TCS vs Wipro vs HCL: Which IT stock to buy after Q1 results 2023 — explained

In the week gone by, TCS share price ascended over 6.50 per cent, Wipro share price surged little over 3 per cent on Friday while HCL Tech share 3.50 per cent on Friday session. According to stock market experts, upside movement in IT stocks have come after the announcement of Q1 results of TCS, HCL Tech and Wipro. They said that TCS has reported quarterly numbers that meets the expectations of Dalal Street. However, after rally in most of the IT stocks, positional investors looking for the bargain hunting might feel confused as to which IT stock they should buy after the announcement of Q1 results for the current financial year.

Q1 results 2023: TCS vs HCL Tech vs Wipro

Speaking on TCS Q1 results 2023, Siddharth Bhaisora, Investment Advisor at Wright Research said, “TCS reported a promising 16.8% YoY growth in net profit and a 12.5% rise in revenue from operations, surpassing analysts’ expectations. Despite a slight sequential decrease in profits and operating margins, the outlook remains optimistic. Their robust total contract value (TCV) suggests a strong business demand and future revenue potential. While margin pressures exist, TCS’s solid market position and its demonstrated ability to navigate challenging market conditions make it a viable investment.”

“With Wipro’s recent Q1 performance, mixed growth predictions, and cautious outlook for Q2 FY24, the stock may face several short-term pressures. Despite the company’s long-term strategic focus on AI and its ability to secure major contracts, current macroeconomic uncertainties and the potential slowdown in the IT Services segment might impact near-term growth,” Siddharth said.

HCL Technologies, on the other hand, demonstrated a mix of robust YoY growth and sequential downturns. While the YoY growth in net profit was 7.6%, there was an 11.2% sequential drop. This, coupled with a drop in operating margins and lower-than-expected net profit, could be a cause for concern for potential investors.

On which IT major has reported better Q1 results 2023, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “TCS Q1 results 2023 is in sync with the market estimates and the IT major has managed to report improvemet on attrition, order book intake and margins that has attracted buying interest of the Indian stock market bulls. However, Wipro results for the first quarter of current financial year is disappointing and Wipro stock rally is just because of the short term positive sentiments.”

TCS vs Wipro vs HCL Tech

Gorakshkar went on to add that HCL Tech results for Q1FY23 were neither promising nor disappointing. However, when it comes to comparing the Q1 results of these three IT companies, TCS has delivered comparatively better numbers than HCL Tech and Wipro.

On which IT stock to buy today, Avinash Gorakshkar of Profitmart Securities said, “TCS shares are the best among the current lot of IT stocks in large-cap and mid-cap segment. However, we need to wait for the Infosys results as well.”

On important levels in regard to TCS shares, Vaibhav Kaushik, Research Analyst at GCL Broking said, “TCS share price has taken support at ₹3,200 apiece levels. Those who have TCS shares in portfolio are advised to maintain stop loss at ₹3,200 levels. The It major may go up to ₹3,750 in near term.”

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

Updated: 16 Jul 2023, 10:18 AM IST