HCLTechnologies shares fell more than 4% on Tuesday despite the company reporting record first-quarter deal bookings and healthy operational performance, with investors focusing instead on management’s decision to retain its FY27 growth guidance. Analysts said the unchanged outlook reinforced concerns that enterprise technology spending remains subdued and that a broad-based recovery is still some time away, even as the company continues to execute well.
The IT services major reported net new deal wins of $2.41 billion in the April-June quarter, the highest ever for a first quarter, while also announcing a Rs 3,500 crore investment to build AI data centres.
Yet the company retained its FY27 constant currency revenue growth guidance at 1-4% and services growth guidance at 1.5-4.5%, indicating that macroeconomic uncertainty and weak discretionary spending continue to cloud demand visibility. HCLTech shares fell as much as 4.67% during intra-day trade before ending 4.42% lower at Rs 1,167 on the BSE.
Global brokerages said the guidance, rather than the quarterly numbers, drove the market reaction. Morgan Stanley said strong deal execution was unlikely to translate into earnings upgrades as long as demand visibility remained uncertain.
Goldman Sachs also maintained a neutral stance, saying the unchanged guidance suggested management was not yet seeing enough improvement in client spending to raise its outlook.
Domestic brokerages, however, maintained that the sell-off overlooked the company’s improving strategic positioning. Motilal Oswal reiterated its buy rating, saying HCLTech’s AI data centre investment, along with its earlier $150 million investment in Sarvam AI, showed the company was building a full-stack AI business beyond traditional IT services.
The brokerage said HCLTech’s five-pronged AI strategy spanning services transformation, proprietary IP, AI-led offerings, partnerships and talent development leaves it well placed to benefit as AI adoption gathers pace.
It expects the company to report 9.3% year-on-year revenue growth and 20% growth in net profit in the September quarter and retained HCLTech as its preferred large-cap IT stock, expecting stronger revenue momentum in FY28 as recent deal wins begin translating into execution.
Equirus Securities upgraded the stock to add from reduce, citing healthy execution on bookings, margins and contract wins. It said banking and financial services remained the key growth driver, while healthcare, life sciences and telecom continued to face client-specific challenges.
The brokerage also said HCLTech’s AI data centre investment was unlikely to materially alter its capital allocation or return ratios, although the funding structure and pace of capacity commitments would remain key monitorables.