HCL Technologies saw its share price slip a little over 1% after releasing its third‑quarter numbers.
Q3 Financial Highlights
- Net profit: ₹4,076 crore, down 11% year‑on‑year.
- Revenue: ₹33,872 crore, up 13% from the same quarter last year.
- Quarter‑on‑quarter change: Profit fell about 4%, while revenue grew 6%.
- Guidance for FY26: Revenue expected to grow 4%‑4.5% (constant currency); services revenue 4.75%‑5.25%; EBIT margin 17%‑18%.
- Dividend: Interim dividend of ₹12 per share, record date 16 Jan 2026, payable 27 Jan 2026.
What Analysts Are Saying
Senior analyst Seema Srivastava noted that the company showed solid operating performance. EBIT rose 13.2% quarter‑on‑quarter to ₹6,285 crore and margins improved to 18.6% despite a one‑time charge of ₹956 crore for new labour codes.
She highlighted strong cash flow—free cash flow was about 120% of net income—and a healthy return on invested capital (ROIC) of 39.4%.
Deal activity also looked good, with new contracts worth $3 billion, a 43.5% increase YoY. Employee attrition fell to 12.4% and hiring of fresh graduates continues.
Brokerage Views
Prabhudas Lilladher praised the revenue beat, especially from the HCLSoftware segment, and expects the services growth to keep rolling into FY27 and FY28, helped by AI‑related orders. They raised their constant‑currency revenue growth forecasts for the next two years by 20‑30 basis points.
The brokerage sees the margin possibly normalising in Q4 because of the new labour code impact. At current valuations (about 22× FY27 earnings and 19× FY28 earnings), they target a price of ₹1,910 per share.
Technical Outlook
The stock opened at ₹1,690 on the BSE, hit a high of ₹1,696 and a low of ₹1,626 during the session.
Research head Anshul Jain pointed out a 28‑week cup‑and‑handle pattern forming, with a six‑week bullish flag developing on the handle. He says volume suggests institutional buying, and a breakout could push the price toward the ₹1,825 level. A failure to stay above ₹1,695 may keep the stock range‑bound.
Bottom Line
HCL Tech’s profit dip was largely due to a one‑off labour‑code expense, while revenue growth stayed strong. The company’s dividend, margin guidance and robust deal pipeline are positive signs, but upcoming quarters may see some margin pressure.
Remember, this is my perspective, not a prediction. Do your own research and consider speaking with a qualified financial advisor before making any investment decisions.