Shares of Noida-based IT major HCL Technologies Ltd plunged by nearly 10% during trading on Wednesday, April 22, 2026. The sharp decline was triggered by the company's Q4 FY26 results, which fell short of Street expectations, and a weaker-than-anticipated FY27 guidance. The stock hit a low of Rs 1,301.60 on the BSE, reducing its market capitalization to Rs 3,55,530 crore.
Key Reasons for HCL Tech's Stock Decline
Several factors contributed to the significant drop in HCL Tech's share price:
- Revenue Miss: The company's Q4 FY26 revenue came in at $3,682 million, a 3.3% quarter-on-quarter (QoQ) decline, missing the consensus expectation of a 1.6% QoQ fall.
- Deal Wins Drop: Net new deal wins for the quarter were reported at $1.9 billion, representing a substantial 35% year-on-year (YoY) decrease.
- EBIT Margin Below Estimates: The Ebit margin stood at 16.5%, falling below the consensus estimate of 17.6%.
- Disappointing FY27 Guidance: The guidance provided for the fiscal year 2027 did not meet analyst expectations, signaling potential headwinds for future growth.
Following this downturn, HCL Technologies, India's third-largest IT services firm by market cap, saw its valuation slip below that of ITC Ltd, NTPC Ltd, Kotak Mahindra Bank Ltd, Adani Ports and Special Economic Zone Ltd (Adani Ports), and Oil and Natural Gas Corporation Ltd (ONGC).
Analyst Reactions and Revised Target Prices
The disappointing results and outlook prompted several brokerage firms to revise their ratings and target prices for HCL Tech shares:
- Nomura reduced its FY27-28 earnings estimates for HCL Tech by 5-7% and cut its target price to Rs 1,600 from Rs 1,700, citing lower growth expectations.
- JM Financial downgraded the stock to 'Reduce' and revised its target price to Rs 1,350 from Rs 1,440, noting that its assigned valuations were at a 14% premium over Infosys.
- Choice International maintained an 'ADD' rating but lowered its target price to Rs 1,500 from Rs 1,600.
- Nuvama tweaked its FY27 and FY28 earnings estimates, downgrading its target multiple and rating to 'HOLD' with a target of Rs 1,400 from Rs 1,550, expecting a convergence of HCL Tech's growth differential with TCS and Infosys.
HCL Tech also provided insights into the impact of Artificial Intelligence (AI) on the industry, expecting 40% of industry revenue to experience 3-5% deflation due to AI productivity. Conversely, 55% of revenues are anticipated to benefit from AI-led tailwinds, such as increased spending on data, cybersecurity, and cloud services, leading to over 10% growth.