HCLTech shares jumped after the company reported a 21.2% rise in net profit to 51.32 billion rupees. Strong deal wins reached $3.26 billion, helping the firm beat analyst expectations. Experts said the firm’s services revenue growth and margin performance were strong in the September quarter, supported by new AI-led efficiencies.
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HCLTech's net profit rose 21.2% to 51.32 billion rupees ($538.85 million), beating analysts' expectations of 48.59 billion rupees. The IT service provider's annualised advanced AI revenue rose to $219 million from $171 million in the previous quarter.
Analysts at brokerage Jefferies noted that HCLTech is among the few large IT firms to project revenue growth visibility of more than 5% in constant currency in fiscal year 2028, along with steady margin delivery.
The brokerage said the revised revenue growth guidance of 2.5% to 4% suggests a steady outlook for the services segment, and upgraded the stock to "hold" from "underperform".
Nomura analysts echoed the view, noting that HCLTech's services revenue growth and margin performance were strong in the September quarter. They added that the EBIT margin of 18.2% beat street expectations, helped by AI-led efficiencies, operating leverage and a richer mix of advanced AI services.
Brokerage Systematix said strong deal bookings, which grew to $3.26 billion from $2.57 billion a year earlier, growing traction in large accounts, along with continued investments and the company's long-term AI ambitions supported its view that HCLTech could outgrow the industry over the next couple years.
($1 = 95.2400 Indian rupees)
Updates with details and brokerage comments
Reporting by Mridula Kumar in Bengaluru; Editing by Mrigank Dhaniwala and Ronojoy Mazumdar