HCLTech Tanks 9% Despite Profit Jump in Q4 Results; What Spooked Investors?

Shares of HCL Technologies fell sharply in early trade on Wednesday after the company reported weaker-than-expected March quarter results and issued subdued growth guidance for FY27.

The stock was trading at ₹1,302.1, down 9.6% in the morning session, emerging as the top loser on the Nifty 50. The stock has declined about 11% over the past one year, compared with a 1.1% gain in the benchmark.

HCLTech reported a net profit of ₹4,488 crore for Q4 FY26, up 4.2% year-on-year and 10.1% sequentially. Revenue rose 12.34% YoY to ₹33,981 crore, while sequential growth remained muted at 0.32%. The company also announced an interim dividend of ₹24 per share.

Managing Director and CEO C Vijayakumar termed the year as one with an uncertain demand environment. "During the quarter, our performance came below our expectations due to softness in certain parts of our business, due to lower discretionary spend and delayed decision making."

Guidance Cut, Demand Concerns Persist

The company has guided for FY27 revenue growth of 1–4% in constant currency terms, lower than its FY26 growth range of 4–4.5%. EBIT margin is expected to remain in the range of 17.5–18.5%.

The muted outlook reflects continued demand challenges, particularly in telecom and enterprise spending, which have impacted deal pipelines and execution.

Despite near-term headwinds, the company highlighted traction in its AI-led offerings, with annualised Advanced AI revenues crossing $620 million in Q4. It said the focus remains on positioning the business to capture long-term opportunities from AI.

HCLTech also reported a net addition of 802 employees during the quarter, taking its total workforce to 2,27,181, even as fresher hiring remained cautious amid slowing demand.

Brokerages Turn Cautious

Brokerages turned cautious following the earnings miss and weak outlook.

HSBC retained a 'Hold' rating but cut its target price to ₹1,480 from ₹1,560, citing a sharp Q4 miss and weaker FY27 outlook. It flagged budget cuts at key US telecom clients and SAP project cancellations as key concerns.

JPMorgan maintained a 'Neutral' rating and lowered its target price to ₹1,370 from ₹1,419, highlighting misses across revenue, margins and earnings. It also warned that weakness in telecom and SAP demand could persist into FY27.

The combination of weaker earnings, subdued guidance and negative brokerage commentary weighed on investor sentiment, leading to a sharp fall in the stock.