HCL Tech Shares Fall Over 10% as Q4 Miss and Weak FY27 Guidance Rattle Markets

Mumbai | 22 April 2026 

HCL Technologies dropped to Rs 1,292 on the NSE by midday on Wednesday, down 10.3% and the top loser on the Nifty 50. The sell-off followed a Q4FY26 result that missed analyst estimates across revenue, operating profit, and deal wins, while FY27 guidance came in well below Street expectations. 

What Went Wrong in Q4FY26? 

HCL Tech reported IT services revenue of $3.68 billion for Q4FY26, declining 3.3% quarter-on-quarter in constant currency. This missed PL Capital’s estimate of a 2.0% decline and consensus expectations of a 1.6% decline. 

The primary drag was a sharp pullback in discretionary spending by two large US telecom clients and the discontinuation of two SAP modernisation programmes. The impact is expected to weigh on FY27 revenue by approximately 50 basis points. 

Software revenue fell 28.1% quarter-on-quarter in constant currency and 14.1% year-on-year. Services revenue was broadly flat, with IT services down 0.1% and Engineering and R&D services down 1.3% quarter-on-quarter in constant currency. 

How Did Margins and Deal Wins Hold Up? 

Adjusted EBIT margin came in at 17.8%, down 160 basis points quarter-on-quarter, impacted by software seasonality, wage hikes, and restructuring expenses, partially offset by Project Ascend benefits and rupee depreciation. 

Deal wins were soft. Q4 total contract value stood at $1.94 billion, down 35.6% quarter-on-quarter. Full-year FY26 deal wins came in at $9.32 billion, marginally ahead of $9.26 billion in FY25. Advanced AI revenue for the quarter reached $155 million, up 6.1% quarter-on-quarter, with annualised AI revenue for FY26 at $620 million. The board declared an interim dividend of Rs 24 per share. 

Why Does FY27 Guidance Disappoint? 

HCL Tech guided for FY27 consolidated revenue growth of 1–4% in constant currency, with services growth of 1.5–4.5%, both below the prior-year starting guidance of 2–5%. EBIT margin is guided at 17.5–18.5%. 

Management cited continued weakness in discretionary spending, telecom-led cuts, and delays in regulatory approvals for pending acquisitions in the US. The upper end of guidance assumes a gradual recovery in demand, with no contribution from acquisitions. 

What Does PL Capital Research Say? 

PL Capital Research has published a Q4FY26 result update on HCL Technologies. The note cuts FY27 and FY28 constant currency revenue growth estimates to 2.6% and 3.8% respectively, from earlier projections of 6.5% and 7.1%. EBIT margin estimates have been revised to 17.7% for FY27 and 18.0% for FY28. The target PE multiple has been reduced to 17x from 20x on FY28 earnings, with a revised target price of Rs 1,300, down from Rs 1,710. 

[Read the full PL Capital Research report on HCL Technologies → HCLT-22-4-26-PL.pdf  

Stay updated on Indian equity and commodity markets. Read more market news on PL Capital →