Infosys Vs TCS Vs HCL Tech. Which IT stock is better after Q2 Results

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Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies Ltd indicate that the ride in second half of financial year may remain turbulent. There are limited expectations for FY24. While TCS reported tepid revenue growth missing expectations, Infosys and HCL Technologies' revenue growth guidance cuts have disappointed.

The strong deal wins led by Infosys Ltd and good order book though encourage, analysts feel that it may take few quarters for the deal wins to reflect in the earnings. For Instance, on Infosys Ltd that has reported strongest deal wins of $7.7 billion during the quarter gone by. Despite that analyst at Jefferies India Pvt Ltd said that Infosys lowered the top-end of its FY24 growth guidance by 100bps to 2.5% citing continued rampdowns in discretionary projects and delayed ramp-ups of new deal wins.

Its revised guidance implies -1.9% to 0% CQGR in revenues over 2HFY24. This along with a sharp decline in headcount suggests that the demand outlook is unlikely to improve in FY24. However, strong deal wins will support growth in FY25.

Also Read -Top IT firms shed 25K jobs amid cost cuts The analysts thereby are cutting forward earnings estimates For TCS analysts at Motilal Oswal financial Services have trimmed our FY24 and FY25 earnings per share estimates by 0.7% and 1.8% respectively. For HCL Technologies they have lowered our FY24 and 25 Earnings per share estimates by 1.6 and 3.0% to account for the Q2 miss. For Infosys they have adjusted FY25 EPS estimates lower by 1.4% to factor in 2Q performance.