Tue Jan 14 08:19:06 UTC 2025: ## HCLTech Shares Plunge Despite Strong Q3 Results, Mixed Analyst Outlook

**Mumbai, India** – Shares of HCL Technologies Ltd. (HCLTech) experienced a significant drop of nearly 10% on Tuesday, despite the IT services company reporting strong third-quarter (Q3FY25) financial results that met market expectations. The stock closed at Rs 1,806.20 on the Bombay Stock Exchange (BSE), after hitting an intraday low of Rs 1,798.40.

HCLTech announced a net profit of Rs 4,591 crore, a 5.5% year-on-year increase, and a 5.07% YoY rise in revenue to Rs 29,890 crore. Earnings before interest and tax (EBIT) also showed improvement, rising 8.6% YoY to Rs 5,821 crore, with margins expanding by 90 basis points to 19.5%. The company secured impressive deal bookings worth $2.1 billion.

However, the company’s relatively muted guidance for near-term growth, coupled with concerns about a slower-than-expected large deal pipeline, spooked investors. While HCLTech raised its full-year constant currency revenue growth guidance to 4.5-5%, it maintained its EBIT margin guidance at 18-19%.

Analyst opinions remain divided. Kotak Institutional Equities issued a ‘reduce’ rating, citing tepid large deal wins and predicting slower growth compared to competitors. Conversely, Nirmal Bang Institutional Equities maintained a ‘buy’ rating, highlighting the company’s strong deal pipeline in areas like generative AI and ERP automation. Nomura and Morgan Stanley offered a ‘buy’ and ‘equal-weight’ rating respectively, with varying target prices.

The market reaction suggests investor apprehension regarding HCLTech’s short-term prospects, despite the company’s solid financial performance. While some analysts emphasize the company’s strong fundamentals and long-term potential, others express concerns about valuation and the pace of future growth.

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