
HCL Technologies reported its Q3 FY25 results, reflecting steady financial performance but mixed signals in its guidance, leading to 9% decline in its share price. The IT major revised its FY25 revenue guidance to 4.5%-5% YoY in constant currency (CC), leaving investors uncertain about its near-term growth trajectory.
As of 9:35 am the shares were trading 9.28% lower at ₹1,804.80 on NSE.
Key Financial Highlights
- Revenue: ₹29,890 crore, up 3.6% QoQ and 5.1% YoY.
- Net Profit: ₹4,591 crore, an 8.4% QoQ rise and YoY increase from ₹4,351 crore.
- EBIT Margin: Improved to 19.5%, up 93 bps QoQ.
- Cash Balance: Reached a record ₹27,707 crore.
Brokerage Insights
Post-Q3 earnings, major brokerages offered varied views on HCLTech stock:
- Jefferies: Hold; Target Price ₹2,060/share. Highlighted consistent margins but flagged near-term growth concerns.
- Nomura: Buy; Target Price ₹2,000/share. Cited robust deal pipelines supporting revenue stability in FY25.
- Citi: Neutral; Target Price ₹1,920/share. Expressed cautious optimism about long-term strategies but flagged potential headwinds.
- CLSA: Hold; Target Price ₹1,882/share. Praised operating stability but raised concerns over subdued guidance.
- Bernstein: Market Perform; Target Price ₹2,000/share. Acknowledged strong margin management but remained wary of broader IT sector challenges.
- Morgan Stanley: Equal Weight; Target Price ₹1,970/share. Noted soft growth expectations.
- Nuvama: Hold; Target Price ₹2,150/share. Upgraded TP but flagged valuation concerns after recent rallies.
Investor Outlook
At its current market price of ₹1,975/share, HCLTech is trading near or above most brokerage target prices, signaling limited upside potential. Analysts are cautiously optimistic about the company’s FY25 guidance and AI-led strategic initiatives but remain concerned about sectoral challenges and valuation constraints.
Leadership Commentary
- Roshni Nadar Malhotra, Chairperson:
“HCLTech is well-positioned as AI-led transformation brings new growth opportunities. Governance and sustainability remain central to our performance.” - C Vijayakumar, CEO & Managing Director:
“We delivered another solid quarter with 3.8% QoQ growth in constant currency and EBIT at 19.5%. Broad-based performance and new deal bookings of $2.1 billion position us for a transformative future.” - Shiv Walia, CFO:
“Our focused growth strategy reflects in our highest-ever EBIT of ₹5,821 crore and a strong LTM ROIC of 36.6%. Our cash conversion continues to outperform the 5-year average.”
Market Reaction
HCLTech’s Q3 FY25 results underline its operational resilience. However, the revised guidance and cautious broker reviews have led to subdued investor sentiment, resulting in a 3% dip in share price as of January 14.