Buy HCL Technologies; target of Rs 1800: Motilal Oswal

Motilal Oswal's research report on HCL Technologies

HCL Technologies (HCLT) reported 2QFY26 revenue of USD3.6b, up 2.4% QoQ CC vs. our estimate of 1.7% QoQ CC growth. EBIT margin came in at 17.4% vs. our estimate of 16.8%. New deal TCV stood at USD2.6b (up 15.8% YoY) in 2QFY26. For FY26, revenue growth guidance was maintained at 3-5% YoY in CC (while for Services, guidance was upgraded to 4-5% from 3-5%). EBIT margin guidance was maintained at 17.0-18.0%. For 1HFY25, revenue/EBIT grew 9.4%/3.3% and PAT declined 4.9% YoY in INR terms. We expect revenue/EBIT/PAT to grow 10.2%/4.5%/10.2% YoY in 2HFY26. HCLT is the fastest-growing large-cap IT services company, and its all-weather portfolio remains the best large-cap bet in an uncertain macro environment (refer to our report dated 22th July’25, HCLT: Becoming Future Ready, following our two-day NDR with the management).

Outlook

We reiterate our BUY rating on HCLT with a TP of INR1,800, implying a 20% potential upside.

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