Shares of HCL Technologies took a sharp nosedive, plummeting by more than 10% to Rs 1,289 on the NSE due to negative investor sentiment following a lackluster quarterly performance and a subdued growth outlook. This decline was triggered by multiple brokerages downgrading the stock and reducing their target prices, citing concerns over weak revenue growth, margin pressures, and cautious future guidance. HCL Technologies projected a modest 1–4% year-on-year revenue growth in constant currency terms for FY27, following a 3.9% growth in FY26, missing its earlier guidance of 4–4.5%.
The company’s services segment outlook also disappointed, with an anticipated growth of 1.5–4.5%, lower than the 4.8% recorded in FY26. This disappointing performance led to a significant decrease in shareholder wealth, with the company’s market capitalization dropping by approximately Rs 38,000 crore to around Rs 3.53 lakh crore. For the March quarter, revenue stood at $3.7 billion, marking a 3.3% sequential decline in constant currency, falling short of market expectations.
Management attributed the weak performance to various factors, including reduced discretionary IT spending by two major US telecom clients, cancellation of two SAP-related projects, and client-specific challenges in the retail and manufacturing sectors. These issues are expected to impact FY27 services growth by about 50 basis points. Additionally, the company highlighted a softer demand outlook in Europe due to geopolitical uncertainties and estimated a 200–300 basis point deflationary impact from artificial intelligence on traditional IT services.
Brokerages responded cautiously, with Jefferies adopting a bearish stance by downgrading the stock to “Underperform” and reducing its target price to Rs 1,165. Citi, while maintaining a “Neutral” rating, lowered its target price to Rs 1,385, citing weak revenue performance, subdued deal wins, and sluggish forward indicators such as modest growth in deal bookings and headcount.
