CLSA has upgraded HCL Technologies to ‘outperform’ from ‘hold’ and set a revised target price of ₹1,811 (down from ₹1,882), which implies a 16% upside from the current market levels. The brokerage’s bullish stance comes on the back of HCLTech’s consistent performance and strong growth visibility despite the near-term challenges in the IT sector.
According to CLSA, HCLTech has emerged as one of the fastest-growing Indian IT companies in FY24–25, and the trend is expected to continue into FY26. The brokerage forecasts HCLTech to post the highest constant currency (CC) revenue growth among large-cap peers in FY26, reinforcing its confidence in the company’s execution capabilities and deal momentum.
While the company’s profitability still lags behind market leader TCS, CLSA highlighted that HCLTech has closed the valuation gap with TCS, aided by higher free cash flow (FCF) yield and improved shareholder returns through increased payout ratios. These factors have made the stock more attractive on a risk-reward basis, according to the report.
In terms of valuation, CLSA now assigns a 23.9x PE multiple to HCLTech, compared to 25.2x earlier. This implies a 10% discount to TCS, which is in line with the company’s relative margin profile and business mix. The brokerage added that while there are ongoing concerns over macro headwinds in global tech spending, HCLTech’s robust deal pipeline and focus on digital and cloud services place it in a strong position to weather the storm.
HCLTech is one of India’s leading IT services firms, offering services in application development, infrastructure management, engineering and R&D, and digital transformation. With a growing client base across the US and Europe, the company has been steadily gaining market share and focusing on high-growth areas such as cloud, AI, and cybersecurity.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Please consult your financial advisor before making investment decisions.
