HCLTech Sees Sharpest Drop in Nearly 17 Months on Disappointing FY25 Outlook

HCLTech (HCLT.NS) witnessed a steep decline of up to 6.3% on Monday, marking its most significant fall in nearly 17 months, following a fiscal 2025 revenue growth projection that fell short of expectations for India’s third-largest software services company. By midday, the stock had recouped some losses but still traded 5.62% lower at 1,392.05 rupees, emerging as the top loser on the Nifty IT index (.NIFTYIT), which itself experienced a 0.2% dip. Year-to-date, HCLTech has declined by 5.2%, contrasting with the 6% drop in the IT index. The company, headquartered in Noida, anticipated revenue growth of 3-5% for fiscal 2025, a forecast that CEO C Vijayakumar attributed to ongoing macroeconomic uncertainties impacting demand. Brokerages expressed concerns over the outlook, with Jefferies labeling it a “significant negative surprise,” while Nirmal Bang noted it was below Street expectations, particularly in comparison to the 5% growth in FY24. HCLTech management cited factors such as increased offshoring and the impact of its deal with financial services firm State Street as primary reasons for the subdued guidance. Although market leader Tata Consultancy Services (TCS.NS) also fell short of revenue estimates, it remained optimistic about growth prospects for the fiscal year, citing a robust deal pipeline. Following the results, at least 18 analysts revised their target price for HCLTech downward, with the median target dropping to 1,532.50 rupees from 1,635.50 rupees in March, according to LSEG data.