IT stocks to buy after Q1 results 2023: After the announcement of first quarter results of three Indian IT majors — Tata Consultancy Services (TCS), HCL Tech and Wipro. After the announcement of Q1 results for FY24, a big leap in IT stocks has been witnessed as IT stocks are among some limited shares in the Indian stock market, which are available at discounted prices.
In the week gone by, TCS share price ascended over 6.50 percent, Wipro share price surged a little over 3 percent on Friday while HCL Tech share 3.50 percent on Friday session. According to stock market experts, upside movement in IT stocks has come after the announcement of Q1 results of TCS, HCL Tech and Wipro. They said that TCS has reported quarterly numbers that meet the expectations of Dalal Street. However, after a rally in most of the IT stocks, positional investors looking for bargain hunting might feel confused as to which IT stock they should buy after the announcement of Q1 results for the current financial year.
Q1 results 2023: TCS vs HCL Tech vs Wipro
Speaking on TCS Q1 results in 2023, Siddharth Bhaisora, Investment Advisor at Wright Research said, “TCS reported a promising 16.8% YoY growth in net profit and a 12.5% rise in revenue from operations, surpassing analysts’ expectations. Despite a slight sequential decrease in profits and operating margins, the outlook remains optimistic. Their robust total contract value (TCV) suggests a strong business demand and future revenue potential. While margin pressures exist, TCS’s solid market position and its demonstrated ability to navigate challenging market conditions make it a viable investment.”
“With Wipro’s recent Q1 performance, mixed growth predictions, and a cautious outlook for Q2 FY24, the stock may face several short-term pressures. Despite the company’s long-term strategic focus on AI and its ability to secure major contracts, current macroeconomic uncertainties and the potential slowdown in the IT Services segment might impact near-term growth,” Siddharth said.
HCL Technologies, on the other hand, demonstrated a mix of robust YoY growth and sequential downturns. While the YoY growth in net profit was 7.6%, there was an 11.2% sequential drop. This, coupled with a drop in operating margins and lower-than-expected net profit, could be a cause for concern for potential investors.
On which IT major has reported better Q1 results 2023, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “TCS Q1 results 2023 is in sync with the market estimates and the IT major has managed to report improvement on attrition, order book intake and margins that has attracted buying interest of the Indian stock market bulls. However, Wipro results for the first quarter of the current financial year are disappointing and Wipro stock rally is just because of the short-term positive sentiments.”
TCS vs Wipro vs HCL Tech
Gorakshkar went on to add that HCL Tech results for Q1FY23 were neither promising nor disappointing. However, when it comes to comparing the Q1 results of these three IT companies, TCS has delivered comparatively better numbers than HCL Tech and Wipro.
On which IT stocks to buy today, Avinash Gorakshkar of Profitmart Securities said, “TCS shares are the best among the current lot of IT stocks in large-cap and mid-cap segment. However, we need to wait for the Infosys results as well.”
On important levels in regard to TCS shares, Vaibhav Kaushik, Research Analyst at GCL Broking said, “TCS share price has taken support at 3,200 apiece levels. Those who have TCS shares in their portfolio are advised to maintain stop loss at 3,200 levels. The It major may go up to 3,750 in the near term.”
