HCLTech Shares Plunge After Weak Outlook and Earnings Miss
Shares of HCLTech dropped sharply by over 9% on Wednesday after the company projected fiscal 2027 revenue growth below analyst expectations and reported a miss in its fourth-quarter earnings. The stock was on track for its worst session in more than a decade, emerging as the biggest drag on the Nifty IT Index, which also declined significantly. The disappointing performance reflects continued caution among clients in India’s $315 billion IT sector, where discretionary spending remains under pressure.
Analysts, including those from Goldman Sachs, indicated that the slowdown is not company-specific but signals broader industry challenges, driven by delayed project ramp-ups and macroeconomic uncertainties. Over the past year, Indian IT firms have grappled with headwinds ranging from U.S. policy changes to geopolitical tensions, prompting clients to prioritise cost optimisation. CEO C. Vijayakumar noted that the business environment remains highly fluid, with project scale-downs in the Americas region expected to slightly impact annual growth.
Despite strong momentum in advanced AI services, which saw revenue surge to $620 million annually, concerns over valuation persist. Brokerages, including Jefferies, have downgraded the stock, citing limited upside after it traded at a premium to peers such as Infosys and Tata Consultancy Services. While rivals show mixed performance—with Wipro also missing estimates—the sector outlook remains uncertain as demand recovery continues to face delays.
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