The IT major reported a 4.2% rise in consolidated net profit for the March quarter at Rs 4,488 crore, compared to Rs 4,307 crore in the same period last year.
Revenue from operations for Q4FY26 came in at Rs 33,981 crore, marking a 12% increase from Rs 30,246 crore recorded in the corresponding quarter of the previous financial year.
The company has guided for revenue growth of 1% to 4% year-on-year (YoY) in constant currency terms, with services revenue expected to grow between 1.5% and 4.5%. EBIT margin is projected in the range of 17.5% to 18.5%.
On a sequential basis, revenue rose marginally by 0.3% from Rs 33,872 crore reported in Q3FY26. However, in constant currency terms, revenue declined 3.3% quarter-on-quarter and grew 2.4% YoY. Revenue in dollar terms stood at $3,682 million, down 2.9% sequentially but up 5.3% compared to last year.
As a result, the company missed its FY26 revenue growth guidance. What was projected at 4%-4.5% growth, came in at 3.9% for the year.
Services revenue in constant currency slipped 0.1% quarter-on-quarter but increased 4.2% year-on-year. Revenue from advanced AI stood at $155 million during the quarter, reflecting a 6.1% sequential rise in constant currency.
What are experts saying?
Nomura has maintained its buy call on HCL Tech, although the brokerage has trimmed its target price to Rs 1,600 from Rs 1,700, implying an upside of about 11%. The firm flagged that FY27 growth guidance is weaker than expected, with two client-specific issues likely to act as headwinds, shaving off around 50 basis points from growth in FY27E. At the midpoint of its guidance, HCL Tech is factoring in no improvement in discretionary demand, along with a ramp-down in business from these two clients beyond earlier expectations.
Nomura now expects the company to deliver revenue growth of 3.8% to 5.6% YoY in dollar terms over FY27 to FY28. Reflecting the softer outlook, the brokerage has also cut its EPS estimates for FY27 and FY28 by around 5% to 7%, factoring in the lower growth trajectory.
JPMorgan has maintained a ‘Neutral’ rating on HCLTech and lowered its target price to Rs 1,370 from Rs 1,419. The brokerage noted that the company’s Q4 performance missed expectations on revenue, margins and earnings. Overall revenue came in 2% below estimates, with services revenue trailing by 130 basis points versus its projections.
Management attributed this to reduced discretionary spending by two large US telecom clients and the cancellation of two SAP projects.
HSBC has retained a ‘Hold’ rating and cut its target price to Rs 1,480 from Rs 1,560. The brokerage said the company’s Q4FY26 performance was a sharp miss, which has also led to weaker-than-expected growth guidance for FY27. The miss was primarily due to unexpected budget cuts at key US telecom clients and the cancellation of a few SAP projects. HSBC added that earnings growth and stock returns are unlikely to compound at double-digit rates in the near term.
Motilal Oswal Financial Services has maintained a ‘Buy’ rating, but reduced its target price to Rs 1,650, implying an upside of about 15%. The brokerage noted that the company’s softer FY27 guidance is largely driven by client-specific challenges and weakness seen in March. This includes disruptions at select clients and a sharp pullback in discretionary spending in the telecom segment by two large US-based clients.
Geographically, Europe continues to remain weak due to geopolitical uncertainties, while North America is relatively stable apart from these client-specific issues. Motilal Oswal also highlighted that weakness in the software business was partly due to delays in deal closures, influenced by factors such as the US government shutdown and the ongoing crisis in West Asia.
HDFC Securities has also maintained a ‘Buy’ rating on the stock, while revising its target price downward to Rs 1,465. The brokerage noted that services revenue declined 0.1% QoQ in constant currency terms, with weakness visible across services, ER&D, and software segments. This softness was largely attributed to a slowdown in the telecom vertical and a ramp-down in SAP-related work.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
