We hosted the management of HCL Technologies (HCLT) for a two-day NDR in London on 16th-17th Jul’25. Discussions focused heavily on GenAI, delivery model evolution, and margin outlook. Management clearly outlined its strategy of investing in GenAI without sacrificing its financial discipline. It expects margins to recover to its earlier run rate by FY27. Utilization pressures from delayed rampups should ease soon, whereas restructuring-linked costs are expected to fade in FY27. The company believes GenAI tools are not usable without enterprise-level customization, and its “AI force" platform helps enterprises do exactly that. GenAI adoption is still building up toward boardroom-level urgency, and HCLT sees this happen over the next 12-24 months.
OutlookThe company's allweather portfolio gives it stability during tech transitions and better margin resilience as GenAI disruption accelerates. Reiterate BUY with a TP of INR2,000 (based on 26x FY27E EPS).
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