HCL Tech shares rally over 4% after Q2 results. What are CLSA, JPMorgan, others saying?

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HCL Tech shares

The company retained its FY27 EBIT margin guidance at 17.5-18.5%. It guided for constant-currency revenue growth of 2.5-4% for the company and 3-4% for services.

Revenue from operations in the reporting period increased 12% YoY to Rs 35,620 crore. Sequentially, revenue grew 3%, while net profit rose 11%. In constant currency terms, revenue increased 2.3% quarter-on-quarter and 2.6% year-on-year. The quarterly print was led by growth in services, strong bookings and rising traction in advanced AI-led work. New deal wins stood at $3.26 billion for the quarter.

HCL Tech share price: Buy, sell or hold HCL Tech shares?

Nomura has raised its target price on HCL Technologies to Rs 1,330 from Rs 1,310, implying 9% upside from current levels. The brokerage has marginally increased its revenue growth estimates, expecting USD revenue to grow 3-5.9% year-on-year in FY27-28, compared with 2.7-5.1% earlier.

Nomura has also raised its FY27 EBIT margin estimate by 50 basis points to 18%, while retaining its FY28 estimate at 18.3%. The brokerage cited AI-driven efficiencies, higher-margin advanced AI revenues and cost savings as margin tailwinds, partly offset by restructuring costs and the HPE Telco acquisition. HCL Tech said AI services revenues carry margins 7-10% higher than the company average. The brokerage expects margin normalisation over FY27-28, while noting that the ramp-up of a mega deal worth over $1 billion, won in early July, is likely to gain meaningful traction only in the first quarter of FY28.

CLSA has maintained its Hold rating on HCL Technologies with a target price of Rs 1,094. CLSA believes the company's AI strategy, spanning ecosystem partnerships, physical AI, agentic AI and AI factories, along with its focus on large deal wins, positions it to gain market share. The brokerage has raised its FY27 EPS estimate by 2% on the back of stronger margins but kept estimates for subsequent years largely unchanged. It forecasts FY27 constant-currency revenue growth of 3%, near the lower end of guidance, citing an uncertain and deteriorating macroeconomic environment.

JPMorgan has an‘Underweight rating on HCL Technologies with a target price of Rs 1,080. The brokerage said the revised revenue guidance midpoint indicates a slowdown in growth. It also flagged potential pressure on EBIT margins from 140 basis points of headwinds in the second half of the year due to wage hikes, with the company retaining its margin guidance at 17.5-18.5%. JPMorgan believes slower organic growth at the midpoint of the guidance range could raise questions about the premium valuation the stock commands.

Citi has maintained its ‘Sell’ rating on HCL Technologies while raising its target price to Rs 1,050 from Rs 1,030. The brokerage described the second-quarter performance as decent, with margins beating expectations, although the software business disappointed. It noted that the services revenue guidance points to slower growth in the second half, even as management remains confident of delivering growth slightly above the midpoint of the guidance range.

Nuvama has maintained its ‘Hold’ rating on HCL Technologies with a target price of Rs 1,250 per share. The brokerage noted that the stock trades at around 16 times FY28 earnings, a 20% premium to TCS and Infosys at 13 times.

While HCL Tech's services business remains stable, its software segment is weighing on overall growth. Nuvama believes the narrowing growth differential versus peers and persistent margin pressures limit further upside, making the stock's premium valuation difficult to justify and the risk-reward unfavourable.