HCL Tech vs Tech Mahindra: Which IT Stock Benefits Most from Post-US Election Surge?

The outcome of the US elections has brought increased attention to IT stocks, especially those of Indian companies. The Nifty IT index has gained over 3% since the election results, fueled by expectations of higher spending by US clients and a strong dollar. As many US companies outsource software development to Indian firms, a stronger dollar boosts the profitability of these companies when converting their earnings to rupees. This has led to a positive impact on stock prices.

Stock Price Trends

As of November 25, HCL Technologies share price is trading at ₹1,895, reflecting a 27.72% year-to-date (YTD) increase. Its stock reached a 52-week high of ₹1,919.95 and has risen significantly from its 52-week low of ₹1,235. In comparison, Tech Mahindra share price has outperformed with a 34.95% YTD rise, currently priced at ₹1,750.55, with a 52-week high of ₹1,767.80 and a low of ₹1,162.95.

Over the past year, both stocks have shown positive growth, with HCL Tech rising by over 43% and Tech Mahindra increasing by over 45%. In the last 5 years, HCL Technologies Ltd has seen a substantial 235.96% increase in its stock price, rising from ₹1,072.15 in May 2019. In comparison, Tech Mahindra Ltd has experienced a 129.90% gain, also starting at ₹1,072.15 in the same period. HCL Technologies has delivered a significantly higher return over the last 5 years. 

Q2 FY25 Earnings Comparison

• HCL Tech

In the September quarter, HCL Tech raised its FY25 revenue growth outlook to a range of 3.5-5%, driven by stronger client spending. It reported a net profit of ₹4,235 crore, marking a 10.5% year-on-year growth but no change sequentially. Revenue reached ₹28,862 crore, a rise of 8.2% year-on-year and 2.9% sequentially. In US dollar terms, revenue grew by 6.8% year-on-year and 2.4% sequentially. The company also secured a Total Contract Value (TCV) of $2.2 billion, up from $1.96 billion in the previous quarter.

• Tech Mahindra

Tech Mahindra’s net profit more than doubled in Q2 FY25, reaching ₹1,250 crore, supported by special income from asset sales, strong performance in European and non-American markets, and growth in the BFSI (Banking, Financial Services, and Insurance) segment. Its revenue rose by 3.49% year-on-year to ₹13,313 crore. The company also secured new deals worth USD 603 million during the quarter.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.