Indian IT‑Services Sector — Quick FAQ Sheet

Q1. Which NSE/BSE IT stocks are rated Strong Buy right now?
A. Tata Consultancy Services (TCS), HCL Technologies, and LTIMindtree — all show resilient deal pipelines, sector‑leading margins, and trade below long‑term valuation averages after the 2025 sell‑off.

Q2. Why are these three preferred?

• TCS: Q1 FY26 total‑contract‑value (TCV) US$ 9.4 bn, EBIT 24.5 %.

• HCLTech: FY26 revenue guidance 3‑5 % CC with digital revenue up 15 % YoY; TCV US$ 1.8 bn.

• LTIMindtree: FY25 order inflow US$ 6 bn; EBIT margin rebounding to 14.5 %.

Q3. Which stocks sit in the Underperform bucket?
A. Wipro, Tech Mahindra, Infosys — all guiding for sub‑GDP or negative growth and lagging on margin recovery.

Q4. What underpins the bearish view on those names?

• Wipro: Projects –3.5 % to –1.5 % CC revenue for Q1 FY26 (third year of declines).

• Tech Mahindra: FY25 constant‑currency growth just 0.3 %; EBIT margin 9.7 %.

• Infosys: FY26 growth outlook flat–3 % CC, slowest in a decade.

Macro & Market

Q5. How fast is India’s economy expected to grow?
A. IMF projects real GDP growth of 6.2 % in 2025‑26.

Q6. What’s the rupee outlook?
A. BofA sees the INR strengthening to ₹ 84/US$ by Dec 2025.

Q7. How has the Nifty IT index done YTD 2025?
A. Down ≈14 %, making IT the year’s worst Nifty sector.

Industry Basics

Q8. What is the Indian tech sector’s FY25 size?
A. About US$ 283 bn in revenue; exports US$ 224 bn, domestic US$ 58 bn. nasscom

Q9. Top growth drivers in FY26?
Gen‑AI projects, GCC expansions, cloud repatriation for DPDP compliance, and 5G‑edge ER&D deals.

Q10. Key regulatory influences?
Draft implementing rules under the Digital Personal Data Protection Act 2023 and RBI’s tougher outsourcing‑risk framework for banks.

Competitive Landscape & Challenges

Q11. Biggest headwinds for IT vendors?
Price pressure from AI‑linked productivity clauses, margin drag from re‑skilling, and investor skepticism after the 2025 drawdown.

Valuation & Risk Snapshots

Q12. Current valuation ball‑park?

• TCS ≈24–25× P/E,

• HCLTech ≈25×,

• LTIMindtree >30× (growth premium),

• Infosys ≈24×,

• Wipro ≈20×,

• Tech Mahindra ≈39×.

Q13. Key risks for the bottom names?
Contract slippages, weak discretionary spend, leadership churn (Wipro), hi‑tech client exposure (TechM), and flat deal wins (Infosys).

Strategy & Allocation

Q14. How should investors position now?

• Over‑weight large‑cap leaders (TCS, HCLTech) on dips.

• Tactical mid‑cap bet on LTIMindtree for higher beta but limit size.

• Under‑weight / avoid Wipro, Tech Mahindra, Infosys until growth inflects.

• Hedge for possible 50–70 bps margin hit if the rupee firms to ₹ 84.

Quadrant Map (summary):

• Strong Buy: TCS, HCL Technologies, LTIMindtree

• Hold: Coforge, Persistent Systems, Mphasis, KPIT Tech

• Underperform: Wipro, Tech Mahindra, Infosys

FAQs: Investment Comparison Among TCS, HCL Technologies, & LTI Mindtree in the IT Services Industry by Shubham Patel

1. Which company is the best investment opportunity?
Answer: TCS is the top pick, scoring twenty-eight out of thirty, due to strong fundamentals, financials, and market leadership.

2. What are their core businesses and competitive edges?
Answer: TCS offers IT consulting and digital transformation in BFSI and retail, leading with scale and AI expertise. HCL provides IT services and engineering, strong in CloudSMART and AI. LTI Mindtree focuses on cloud and digital engineering but lags in scale.

3. What are their recent developments?
Answer: TCS secured AI and SAP deals, planning to hire forty thousand freshers in FY26. HCL partnered with UiPath and Volvo, opening a Kerala center. LTI Mindtree joined Aramco and a ₹1,435 crore government project, with a new CEO in May 2025.

4. How is market sentiment for each company?
Answer: TCS has positive sentiment for AI and deals, cautious on macro risks. HCL sees optimism for partnerships but profitability concerns. LTI Mindtree has mixed views, with “Sell” calls due to flat performance.

5. How do their financial metrics compare?
Answer: TCS leads with thirty-nine percent gross margin, nineteen point two percent net margin, and forty-four point one percent ROE, with ten percent revenue growth. HCL follows with thirty-six point five percent gross margin, fourteen point two percent net margin, and ten point six percent revenue growth. LTI Mindtree trails with thirty-three point two percent gross margin, twelve point one percent net margin, and nine point nine percent revenue growth.

6. How have their stock prices performed?
Answer: TCS fell seven point eight percent last year, up thirty percent over five years. HCL gained three point two percent last year, forty-five percent over five years. LTI Mindtree dropped six point six percent last year, up twenty-five percent over five years.

7. Do their performances align with forecasts?
Answer: TCS met five to six percent revenue growth in Q1 FY25. HCL exceeded four to five percent growth with six point two percent in Q4 FY25. LTI Mindtree hit eight to ten percent growth but flat profits disappointed.

8. What are their total returns for investors?
Answer: TCS: minus seven point eight percent capital, three point eight six percent dividend, about four percent total return. HCL: three point two percent capital, three point six one percent dividend, about seven percent total return. LTI Mindtree: minus six point six percent capital, one point five percent dividend, about minus five percent total return.