Tech Titans of India: A Comprehensive Guide to India’s Top IT Stocks
The Indian IT industry is a global powerhouse, contributing to the nation’s economic growth. With the digital revolution accelerating, this industry has the potential to offer exciting opportunities for investors. But with several IT companies eying for attention, exploring the technology landscape of the economy can be challenging.
Indian IT stocks are consistently attracting increasing interest for prominent reasons, including a robust expected CAGR of 11-12% in the coming years and a solid global footprint catering to clients across continents.
In today’s blog, we will uncover some of the Top IT stocks in India and do their comparative analysis to gain valuable insights.
Tata Consultancy Services (TCS)
About
Tata Consultancy Services is an Indian multinational IT services and consulting company. TCS is headquartered in Mumbai, India, with 614,000 trained consultants in 55 countries.
The company was founded in 1968, when Mr. Fakir Chand Kohli, known as the Father of the Indian IT industry, brought together a young team of IT professionals to create a demand for computer services.
TCS offers a range of IT services, which include – helping clients with business transformation, strategy and design thinking, integrating different IT systems and applications, IT outsourcing services to clients, including application development and business process outsourcing, and providing cloud-based services such as infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS).
TCS Performance Analysis
| Key Metrics | As on 31st March 2023 (FY2023) | As of 31st March 2022 (FY2022) |
| Revenue | 2,25,458 | 1,91,754 |
| Net Profit | 42,303 | 38,449 |
| Fixed Assets | 20,515 | 21,298 |
| Borrowings | 7,688 | 7,818 |
| EPS | 115.19 | 104.75 |
| Investments | 37,163 | 30,485 |
| ROCE (%) | 59% | 54% |
Infosys
About
Infosys is a global IT services and consulting company that offers digital services and consulting. The company was established in 1981 in Pune by N.R. Narayana Murthy with a capital of $250 and is currently operating with 322,000 employees in over 56 countries to navigate global transformation. It is headquartered in Bangalore, India.
Initially, the company focused on providing software consulting and development services to US clients. With time, the company pioneered the Global Delivery Model (GDM), which allowed remote execution with cost advantage. The tech giant went public in the year 1992.
Services offered by Infosys are as follows
- Infosys helps clients navigate their digital journeys through AI-powered solutions, agile development and cloud implementation.
- The company offers consulting services in areas like business strategy, enterprise resource planning (ERP), and customer relationship management (CRM)
- Apart from this, it also provides a range of IT services, including application development, infrastructure management, and security solutions
- Infosys offers outsourcing services for businesses looking to optimize costs and improve efficiency.
Did You Know?
Infosys was the first IT company from India to be listed on NASDAQ.
Infosys Performance Analysis
| Key Metrics | As on 31st March 2023 (FY2023) | As on 31st March 2022 (FY2022) |
| Revenue | 1,46,767 | 1,21,641 |
| Net Profit | 24,108 | 22,146 |
| Fixed Assets | 29,225 | 25,800 |
| Borrowings | 8,299 | 5,474 |
| EPS | 58.08 | 52.56 |
| Investments | 19,478 | 20,324 |
| ROCE % | 40% | 37% |
HCL Technologies
About
Earlier known as Hindustan Computers Limited, it is another crucial player in the Indian technology industry. The company is headquartered in Noida, India, and currently operates with a staff strength of over 225,944.
HCL Technologies offers a range of tech services which includes
- Navigating the digital journeys of clients with a focus on cloud, AI, automation, and security
- Engineering designs, development, and testing services for several industries
- Providing cloud migration, management and optimisation solutions.
- Helping clients protect their data and systems from cyber threats
- Managing and supporting IT infrastructure for businesses.
HCL Technologies Performance Analysis
| Key Metrics | As of 31st March 2023 (FY2023) | As of 31st March 2022 (FY2022) |
| Revenue | 101,456 | 85,651 |
| Net Profit | 14,851 | 13,523 |
| Fixed Assets | 34,619 | 35,077 |
| Borrowings | 4,794 | 6,343 |
| EPS | 54.73 | 49.74 |
| Investments | 5,495 | 6,351 |
| ROCE % | 28% | 25% |
Did You Know?
HCL is the top-ranked company globally in the Professional Service Sector in Forbes’ List of “World Best Employers”.
Wipro
About
Wipro is a leading technology services and consulting company that focuses on building innovative solutions addressing clients’ most complex digital transformation, needs with over 245,000 employees serving across 65 countries. Wipro boasts a global presence and diverse portfolio of catering to clients.
The company was founded in 1945 by M.H. Hasham Premji and initially emphasised consumer goods and vegetable oils. In the late 90s, Wipro diversified its business operations into the IT business under the leadership of Azim Premji, who is still a respected figure in the Indian IT industry and one of the top investors in India.
