HCLTech Shares Upgraded To 'Add' By Dolat Capital Post Inline Q2 Results — Check Target Price

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Dolat Capital Report

HCLTech Ltd. reported rev of $3,644 million, up 2.4% QoQ in constant currency (in-line) driven by modest recovery in select verticals. The IT/ER&D/Software biz. saw positive sequential movement of 2.6%/2.2%/0.5% QoQ. Management indicated no material change in overall demand environment.

The company raised its IT services growth guidance to 4–5% CC, while maintaining overall revenue growth guidance at 3–5% in CC (positive for Services, but implies decline in Software biz for FY26).

Operating profit margin improved by 110 bps to 17.5%; Ebit margin guidance retained at 17–18% (our estimate at 16.9%).

Revenue commentary shows no signs of concern but lacks any revenue thrust either, while OPM recovery is likely to be slow, given wage hike pressure in Q3.

Factoring this, we lower our FY26E/FY27E earnings by 3.7%/2.6% (FY28E introduced).

However, given recent sharp correction, we have now revised our rating to ‘Accumulate’ with an unchanged target price of Rs 1,700, valued at 23x of FY28E earnings.

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