Infosys vs HCLTech (2026): Growth, Margins, Valuation, AI & Which Is Better?
Infosys is currently the more profitable and cheaper company on several core ratios. HCLTech is the higher-yielding stock with stronger latest profit growth and a particularly interesting AI-and-infrastructure growth angle.
The comparison is more nuanced than market-cap rankings suggest. Infosys has the higher ROE, ROCE, operating margin and net margin. HCLTech has a larger five-year free-cash-flow figure in Bull Run's current dataset, a slightly higher dividend yield and reported record Q1 bookings of $2.4 billion.
The headline growth rates look almost identical. The economics underneath them are not.
Infosys and HCLTech both reported nearly 14% year-on-year rupee revenue growth in Q1 FY2027.
Infosys grew reported revenue 14.0% to ₹48,211 crore.
HCLTech grew reported revenue 13.9% to ₹34,579 crore.
In constant currency, however, Infosys grew 2.4% year on year and HCLTech 2.6%.
The real differences therefore appear in profitability, deal mix, capital efficiency, AI exposure and valuation rather than headline rupee revenue growth.
Infosys vs HCLTech: current financial scoreboard
| Metric | Infosys | HCLTech | Current Edge |
|---|---|---|---|
| Market capitalisation | ₹437,177 Cr | ₹316,875 Cr | Infosys |
| P/E | 14.43x | 18.19x | Infosys |
| P/B | 4.71x | 4.22x | HCLTech slightly |
| Industry P/E | 22.33x | 22.33x | Both below benchmark |
| ROE | 31.21% | 22.98% | Infosys |
| ROCE | 38.54% | 28.37% | Infosys |
| Net profit margin | 16.41% | 12.97% | Infosys |
| 5-year sales growth | 12.20% | 11.54% | Infosys slightly |
| 5-year profit growth | 8.75% | 8.35% | Nearly tied |
| 5-year EPS growth | 9.43% | 8.40% | Infosys |
| 5-year operating margin | 25.60% | 22.92% | Infosys |
| 5-year free cash flow | ₹32,515 Cr | ₹92,709 Cr | HCLTech on current database series |
| Dividend yield | 4.46% | 4.62% | HCLTech slightly |
| Debt-to-equity | 0.00 | ~0.00 | Both |
| Operating cash flow / net profit | 1.15x | 1.20x | HCLTech slightly |
| Promoter holding | 14.55% | 60.81% | Different ownership models |
| FII holding | 28.45% | 15.51% | Infosys |
| DII holding | 43.19% | 18.95% | Infosys |
| Bull Run Score | 60.4/100 | 65.8/100 | HCLTech |
Infosys currently earns more from every rupee of capital
Capital efficiency is one of the clearest differences between these companies.
Infosys has ROE of about 31.2% and ROCE of roughly 38.5%.
HCLTech's ROE is approximately 23.0%, while ROCE is about 28.4%.
Those are still strong figures for HCLTech, but the gap is meaningful.
Infosys also reports the higher net profit margin in Bull Run's current dataset at roughly 16.4%, compared with HCLTech near 13.0%.
This means Infosys currently converts both revenue and capital into bottom-line profit more efficiently.
HCLTech had the stronger Q1 profit acceleration
HCLTech's Q1 FY2027 net income increased 20.3% year on year to ₹4,624 crore.
Infosys's net profit rose 12.2% to ₹7,769 crore.
Infosys therefore remains much larger in absolute quarterly profit, but HCLTech's growth rate was substantially faster.
HCLTech also reported EBIT growth of 18% year on year.
That performance is one reason its Bull Run Score currently sits above Infosys despite the lower ROE and ROCE.
The margin comparison needs one adjustment
Infosys reported operating margin of 21.1%; HCLTech reported EBIT margin of 16.9%, but HCLTech's quarter included restructuring costs.
HCLTech said the restructuring impact reduced EBIT margin by 62 basis points.
Excluding that restructuring cost, HCLTech's EBIT margin was approximately 17.5%.
Even after adjusting, Infosys retains a sizable margin advantage.
HCLTech's FY2027 EBIT-margin guidance is 17.5% to 18.5%.
Infosys retained operating-margin guidance of 20% to 22%.
The guidance bands therefore suggest the profitability gap is structural rather than merely a one-quarter accounting effect.
