Tue Jan 14 08:43:55 UTC 2025: ## HCLTech Stock Plunges 9% After Q3 Results, Downgraded by Nuvama

**Mumbai, India** – Shares of HCL Technologies (HCLTech) plummeted 9% on Tuesday, marking its largest single-day drop in almost a decade, following the release of its third-quarter (Q3) financial results. The significant decline comes after brokerage firm Nuvama downgraded the company’s rating from “buy” to “hold,” citing full valuations at 28.5 times the projected price-to-earnings ratio for fiscal year 2026.

Despite reporting strong Q3 performance, with total revenue reaching ₹29,819 crore (a 3.6% quarter-on-quarter and 5.1% year-on-year increase), Nuvama lowered its earnings estimates for FY25 and FY26 by 0.6% and 3% respectively, attributing the reduction to slightly lower-than-expected growth. The brokerage firm now has a price target of ₹2,150 for HCLTech shares.

HCLTech CEO C VijayKumar highlighted the company’s robust and diversified service lines across various geographies. He emphasized the strong performance across business segments, including a 2.2% sequential and 4.9% year-on-year growth in the services business (in constant currency). The company also secured $2.1 billion in total contract bookings during the quarter. While Q3 EBIT margin reached a strong 19.5%, this represented a slight year-on-year decline. Profit after tax (PAT) increased by 9% quarter-on-quarter and 6% year-on-year, reaching ₹4,591 crore. The company also declared an interim dividend of ₹12 per share and a special dividend of ₹6 per share.

Despite the positive Q3 numbers and FY25 guidance of 4.5-5% year-on-year revenue growth in constant currency, the market reacted negatively to the Nuvama downgrade and the perceived high valuation. The significant share price drop underscores investor concerns regarding future growth prospects.

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