HCLTech's revenue growth of 2.3% QoQ in constant currency missed expectations owing to sharp decline in HCLSoftware. Ebit margin and net profit, however, came in ahead of expectations. Bookings growth remained strong at 27% YoY, while Advanced AI revenue rose 78% YoY in CC. Employee additions and growth in the number of clients with revenue above $20 million were also encouraging. HCL Tech raised the lower end of its FY27E revenue growth guidance, partly reflecting inorganic contributions. Excluding these contributions, the revised range implies a modest reduction in the midpoint of organic growth guidance.
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Systematix Report
The brokerage firm Systematix retains its target PE multiple of 15 times on strong deal execution, AI capability investments, and wallet-share defense. Hence, it maintains Hold rating on the stock with a revised target price of Rs 1,235, rolled forward to 15 times Dec-28E earnings per share.
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The brokerage raises its FY27E–29E EPS estimates by 0.8%–1.7%, factoring in merger and acquisition revenue contributions, strong deal bookings, higher margin assumptions, and a revised USD/INR trajectory.
At current market price, the stock trades at 17x/16x/15x FY27E/FY28E/FY29E EPS, a 20% 1-year forward premium to TCS, which is justified by its sustained growth outperformance relative to large peers over the last three years.
HCLTech's revenue growth of 2.3% QoQ in constant currency missed expectations owing to sharp decline in HCLSoftware. Ebit margin and net profit, however, came in ahead of expectations.
Bookings growth remained strong at 27% YoY, while Advanced AI revenue rose 78% YoY in CC. Employee additions and growth in the number of clients with revenue above $20 million were also encouraging.
HCL Tech raised the lower end of its FY27E revenue growth guidance, partly reflecting inorganic contributions. Excluding these contributions, the revised range implies a modest reduction in the midpoint of organic growth guidance.
Systematix continues to expect HCLTech to deliver above-industry growth in FY27E and FY28E, underpinned by strong bookings, improving traction in large accounts, continued investment and its longterm AI ambitions. These include building full-stack AI services and taking a minority stake in Sarvam AI.
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