15 hours ago
Shares of HCL Technologies (HCLTech) Ltd., India's third largest IT exporter, opened with gains of as much as 6% on Wednesday, April 23. The stock is also the top gainer on the Nifty 50 index after reporting its March quarter results, which were largely in-line with expectations.
HCLTech's full year revenue guidance of 2-5% growth at constant currency (CC) was still higher than the guidance of 0-3% growth given by Infosys, the bigger peer. The EBIT margin guidance was maintained between 18% to 19%.
The technology services provider reported constant currency revenue decline of 0.8% compared to the previous quarter but up 2.9% on a year-on-year basis.
Out of the 46 analysts that have coverage on HCL Technologies, 22 of them have a 'Buy' rating, 16 say 'Hold', while eight of them have a 'Sell' rating on the stock.
Brokerage firm Nuvama said the HCLTech stock has corrected sharply, down 23% so far in 2025, and now offers a highly attractive 4.2% dividend yield at current valuations.
HCLTech has reported the highest revenue growth in the large-cap IT services space for three consecutive years. Based on its guidance, it is expected to repeat the feat in FY26 as well, according to Nuvama.
This strong performance has led to a sharp rerating of the stock over the past two years — a trend Nuvama believes should sustain. The brokerage has upgraded HCLTech to a 'Buy' from its earlier 'Hold' rating and set a price target of ₹
1,700 per share.
Citi has a 'Neutral' rating on HCLTech, with a price target of ₹1,510 per share.
The foreign brokerage said the company reported a largely in-line Q4 performance, along with guidance that met expectations. It described the fourth quarter as "decent" given the broader environment and peer performance.
While new deal TCV was strong in Q4, it was still down 5% year-on-year, Citi wrote in its report.
Management highlighted that the environment remains very uncertain but said it will continue to look for opportunities. Citi also pointed out that the company’s guidance implies a 0% CAGR across all quarters of FY26.
Citi has tweaked its FY26 and FY27 earnings per share (EPS) estimates by 2% each and has revised its valuation multiple to 22x (earlier 23x), citing lower growth expectations.
Morgan Stanley has an 'Equal-weight' recommendation on HCLTech, with a price target of ₹1,600 per share.
The brokerage said that organically guidance would be approximately 1–4% year-on-year growth in constant currency (CC), by its estimates. EBIT margin guidance remains unchanged at 18–19%, which is in line with forecasts.
Shares of HCLTech are trading 5.91% higher on Wednesday in early trading at ₹1,567.30. The stock has declined 18% on a year-to-date basis.
