Posted on April 23, 2025, by Niftynews
📈 HCL Tech Q4 Results: Shares Rally on Steady Performance
HCL Tech shares rallied over 7% to ₹1,587 in morning trades on April 23, after the company posted January–March quarter (Q4 FY25) results that were largely in line with market expectations. Despite the cautious guidance and subdued deal wins, the stock saw strong buying momentum, supported by optimism around FY26 growth projections.
💼 Financial Snapshot: Revenue and Profit Grow Steadily
In Q4 FY25, HCL Technologies reported:
- Revenue: ₹30,246 crore, up 6% YoY
- Net Profit: ₹4,307 crore, up 8% YoY
- EBIT Margin: 18.3% (within guidance of 18–19%)
For the full FY25, HCL Tech registered a 6.5% rise in revenue and a 10.8% increase in net profit. While these numbers don’t scream breakout growth, they reflect stability amid global economic uncertainty and tech sector volatility.
🔍 FY26 Outlook: Conservative but Slightly Ahead of Expectations
HCL Tech revised its revenue growth guidance for FY26 to 2–5% in constant currency (cc). Though the lower end of the guidance is 250 basis points below FY25 levels, analysts noted it was slightly above street estimates.
This guidance reflects a realistic approach in a challenging macro environment, especially as clients remain cautious about IT spending.
🗣️ What Are Brokerages Saying?
Despite the stock jump, brokerage houses remained largely neutral, balancing optimism with caution.
✅ Citi: “Neutral” | Target Price: ₹1,510
Citi highlighted that HCL delivered a reasonable performance in a seasonally weak quarter, particularly compared to its peers. However, it noted a flat CAGR outlook for FY26 and cut EPS estimates for FY26 and FY27 by 2%.
“The management highlighted an environment filled with uncertainty and stated that it would continue to explore new opportunities,” Citi said in its report.
✅ Morgan Stanley: “Equal-weight” | Target Price: ₹1,600
Morgan Stanley maintained a neutral stance, citing limited upside in growth versus valuation. Analysts also pointed to soft deal wins (TCVs) in Q4 as a factor tempering long-term growth confidence.
🟢 Nuvama: “Buy” | Target Price: ₹1,700
On the bullish side, Nuvama remained optimistic, noting that HCL’s FY26 guidance beat expectations, which supports their positive stance on the stock’s long-term growth story.
📊 Deal Wins and TCV Performance: A Mixed Bag
A point of concern was the soft performance in new deal Total Contract Values (TCVs) during Q4. Management acknowledged this in the investor call, stating that while pipeline visibility remains solid, some deal closures were delayed due to client budget reviews and a cautious IT spending environment.
This softness in TCVs led many analysts to recalibrate their growth expectations, although they believe the deals could materialize in later quarters.
💬 Management Commentary: Realism with Resilience
HCL’s leadership emphasized a “realistic” approach for FY26, acknowledging a “challenging and uncertain environment” but expressing confidence in navigating it through operational agility, digital transformation, and client diversification.
They also reiterated their commitment to investing in AI, cloud, and engineering services, which are expected to drive long-term margin and revenue growth.
📈 HCL Tech Shares: What’s Next?
Following the 7% rally, HCL Tech shares are trading near 52-week highs, indicating strong investor sentiment. However, with muted EPS growth expectations and a conservative FY26 outlook, some analysts recommend cautious optimism going forward.
That said, with an 18.3% EBIT margin, solid fundamentals, and a diversified portfolio across verticals, HCL remains one of the more resilient plays in India’s IT services sector.
🔚 Final Thoughts: Stability Over Speculation
The Q4 FY25 performance of HCL Technologies shows that even in a cautious IT spending climate, stable execution matters. The company may not be promising explosive growth, but its conservative guidance and consistent delivery are enough to maintain investor trust.
In a sector clouded by uncertainty, HCL Tech shares present a balanced investment opportunity — one that rewards long-term stability over short-term speculation.
