Q3 Results Highlights: TCS, HCLTech Kick Off IT Earnings Season With Trimmed Profits
Indian IT giants Tata Consultancy Services (TCS) and HCL Technologies (HCLTech) declared their Q3 financial results on Monday, kickstarting a buzzing season. While profit for both companies rode down in the quarter ended December 2025, excitement for the season has only soared.
Key Highlights of TCS Q3 Results
TCS reported a net profit of ₹11,363 crore for the quarter ended December 2025, down 4.5% from the previous quarter. The company’s revenue from operations stood at ₹62,979 crore, up 2.4% quarter-on-quarter. TCS’s operating margin contracted by 130 basis points to 22.2% due to higher employee costs and currency fluctuations.
Despite the trimmed profits, TCS’s management expressed confidence in the company’s growth prospects, citing a strong deal pipeline and increasing demand for digital transformation services. Digital transformation services have been a key growth driver for TCS, with the company reporting a 25% year-on-year increase in revenue from these services.
HCLTech Q3 Results: A Mixed Bag
HCLTech reported a net profit of ₹3,675 crore for the quarter ended December 2025, down 2.5% from the previous quarter. The company’s revenue from operations stood at ₹26,700 crore, up 1.8% quarter-on-quarter. HCLTech’s operating margin expanded by 20 basis points to 17.1% due to improved operational efficiency and cost savings.
HCLTech’s management highlighted the company’s strong performance in the cloud computing services segment, which grew 30% year-on-year. The company also reported a significant increase in demand for its artificial intelligence and machine learning solutions, with several large deals wins during the quarter.
Indian Stock Market Reaction
The Indian stock market reacted positively to the Q3 results of TCS and HCLTech, with both stocks trading higher on the day of the announcement. The Nifty IT index also gained, driven by the optimism surrounding the IT earnings season.
However, the trimmed profits reported by TCS and HCLTech have raised concerns among investors about the impact of global economic uncertainty on the Indian IT sector. The Indian rupee’s depreciation against the US dollar has also been a challenge for Indian IT companies, affecting their profitability and competitiveness in the global market.
Outlook for the IT Earnings Season
Despite the challenges faced by TCS and HCLTech, the outlook for the IT earnings season remains positive. Several other Indian IT companies, including Infosys Ltd and Wipro Ltd, are scheduled to report their Q3 results in the coming weeks.
The Indian stock market is expected to remain volatile in the near term, driven by the IT earnings season and other macroeconomic factors. Investors are advised to stay cautious and keep a close eye on the Nifty levels and other market indicators to make informed investment decisions.
Investment Strategies for Indian Investors
Indian investors looking to invest in the IT sector should consider a long-term perspective, focusing on companies with strong growth prospects and competitive advantages. IT sector stocks such as TCS, HCLTech, and Infosys may be good investment options, given their strong track records and growth potential.
However, investors should also be aware of the risks associated with investing in the IT sector, including the impact of global economic uncertainty and currency fluctuations. A well-diversified investment portfolio, including a mix of large-cap stocks, mid-cap stocks, and small-cap stocks, can help mitigate these risks and provide stable returns over the long term.