Wipro offers a range of IT services which includes:
- Helping businesses migrate to the cloud and leverage its benefits for scalability and efficiency.
- Providing consulting and implementation services to help companies adapt to the digital age.
- Creating and maintaining custom software applications for several needs.
- Developing and implementing AI-powered solutions and integrating robotic automation for advanced functions.
- Managing and optimising non-core business processes for cost savings and improved efficiency.
Wipro Performance Analysis
| Key Metrics | As of 31st March 2023 (FY2023) | As of 31st March 2022 (FY2022) |
| Revenue | 90,487 | 79,312 |
| Net Profit | 11,366 | 12,243 |
| Fixed Assets | 44,757 | 37,990 |
| Borrowings | 17,467 | 17,593 |
| EPS (in INR) | 20.68 | 22.31 |
| Investments | 33,073 | 26,154 |
| ROCE % | 18% | 21% |
Tech Mahindra
About
Just like the other tech companies mentioned here, Tech Mahindra is a leading Indian multinational provider of information and technology services. The company offers innovative and customer-centric digital experiences that enable enterprise, associates, and society value creation.
Tech Mahindra is a part of the Mahindra Group, which was founded in the year 1945. Currently, the company employs 260,000 employees with presence in over 100 countries
The company offers a range of services, which include:
- Designing, creating, and scaling pluggable and extensible digital products for powering development in silicon, storage, and platform engineering
- Delivering convincing experiences and implementing a modern digital backbone to provide future-proofing technology to provide services-as-a-service (SaaS), cognitive IT, and modernization.
- Delivering superior experiences, value, and growth by focusing on customers.
Tech Mahindra Performance Analysis
| Key Metrics | As of 31st March 2023 (FY2023) | As of 31st March 2022 (FY2022) |
| Revenue | 53,290 | 44,646 |
| Net Profit | 4,857 | 5,630 |
| Fixed Assets | 14,932 | 14,784 |
| Borrowings | 2,740 | 2,618 |
| EPS (in INR) | 49.60 | 57.27 |
| Investments | 3,388 | 4,884 |
| ROCE % | 22% | 26% |
Top IT Companies – A Comparative Analysis
Return on Equity (ROE)
| Company Name | 10 Years | 5 Years | 3 Years |
| TCS | 39% | 41% | 43% |
| Infosys | 26% | 28% | 29% |
| HCL Technologies | 24% | 23% | 22% |
| Wipro | 19% | 18% | 18% |
| Tech Mahindra | 21% | 20% | 19% |
Comparison on multiple metrics
| Particulars | TCS | Infosys | HCL Technologies | Wipro | Tech Mahindra |
| Market Cap (In INR Crores) | 15,12,231 | 6,98,811 | 4,40,428 | 2,56,231 | 1,27,933 |
| Current Market Price (In INR) | 4,133 | 1,684 | 1,623 | 490 | 1,311 |
| PE Ratio (In times) | 33.18x | 28.63x | 28.31x | 22.63x | 45.52x |
Note – The figures are as on 9th February, 2024.
Growth Prospects – Indian IT Sector
Below are some key points that can fuel the growth of the Indian tech industry in the coming years.
- India’s rapid digitalisation and demand for IT services across industries consistently boost domestic growth.
- Investments in AI, cloud computing, and cybersecurity are preparing them for future trends and market leadership.
- India’s large pool of tech talent offers a cost-efficient and continuous supply of competent individuals.
- Many IT companies in India have a strong global presence, fulfilling the requirements of international clients and mitigating economic risks.
- These factors promote innovation in the industry, which is extremely important for its growth.
Conclusion
Having explored the top IT stocks, you now have a solid foundation in the Indian IT sector.
With its impressive growth trajectory, diverse offerings, global presence, and talented workforce, this industry holds immense potential for growth!
Frequently Asked Questions (FAQs)
1. What are the most important factors to consider when investing in IT stocks?
Ans. Consider factors like revenue growth, profitability, liabilities, and earnings per share to grasp the companies’ operating efficiency.
2. How can I stay informed about the Indian IT stocks?
Ans. Keep yourself updated with the industry news, and do your research and analysis.
3. How do these IT companies attract and retain talent?
Ans. Top Indian IT companies offer competitive salaries, invest in employee training and development programmes, and foster an innovative work culture that eventually attracts employees.
4. Which IT stock is best for long-term investors seeking growth?
Ans. Every stock has its own set of strengths and weaknesses. So, the investors should do a thorough analysis before investing their hard earned money.
5. How are Indian IT companies preparing themselves for the future?
Ans. They are upskilling their workforce with a significant focus on automation and AI, and adapting to remote work models.
Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.
