HCL Tech shares gain 3% on delivering 'standout quarter'; should you buy?

HCL Tech raised the lower end of its guidance and now expects to grow between 4 per cent and 5 per cent on a CC basis for the full year

Shares of HCL Technologies rose nearly 3 per cent on Tuesday after its second-quarter earnings beat street expectations and the company raised the lower end of its guidance.

 

The information technology (IT) major's stock rose as much as 2.7 per cent during the day to ₹1,535 per share, the highest level since July 24 this year. The stock pared gains to trade 1.5 per cent higher at ₹1,516 apiece, compared to a 0.04 per cent advance in Nifty 50 as of 9:45 AM. 

 

Shares of the company are up over 10 per cent from its October lows of ₹1,380 apiece. The counter has fallen 21 per cent this year, compared to a 6.7 per cent advance in the benchmark Nifty 50. HCL Tech has a total market capitalisation of ₹4.11 trillion. 

 

HCL Tech Q2 results and guidance 

The company reported flat net income of ₹4,235 crore in the second quarter of 2025-26 (Q2FY26) compared to last year, even as its revenue was up 10.7 per cent to ₹31,492 crore, driven by financial services and technology business verticals. Margins improved 110 basis points (bps) sequentially to 17.4 per cent.

 

Financial services were up 11 per cent on a constant currency basis, and technology 13.9 per cent. Manufacturing and life sciences continued to remain weak, and were down 1.8 per cent and 3 per cent, respectively.

 

The third-largest IT services exporter also raised the lower end of its guidance and now expects to grow between 4 per cent and 5 per cent on a constant currency basis for the full year, up from 3-5 per cent it projected in July.

 

The company’s total contract value for Q2FY26 was about $2.6 billion across service lines, verticals, and geographies without any mega deals.

Analysts on HCL Tech Q2 results 

Motilal Oswal said that this was a "standout quarter" for HCL Technologies as it delivered strong results with an all-around beat on revenue and deal total contract value (TCV), prompting a guidance upgrade. The company continues to be the fastest-growing large-cap in its segment, it added. 

 

Operating margins beat expectations at 17.4 per cent in the second quarter. However, Motilal Oswal expects short-term pressure on margins in FY2026 due to wage hikes, furloughs, and elevated restructuring charges, likely keeping them near the lower end of guidance. The brokerage reiterated a 'Buy' rating with a target price of ₹1,800 per share.

 

JM Financial noted that HCL Technologies’ second-quarter performance met most expectations. The company’s confidence in raising its quarterly net new TCV run-rate to over $2.5 billion from $2 billion should help offset deflationary pressures. JM Financial, however, seeks more consistent TCV growth to support acceleration.

 

Modest service ask rates, a lag between TCV pick-up and revenue conversion, and unchanged consolidated revenue guidance of 3-5 per cent limit revisions to FY2026–28 revenue estimates. 

 

Analysts at Emkay Research noted that, given the strong Q2 performance, robust deal bookings, and a healthy pipeline, the company narrowed its services revenue growth guidance to 4-5 per cent for FY26, while retaining overall revenue growth guidance of 3-5 per cent due to softness in Software. The brokerage retains an 'Add' rating with a target price of ₹1,550 per share.