hand, raised its FY25 revenue growth guidance for the third consecutive quarter to 4.5-5% in constant currency (CC) terms.
HCL Tech boasted healthy new deal bookings of $2.1 billion during Q3, with wins spanning services and software. Wipro’s Q3 performance was in line with expectations.
In TCS’s Q3 results, consolidated revenue from operations for the IT giant increased by 5.6% year-on-year (YoY) to ₹63,973 crore from ₹60,583 crore in the same quarter last year. In constant currency (CC) terms, revenue rose by 4.5%. Profit attributable to shareholders for the period reached ₹12,380 crore, a 12% YoY increase from ₹11,058 crore in Q3FY24.
K Krithivasan, Chief Executive Officer and Managing Director of TCS, commented, “We are delighted with the outstanding TCV performance in Q3, which was well-diversified across industries, geographies, and service lines, providing strong visibility for long-term growth.”
Infosys Q3 Results:
In the third quarter, Infosys saw a 3.9% year-over-year growth in revenues in constant currency terms. The company’s net profit for the October-December quarter reached ₹6,806 crore, marking an 11.4% increase compared to the previous year.
“We are dedicated to enhancing our enterprise AI capabilities, with a specific focus on generative AI, which is gaining traction among clients,” stated Salil Parekh, CEO and MD of Infosys. “This has resulted in another successful quarter with significant large deal wins and an improved deal pipeline, giving us confidence as we move forward.”
HCL Tech Q3 Results:
HCL Tech experienced a 5.5% increase in consolidated net profit, reaching ₹4,591 crore in the third quarter. Revenue from operations also rose by 5% to ₹29,890 crore compared to the previous year. The company anticipates a revenue growth of 4.5-5% year-over-year in constant currency terms for FY25.
C Vijayakumar, CEO and Managing Director of HCL Tech, expressed satisfaction with the company’s 3.8% quarter-over-quarter growth in constant currency and EBIT at 19.5%. “I am pleased to see this growth driven by strong performance across business lines, as our clients continue to show confidence in our digital and AI offerings.”
Wipro Q3 Results:
Wipro reported a 24.5% year-on-year increase in consolidated net profit for Q3FY25, reaching ₹3,353.8 crore. Consolidated revenue from operations also saw a nearly 1% year-on-year rise, totaling ₹22,319 crores during the quarter.
Which IT Stock Should You Buy?
Experts noted that while Infosys’ Q3 results were slightly below expectations, TCS and Wipro’s earnings were on target, with optimistic management commentary. However, they found HCL Tech’s growth guidance disappointing.
Mahesh M Ojha, Assistant Vice President of Research at Hensex Securities, is recommending purchasing TCS stock at ₹4,125, with a target price range of ₹4,160 to ₹4,300. He advises setting a stop loss below ₹4,060 to manage risk.
Following TCS, Ojha suggests buying Wipro in the range of ₹281-282, with a target price range of ₹292 to ₹325 and a stop loss at ₹276. For long-term investments, brokerage firm Motilal Oswal Financial Services recommends buying TCS, Infosys, and HCL Tech.
Motilal Oswal has set target prices of ₹5,000 for TCS, ₹2,400 for HCL Tech, and ₹2,200 for Infosys. They believe TCS is well-positioned for growth due to its size, order book, and market leadership. Infosys is expected to benefit from an acceleration in IT spending, while HCL Tech’s diversified portfolio is seen as a strength despite recent underwhelming performance.
Motilal Oswal has adjusted their estimates for Infosys to reflect a potential revenue decline in the near term, but remains encouraged by the company’s margin guidance. They note that valuation parity has been achieved for HCL Tech, TCS, and Infosys, with HCL Tech facing a higher hurdle rate for re-rating compared to its peers.
Despite this, Motilal Oswal believes HCL Tech’s diversified portfolio positions it well for future growth, particularly in short-cycle deals. They highlight a 23% increase in ACV as a positive indicator for the company’s medium-term prospects.
Motilal Oswal has taken a neutral stance on Wipro, setting a target price of ₹290.
It is anticipated that Wipro will achieve an operating margin of nearly 17% in FY25, leading to a 7.5% compound annual growth rate in INR PAT over the period of FY24-27E. Following the Q3 report, Motilal Oswal has increased its FY25E EPS by approximately 5% to account for the margin outperformance. The EPS estimates for FY26E/FY27E remain largely unchanged.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.