Firstly, the company’s fourth quarter performance was weak. It reported a constant currency revenue decline of 3.3%, compared to a drop of close to 1%. Margins at 16.5% were also below expectations of 17.6%.
As a result, the company missed its financial year 2026 revenue growth guidance. What was projected to be a growth between 4% to 4.5%, turned out to be 3.9% for the year. Incidentally, during their December quarter results, the company had raised its revenue growth guidance for the year to this figure from 3% to 5% earlier.
Secondly, their guidance for the new financial year also missed expectations. The company expects constant currency revenue growth to be between 1% to 4%, while analyst projections had pegged the figure to be between 3% to 6%.
HCLTech’s profit decline for the full year was the first in 16 years. You can read more on that here.
The only positives, if any, were the fact that the financial year 2027 margin guidance was raised to 17.5% to 18.5% from 17% to 18% earlier, and that revenue from the Advanced AI segment rose by 6.1% on a sequential basis in constant currency terms to $155 million.
HCLTech’s management in its post-earnings call mentioned that there has been a reduction in discretionary spending in the telecom vertical and that two SAP projects got discontinued towards the end of the fourth quarter.
The management went on to add that some clients also scaled back discretionary spending and this impact could be felt in the first quarter of the new financial year as well. With business environment remaining fluid, the management said that it is difficult to form a view for the next 12 months.
Shares of HCLTech had ended Tuesday’s session 0.7% higher ahead of the results announcement at ₹1,439. The stock is up 6% over the last one month, but down 12% for the year so far. From its 52-week high level of ₹1,780, the stock is down 19%.