HCLTech's Q1 booking number was its highest ever for a first quarter
HCLTech reported $2.407 billion of new-deal TCV in Q1 FY2027, describing it as its highest-ever Q1 bookings.
Infosys reported $3.6 billion of large-deal TCV, with 61% net new.
Infosys therefore has the higher absolute Q1 deal number under its own reported large-deal definition.
HCLTech's achievement is interesting because it came alongside a specific expansion in AI infrastructure and engineering work rather than only traditional outsourcing renewals.
The company highlighted an incremental AI Factory engagement worth more than $180 million with a global technology company, along with semiconductor and physical-AI engineering wins.
HCLTech is giving investors one of the clearest AI revenue disclosures in Indian IT
HCLTech reported Advanced AI revenue of $171 million in Q1 FY2027, up 62.1% year on year in constant currency.
Sequential constant-currency AI growth was 10.6%.
This is a smaller absolute revenue stream relative to the total company, but the growth rate is significant.
HCLTech has also announced plans to invest up to ₹3,500 crore to establish AI data centres.
That makes its AI strategy somewhat more infrastructure-intensive than the consulting, platforms and enterprise transformation framing investors typically associate with Infosys Topaz.
Infosys's AI strategy is broader, but less separately quantified
Infosys is embedding AI into consulting, transformation programmes, software engineering and enterprise platforms rather than reporting the same Advanced AI revenue line as HCLTech.
The company says AI-led momentum is increasingly converting into actual revenue and continues to position Infosys Topaz at the centre of its enterprise transformation strategy.
Its $3.6 billion Q1 large-deal TCV and 61% net-new share provide some evidence that clients continue to award substantial transformation programmes.
The analytical difference is therefore disclosure style as much as strategy.
HCLTech gives investors a specific AI revenue metric. Infosys gives investors larger-deal and overall business metrics around its AI strategy.
Which company has the better FY2027 growth outlook?
HCLTech currently offers the wider potential guidance range, while Infosys has narrowed its upper bound.
HCLTech guides for 1% to 4% company revenue growth in constant currency and 1.5% to 4.5% services revenue growth.
Infosys narrowed its constant-currency revenue guidance to 1.5% to 3.0% after Q1.
The ranges overlap substantially.
HCLTech's upper end is higher, but guidance should not be treated as a forecast guarantee. It describes management's current expectation under prevailing demand conditions.
Infosys is cheaper despite stronger capital efficiency
Infosys currently trades at approximately 14.4x earnings, compared with HCLTech at roughly 18.2x.
That is notable because Infosys simultaneously has the higher ROE, ROCE, margin and five-year EPS growth.
HCLTech's higher valuation may partly reflect its stronger latest profit growth, higher current Bull Run Score, dividend yield, infrastructure exposure and AI-revenue momentum.
But on static valuation-plus-quality numbers, Infosys currently looks more demanding to dismiss.
HCLTech has the higher current dividend yield
HCLTech's current dividend yield is approximately 4.62%, narrowly ahead of Infosys at 4.46%.
HCLTech declared a ₹12 per share dividend with its Q1 FY2027 results.
For investors seeking regular IT-sector cash distributions, both companies currently offer yields that are high relative to many large Indian technology businesses.
The gap between them is too small to make dividend yield the sole deciding factor.
Payout sustainability and earnings growth matter more.
The free-cash-flow comparison favours HCLTech in Bull Run's current five-year field
Bull Run currently records approximately ₹92,709 crore of five-year free cash flow for HCLTech versus ₹32,515 crore for Infosys.
This figure should be read together with each company's own reported cash-conversion metrics rather than treated as an isolated ranking.
HCLTech reported LTM FCF-to-net-income conversion of 99% in Q1 FY2027.
Infosys has historically maintained strong FCF conversion and reported ₹33,097 crore of FY2026 free cash flow, equivalent to 112.3% of net profit.
Both businesses therefore generate substantial cash.
Balance-sheet risk is low for both
Infosys is effectively debt-free and HCLTech's debt-to-equity ratio is also effectively zero.
Infosys has interest coverage of roughly 97x and current ratio near 1.98x.
HCLTech has interest coverage around 26.4x and current ratio near 2.22x.
Neither company faces a conventional leverage constraint.
