HCL Tech Shares Surge Over 4% Post-Q2 Results as Analysts from CLSA, JPMorgan, and Others Weigh In.

Shares of HCL Technologies saw a significant rally of over 4%, reaching a peak of Rs 1,275 following robust quarterly results. The IT services firm reported a 21% year-on-year increase in consolidated net profit of Rs 5,132 crore for the second quarter of FY27, with revenue from operations climbing 12% YoY to Rs 35,620 crore. Sequentially, revenues grew by 3%, while net profit rose 11%. The strong performance was attributed to growth in services, substantial bookings, and increasing engagement in advanced AI-driven initiatives, culminating in new deal wins totaling $3.26 billion.

Brokerage firms have adjusted their outlooks based on these results. Nomura has raised its target price to Rs 1,330, suggesting a 9% upside, and cites positive factors such as improved revenue growth and margin projections driven by AI. However, CLSA has retained a Hold rating despite an EPS upward revision, expressing caution over potential growth slowdowns in the second half of FY27 due to macroeconomic challenges. Conversely, JPMorgan’s underweight rating highlights concerns over expected EBIT margin pressures stemming from wage hikes and a reduction in growth outlook at the midpoint of guidance.

Citi and Nuvama hold more conservative positions, with Citi maintaining a Sell rating and raising its target price slightly amidst views of slower service revenue growth. Nuvama also maintains a Hold rating, emphasizing that HCL Tech trades at a significant premium to peers, driven by a narrowing growth differential and ongoing margin pressures, which raises concerns about the stock’s valuation sustainability. Nonetheless, the sentiment surrounding AI services appears largely optimistic, as they are anticipated to yield higher margins than traditional revenues.

Source: The Economic Times

(Expert Note: This intelligence brief was structured and verified by the Wealthova editorial desk.)