HCL Tech Drops 9% After Weak Q4, FY27 Guidance Slashed
HCL Tech Drops 9% After Weak Q4, FY27 Guidance Slashed
HCL Tech shares slide over 9% after Q4 results miss; FY27 growth guidance of 1-4% in constant currency prompts brokerages to trim targets.
HCL Tech shares fell as much as 9.58% to Rs 1,303 on the NSE after the March quarter results and FY27 guidance disappointed D-Street expectations. The IT major posted Q4 net profit of Rs 4,488 crore, up 4.2% year on year, while revenue from operations rose 12% year on year to Rs 33,981 crore.
On a sequential basis, revenue was up just 0.3% from Rs 33,872 crore in Q3, and in constant currency terms it declined 3.3% quarter-on-quarter but grew 2.4% year on year. In dollar terms, quarterly revenue stood at $3,682 million, down 2.9% sequentially but up 5.3% year on year. The company guided for FY27 revenue growth of 1-4% in constant currency, with services revenue seen rising 1.5-4.5% and EBIT margin in the 17.5-18.5% band. Revenue from advanced AI stood at $155 million during the quarter, reflecting a 6.1% sequential rise in constant currency.
Brokerages trimmed targets following the quarter; Nomura maintained its Buy rating but lowered the target to Rs 1,600 from Rs 1,700, implying around 11% upside. The results underscore the challenges in delivering higher growth amid weak discretionary demand and client-specific headwinds, even as AI-related offerings provide a potential upside trajectory for the firm.
Analysts say the muted FY27 growth and soft discretionary demand point to headwinds for the IT bellwether. Investors will be watching for any signs of demand revival in the coming quarters, while HCL Tech remains a key player in the Indian IT landscape.
