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Today's prices ask more of Tata Consultancy Services than of HCL Technologies.
At current prices, buyers of HCL Technologies are assuming about 0% growth against 10% in its own record; for Tata Consultancy Services it is 0% against 7%. That shows which share needs more to go right — not which is cheaper. How far each trades from its estimated fair value is in the full valuations.
- Valuation method: both on discounted cash flow.
- Size: Tata Consultancy Services is worth about 2.3 times HCL Technologies on the stock market.
- Record: HCL Technologies has grown revenue faster: HCL Technologies compounded at about 13% a year (FY2018–FY2026) and Tata Consultancy Services at about 9% (FY2019–FY2026).
- What to watch: services growth at HCL Technologies; growth in constant currency at Tata Consultancy Services.
| HCL Technologies | Tata Consultancy Services | |
|---|---|---|
| Price | ₹1,378 | ₹2,408 |
| Market cap | ₹3.74L Cr | ₹8.72L Cr |
| P/E | 20.4 | 16.9 |
| P/B | 4.98 | 8.13 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Discounted cash flow | Discounted cash flow |
01Two businesses
Services, engineering — and software
HCL Technologies, founded by Shiv Nadar, is India's third-largest IT services company. Most of its revenue comes from IT and business services and from engineering and R&D services, which design products and software for manufacturers, telecom companies and technology firms.
How TCS makes its money
Tata Consultancy Services is India's largest IT services company and part of the Tata group, which holds the majority of its shares. It builds and runs software, cloud and data systems for large companies around the world, with banking and financial services its biggest industry and North America its largest market.
02The records side by side
HCL Technologies has grown revenue faster: HCL Technologies compounded at about 13% a year (FY2018–FY2026) and Tata Consultancy Services at about 9% (FY2019–FY2026). By revenue, Tata Consultancy Services is about 2.1 times the size of HCL Technologies. HCL Technologies kept 12.8% of revenue as net profit in FY2026; Tata Consultancy Services kept 18.5% of revenue as net profit in FY2026.
Full ten-year tables and charts are on each company's page: HCL Technologies · Tata Consultancy Services.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- Services growthIT and business services are most of the revenue; their growth sets the base case.
- Engineering and R&DHCLTech is one of the strongest Indian firms in engineering services, which follows clients' product-development budgets.
- Growth in constant currencyTCS earns mostly in dollars, pounds and euros. Constant-currency growth shows how demand is holding up; the rupee then adds to or subtracts from it.
- Operating marginTCS has held one of the highest margins in the industry. On revenue this size, every point of margin is worth thousands of crores of profit.
05What could go wrong
- Client budget cutsDiscretionary IT and engineering projects are cut first when clients tighten budgets.
- Ageing softwareSome acquired products serve mature markets where revenue can shrink.
- Client budget cutsBanks and retailers in the US and Europe trim discretionary IT spending first in a downturn.
- Visa and immigration costsHigher costs for US work visas make onsite delivery more expensive.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is HCL Technologies or Tata Consultancy Services better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, HCL Technologies trades at 20.4 times earnings and 4.98 times book value, and Tata Consultancy Services at 16.9 times earnings and 8.13 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between HCL Technologies and Tata Consultancy Services?
HCL Technologies, founded by Shiv Nadar, is India's third-largest IT services company. Tata Consultancy Services is India's largest IT services company and part of the Tata group, which holds the majority of its shares.
Are HCL Technologies and Tata Consultancy Services valued the same way?
Yes — both on discounted cash flow, so their workings compare like for like.
What does today's price assume for HCL Technologies and Tata Consultancy Services?
Worked backwards from the share price, HCL Technologies needs about 0% growth and Tata Consultancy Services about 0% growth, against 10% and 7% in their own records.