HCL vs TCS: A Comparative Analysis of Q2 FY26 Results

As two of India’s IT giants, HCLTech Ltd and Tata Consultancy Services (TCS) recently released their Q2 FY26 earnings, providing interesting insights into their growth trajectories, operational efficiencies, and strategic focus areas. Let’s break down their quarterly results and see how this industry leaders stack up against each other.

HCLTech vs TCS Q2 FY26

Revenue Growth & Segment Performance

HCLTech reported a 5.2% quarter-on-quarter (QoQ) revenue growth, reaching ₹31,942 crore, driven by strong momentum in strategic verticals like digital and AI services. Their year-on-year (YoY) growth stood at 10.7%. A notable highlight was the “Advanced AI” segment, which surpassed $100 million in revenue during the quarter, showcasing the company's push into cutting-edge tech.

In comparison, TCS posted revenue of ₹65,799 crore, growing 3.7% QoQ and showing 0.8% growth in constant currency terms. TCS's growth was broad-based, led by key sectors such as BFSI (+1.1% QoQ CC), TSS (+1.8% QoQ CC), Life Sciences & Healthcare (+3.4% QoQ CC), and Manufacturing (+1.6% QoQ CC), reflecting its diversified client base.

Profitability & Margins

HCLTech’s EBIT grew 12.3% sequentially to ₹5,550 crore, with margins improving by 110 basis points (bps) to 17.4%. Net earnings rose 10.2% QoQ to ₹4,235 crore but were flat YoY, affected by higher employee and deal costs. The net margin stood at 13.3%, up 60 bps QoQ but down 140 bps YoY.

TCS demonstrated a stronger margin profile with an operating margin of 25.2%, expanding by 70 bps QoQ. Net income was ₹12,904 crore, up 8.4% YoY, with an impressive net margin of 19.6%. TCS also showcased robust cash flow, with operations generating 110.1% of net income, highlighting operational efficiency.

Outlook & Dividend

HCLTech reaffirmed its FY26 guidance with revenue growth expected between 3%–5% YoY (constant currency) and EBIT margin forecast between 17%–18%. The company declared a dividend of ₹12 per share, marking its 91st consecutive quarterly dividend.

TCS’s Q2 contract wins totaled a hefty US$10 billion, reinforcing its strong pipeline. The company declared a dividend of ₹11 per share, with payments scheduled in November 2025.

Also Read: HCLTech Becomes First Indian IT Firm to Report AI Revenue of Over $100M in Q2FY26

Conclusion

While both companies continue to exhibit strong growth and profitability, TCS maintains a higher margin profile and larger scale, benefiting from broad-based vertical growth and consistent operational efficiency. On the other hand, HCLTech is making notable strides in digital and AI services, with solid sequential revenue gains and a sharp focus on innovation-driven verticals.

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