IT services player HCL Technologies Ltd shares slipped on Tuesday, July 15, after the information technology giant reported a disappointing earnings show for the first quarter of the current fiscal year.
HCLTech reported a 10 percent decline in consolidated net profit at Rs 3,843 crore for the quarter ended June 30, 2025, as against Rs 4,257 crore in the year-ago period. However, the IT firm's consolidated revenue from operations rose eight percent to Rs 30,349 crore in Q1FY26 as against Rs 28,057 crore in Q1FY25.
HCLTech’s operating margin dropped to 16.3 percent in Q1, falling 160 basis points from 17.9 percent in Q4FY25. However, it has lowered its operating margin guidance for the full year to 17-18 percent, down from the previous estimate of 18-19 percent.
The company has updated its FY26 constant currency revenue growth forecast to 3-5 percent, raising the upper end from the earlier 2-5 percent range.
At 10.20 a.m., shares of HCL Technologies were quoting Rs 1,555.4, lower by 4 percent on the NSE.
Should you buy, sell, or hold shares of HCL Technologies?
HCL Technologies narrowed the revenue growth guidance on expectations of faster deal ramp-ups, but lowered the margin guidance, reflecting a temporary dip with normalisation expected by Q4FY26E, noted Nuvama Institutional Equities. The brokerage downgraded shares of the IT firm to 'hold' and cut its target price to Rs 1,630, which was earlier Rs 1,700, given valuation concerns.
Emkay Global also trimmed its target price, cutting it to Rs 1,660, while retaining its 'reduce' outlook. The brokerage noted the earnings were weaker-than-expected, as a result of the margin miss. "EBIT margin fell by 170 bps QoQ to 16.3 percent, missing our estimate due to lower utilization, higher investments in S&M and Gen AI, business mix change, and a one-off impact."
Citi Research maintained its 'neutral' call, with a price target of Rs 1,650 per share amid a mixed Q1. No demand deterioration was seen, while the BFSI and Tech verticals were improving, and others were weak.
On the optimistic front, CLSA kept its 'outperform' call intact, with a price target of Rs 1,867 on HCLTech shares. The brokerage is optimistic that EBIT margins will revert to 18-19 percent from FY27.
International brokerage Jefferies upgraded its outlook on HCL Technologies to 'buy', with a higher price target of Rs 1,850 per share. The increase in FY26 growth guidance was among the highest across the top five IT firms in India, driving Jefferies' bullishness. Further, going ahead, investments will drive superior growth and premium valuation.
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