Shares of HCL Tech plunged nearly 11 per cent on Wednesday, as investors reacted sharply to weaker-than-expected FY27 guidance and a wave of analyst downgrades following its Q4 results.

The stock closed at ₹1,285.30, hitting an intraday low of ₹1,281 from the previous close of ₹1,441.20.

The sharp decline came after the company projected modest revenue growth of 1 to 4 per cent in constant currency for FY27, with services growth seen at 1.5 to 4.5 per cent, lower than the 2 to 5 per cent growth outlook indicated last year. Management flagged continued global market volatility, discretionary spending cuts, and client-specific challenges as key headwinds.

For the March quarter, HCL Tech reported a consolidated net profit of ₹4,488 crore, up 4.2 per cent year-on-year from ₹4,307 crore. Revenue rose 12.3 per cent to ₹33,981 crore compared with ₹30,246 crore in the year-ago period.

However, operational performance remained under pressure. Growth across key segments disappointed, with services declining 0.1 per cent quarter-on-quarter in constant currency, ER&D down 1.3 per cent, and software revenues dropping sharply due to seasonal weakness and delayed deal closures.

For the full year, net profit fell 4.30 per cent to ₹16,642 crore, impacted by a one-off ₹956 crore charge linked to new labour codes.

Subdued guidance weighs on outlook

The company’s FY27 guidance reflects continued stress from reduced discretionary spending, especially in the telecom vertical, along with ramp-downs in certain large client accounts. It also highlighted a 2 to 3 per cent deflationary impact from AI-led efficiencies and a roughly 50 basis point growth headwind from client-specific issues.

Annual contract value of new deal wins remained soft at $9.3 billion, underscoring cautious enterprise spending amid macroeconomic uncertainty.

Brokerages turn cautious

Brokerages broadly turned cautious on the stock following the results and outlook. HDFC Securities retained a buy rating but reduced its target price to ₹1,465, while trimming earnings estimates to reflect slower growth and continued macro uncertainty.

JM Financial downgraded the stock to reduce and cut its target price to ₹1,350 from ₹1,440, citing weak services momentum, client-specific ramp-downs and limited near-term visibility.

InCred also downgraded the stock to reduce, sharply lowering its target price to ₹1,275 from ₹1,616 due to cautious management commentary, structural headwinds and soft deal bookings.

Nuvama revised its rating to hold from buy and reduced its target price to ₹1,400 from ₹1,550, noting that the weaker outlook narrows HCL Tech’s growth premium over peers and could drive valuation convergence.

HSBC maintained a hold rating but lowered its target price to ₹1,480 from ₹1,560, flagging concerns around muted earnings growth and limited potential for strong return compounding.

JPMorgan kept a neutral stance while cutting its target price to ₹1,370 from ₹1,419, highlighting persistent telecom weakness, SAP-related disruptions and increased investments in GenAI that may weigh on margins.

Nomura maintained a buy rating but reduced its target price to ₹1,600 from ₹1,700, factoring in slower growth expectations despite an anticipated recovery in margins.

In addition, the Nifty IT index also witnessed significant selling pressure in today’s session, falling 5 per cent. Along with HCL Tech, Persistent Systems, Coforge, Tech Mahindra, Infosys and TCS were other major losers.

Published on April 22, 2026