HCL Technologies Shares Plunge Over 10% Following Disappointing Earnings and Brokerage Downgrades

HCL Technologies share price came under heavy selling pressure, plunging over 10% to Rs 1,289 on the NSE on Wednesday. The sharp fall followed a series of brokerage downgrades and cuts in target prices after the company’s quarterly earnings report disappointed on multiple fronts, including revenue, margins and forward guidance.

Alongside its Q4 earnings announcement, the company projected FY27 revenue growth of 1–4% year-on-year in constant currency terms. This came after it fell short of its own FY26 growth guidance of 4.0–4.5%, reporting just 3.9%. Additionally, its outlook for services growth at 1.5–4.5% was weaker than the 4.8% constant currency growth achieved in the services segment during FY26. The fall in HCL Technologies’ stock price wiped out around Rs 38,000 crore in market value and brought its total market capitalisation down to about Rs 3,53,000 crore.

For the March quarter, revenue stood at $3.7 billion, marking a 3.3% sequential decline in constant currency terms and coming in below market expectations. The management attributed the softness to a mix of factors, including sharp cuts in discretionary IT spending by two major US telecom clients, cancellation of two SAP-related projects, and client-specific challenges in the retail and manufacturing segments, which are expected to weigh on services growth in FY27 by about 50 basis points. It also pointed to a weaker outlook in Europe due to geopolitical uncertainties, along with a 200–300 basis point deflationary impact from artificial intelligence on traditional IT services.

Among brokerages, Jefferies took the most aggressive stance, downgrading HCL Technologies to “Underperform” and slashing its target price to Rs 1,165. The firm said it expects the company’s organic revenue growth in FY27 to come in at 2.4%, which would be the weakest since FY23. It also reduced the valuation multiple from 18 times to 16 times earnings.

Citi retained a “Neutral” view but reduced its target price to Rs 1,385, describing the fourth quarter as weak across revenue, deal wins and outlook. JPMorgan maintained its “Neutral” rating but lowered its target price to Rs 1,370 from Rs 1,419. HSBC kept its “Hold” rating but cut its target price to Rs 1,480 from Rs 1,560. Nomura reduced its target price to Rs 1,600 from Rs 1,700. CLSA maintained an outperform stance with a target price of Rs 1,519, despite calling the performance disappointing. Motilal Oswal remained the most optimistic, reiterating a Buy rating with a target price of Rs 1,650.