The more important balance-sheet question is how each allocates its large cash generation between dividends, buybacks, acquisitions, data-centre investments and capability building.
The recent stock performance tells a different story from the fundamentals
HCLTech has clearly outperformed Infosys over the latest three-month and one-year periods.
| Period | Infosys | HCLTech |
|---|---|---|
| 1 month | +9.90% | +3.52% |
| 3 months | -1.37% | +12.92% |
| 6 months | -11.26% | -4.20% |
| 1 year | -25.33% | -12.52% |
| Distance from 52-week high | -33.80% | -26.08% |
| RSI (14) | 47.52 | 43.25 |
HCLTech's relative resilience helps explain why its P/E remains above Infosys's despite lower current return ratios.
The market is assigning value to its more recent earnings momentum and AI/infrastructure narrative.
Institutional ownership is much heavier in Infosys
Infosys has substantially higher FII and DII ownership, while HCLTech has much higher promoter ownership.
Infosys promoter holding is about 14.55%, FII holding around 28.45% and DII ownership approximately 43.19%.
HCLTech promoter holding is approximately 60.81%, with FII ownership around 15.51% and DII ownership about 18.95%.
Neither company currently shows promoter pledging.
The distinction affects float and investor composition but does not by itself determine business quality.
Infosys: what the current numbers say
Quality
- 31.2% ROE.
- 38.5% ROCE.
- 21.1% Q1 operating margin.
- 16.4% net margin.
- Debt-free balance sheet.
Valuation
- 14.4x trailing P/E.
- 4.71x price-to-book.
- 4.46% dividend yield.
- Trades below current IT-industry P/E.
Main risk
- FY27 guidance narrowed.
- One-year share-price return remains weak.
- Revenue acceleration remains modest in constant currency.
- Leadership transition adds an additional variable.
HCLTech: what the current numbers say
Momentum
- 20.3% Q1 net-income growth.
- Record Q1 bookings of $2.407 billion.
- Advanced AI revenue up 62.1% YoY CC.
- Stronger recent share-price performance.
Income and cash
- 4.62% dividend yield.
- 99% LTM FCF/NI conversion.
- ₹92,709 crore five-year FCF in Bull Run's current field.
- Effectively debt-free balance sheet.
Main risk
- Operating margin below Infosys.
- ROE and ROCE below Infosys.
- Higher trailing P/E.
- Large AI infrastructure investments need adequate returns.
Infosys vs HCLTech: which wins each category?
Market capitalisation: Infosys.
Trailing P/E: Infosys.
P/B: HCLTech slightly.
ROE: Infosys.
ROCE: Infosys.
Operating margin: Infosys.
Net profit margin: Infosys.
Q1 profit growth: HCLTech.
Q1 deal TCV: Infosys on absolute reported large-deal value.
Specific AI revenue growth disclosure: HCLTech.
Dividend yield: HCLTech slightly.
Recent market performance: HCLTech.
Bull Run Score: HCLTech.
Infosys vs HCLTech FAQs
Which is cheaper?
Infosys on trailing P/E at roughly 14.4x versus HCLTech at about 18.2x.
Which has better ROE?
Infosys, at roughly 31.2% versus HCLTech at about 23.0%.
Which has better ROCE?
Infosys, at approximately 38.5% compared with HCLTech at around 28.4%.
Which grew profit faster in Q1 FY2027?
HCLTech, with 20.3% year-on-year net-income growth compared with Infosys at 12.2%.
Which has a higher dividend yield?
HCLTech, although the difference is small: approximately 4.62% versus 4.46% for Infosys.
Which has the better operating margin?
Infosys. Its Q1 FY2027 operating margin was 21.1%. HCLTech reported 16.9%, or roughly 17.5% excluding restructuring costs.
Which has performed better over one year?
HCLTech. Bull Run's August 25, 2026 data shows HCLTech down about 12.5% over one year versus Infosys down about 25.3%.
Research sources
Disclaimer
This comparison is educational and informational only. Financial and market data is based on company Q1 FY2027 disclosures and Bull Run's August 25, 2026 snapshot. Reported deal definitions, AI metrics and margin measures can differ between companies. Valuation ratios, ownership, yields and market prices change over time. Nothing here recommends buying, selling or holding Infosys, HCLTech or any other security. Bull Run is not a SEBI-registered Research Analyst or Investment Adviser.