TCS vs HCLTech: Q3 FY26 Performance Comparison, Growth, AI Momentum, and Deal Wins

India’s top IT services companies, Tata Consultancy Services (TCS) and HCL Technologies (HCLTech), reported their Q3 FY26 results for the quarter ended December 31, 2025. While both companies delivered steady performance amid a cautious global demand environment, their growth drivers, AI strategies, and financial metrics highlight distinct strengths.

TCS vs HCLTech: Q3 FY26 Snapshot Comparison

Tata Consultancy Services

TCS reported its consolidated financial results under Ind AS and IFRS, delivering stable sequential performance with strong margins and accelerating AI revenues.

For the December 2025 quarter (Q3FY26), TCS posted revenue of ₹67,087 crore, reflecting a 2.0% quarter-on-quarter increase, with 0.8% sequential growth in constant currency. Operating margins remained resilient at 25.2%, indicating disciplined cost management despite a volatile macro environment.

Net income stood at ₹13,438 crore, marking an 8.5% year-on-year increase, while net margin improved to 20.0%, expanding 40 basis points QoQ. Cash flow from operations was particularly strong at 130.4% of net income, reinforcing TCS’s balance sheet strength.

AI Growth and Strategic Investments

TCS’ annualised AI services revenue reached $1.8 billion, growing 17.3% QoQ in constant currency, underlining strong enterprise demand for AI-led transformation.

A major strategic highlight was TCS’s partnership with TPG, aimed at scaling its AI data center platform HyperVault. This collaboration will support the creation of gigawatt-scale, AI-ready data center infrastructure, positioning TCS as a global leader in AI-enabled technology services.

Additionally, TCS announced the acquisition of Coastal Cloud, a Salesforce Summit Partner with over 400 professionals and 3,000 multi-cloud certifications, strengthening its AI-led consulting and Salesforce capabilities across Sales, Service, and Marketing.

TCS also expanded its collaboration with Google Cloud by adopting Gemini Enterprise, enabling its workforce to build advanced agentic AI solutions that integrate custom and pre-built AI agents into enterprise workflows.

Deal Momentum and Shareholder Returns

TCS reported a Q3 Total Contract Value (TCV) of $9.3 billion, signalling healthy deal activity. The company declared a dividend of ₹57 per share, including a special dividend of ₹46, with a record date of January 17, 2026, and payment scheduled for February 3, 2026.

HCL Technologies

HCLTech delivered robust revenue growth and deal momentum, supported by its services portfolio, digital offerings, and rising AI adoption.

For Q3 FY26, HCLTech reported revenue of ₹33,872 crore, growing 6.0% QoQ and 13.3% YoY. In constant currency terms, revenue increased 4.2% QoQ and 4.8% YoY, while US dollar revenue reached $3,793 million, up 4.1% sequentially.

The services business continued its upward trajectory, with services revenue rising 1.8% QoQ and 5.0% YoY in constant currency. Digital services remained a key growth engine, expanding 17.7% YoY and accounting for 43.2% of total services revenue.

HCLTech’s advanced AI revenue touched $146 million, growing 19.9% QoQ in constant currency, reflecting increasing enterprise adoption. The software segment also remained stable, with HCLSoftware revenue growing 3.1% YoY, and annual recurring revenue reaching $1.07 billion.

Profitability And Capital Efficiency

HCLTech posted EBIT of ₹6,285 crore, representing 18.6% of revenue, with 13.2% QoQ growth. EBIT margin was impacted by 81 basis points due to restructuring costs.

Net income stood at ₹4,795 crore, accounting for 14.2% of revenue, and grew 13.2% sequentially. The company continued to demonstrate strong capital efficiency, with ROIC at 39.4%, improving 277 basis points YoY, and free cash flow conversion at 120% of net income.

HCLTech declared a dividend of ₹12 per share, marking its 92nd consecutive quarter of dividend payouts.

Deal Wins and Outlook

Deal momentum remained strong, with new deal wins TCV of $3.0 billion, up 17.0% QoQ and 43.5% YoY, highlighting a resilient order pipeline.

For FY26, HCLTech maintained its guidance, projecting company revenue growth of 4.0%–4.5% YoY in constant currency, services growth of 4.75%–5.25%, and EBIT margins of 17.0%–18.0%.

Also Read: TCS Q3FY26 Earnings Indicate Company Received US$1.8 Billion in AI Revenue

Conclusion

Both companies remain well-positioned, but their Q3 FY26 results highlight different strategic priorities: TCS focuses on AI-led scale and infrastructure, while HCLTech emphasises growth velocity and deal execution.

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