HCL Technologies has announced a revision to its Q3 interim dividend record date, shifting it from January 16 to January 17, 2025, following confirmation from stock exchanges about a trading holiday. The IT services giant made this announcement through an exchange filing, citing the late Monday confirmation that January 15 would be a trading holiday due to BMC elections.

Dividend Details and Timeline

The company maintains its interim dividend payout of ₹12.00 per equity share for the third quarter. The revised timeline ensures proper processing despite the holiday disruption.

Q3 Financial Performance

HCL Technologies reported mixed results for the third quarter, with revenue growth offset by declining profitability. The company's consolidated net profit fell 3.8% quarter-on-quarter to ₹4,082.00 crore, missing analyst expectations significantly.

Market Performance and Analyst Coverage

Shares of HCL Technologies closed 0.34% higher at ₹1,155.90 on the NSE, outperforming the benchmark Nifty's 0.42% rise. Despite the recent gains, the stock has declined 16.18% over the past 12 months, reflecting broader market challenges in the IT sector.

Analyst sentiment remains cautiously optimistic with mixed recommendations across the coverage universe.

The average 12-month price target from analysts suggests limited upside potential of 2.0%, indicating measured expectations for the stock's near-term performance. The dividend revision demonstrates the company's commitment to maintaining shareholder returns despite operational challenges reflected in the quarterly results.

HCL Technologies reported its third-quarter earnings for the financial year ending March 2025, with mixed results that prompted varied responses from leading brokerages. The IT services giant posted a consolidated profit of ₹4,076 crore for the October-December period, representing a sequential decline from the preceding quarter's ₹4,235 crore.

Financial Performance Overview

The company's bottom-line performance fell short of analyst expectations, with Bloomberg's consensus estimate projecting an 11% growth to ₹4,702 crore. A significant factor impacting the results was the implementation of New Labour Codes, which resulted in an estimated one-time increase in provision for employee benefits worth ₹956 crore.

Brokerage Reactions and Target Price Revisions

Despite the sequential profit decline, several prominent brokerages issued positive notes and raised their target prices on HCL Technologies, citing strong operational indicators and improved outlook.

Morgan Stanley Assessment

Morgan Stanley maintained its Equal-weight rating while raising the target price to ₹1,760 from ₹1,680. The brokerage highlighted several positive aspects:

The brokerage noted that Q3 performance surprised positively, prompting an upgrade to the full-year outlook. Growth visibility into FY27 appears slightly better than earlier expectations, with margins expected to normalise around an 18% base next year. However, Morgan Stanley cautioned that strong recent performance is already reflected in premium valuations, seeing limited upside from current levels.

Kotak Securities Perspective

Kotak Securities maintained its Reduce rating but significantly raised the target price to ₹1,680 from ₹1,500. The brokerage's analysis revealed:

• The quarter was solid overall, driven primarily by the products segment
• Services performance was moderately better than expected
• Net-new bookings were strong, supported by a large deal win
• Limited scope for meaningful EBIT margin expansion due to cost takeout-led demand environment
• Valuations remain rich, with the stock trading at a premium to peers

Citi's Analysis

Citi maintained a Neutral rating while raising the target price to ₹1,700 from ₹1,670. The brokerage's key observations included:

Citi noted that forward-looking indicators remain stronger than peers, with management focused on identifying and tapping new spending areas. The brokerage has raised FY27 and FY28 earnings estimates by 2% each, though it maintains a cautious stance on the IT services sector overall.

Market Outlook

The mixed quarter results, characterised by profit decline due to one-time provisions but strong operational metrics, have led to cautious optimism among analysts. While brokerages acknowledge the impact of labour code provisions on current profitability, they remain positive about the company's deal momentum and forward-looking indicators. The consensus appears to be that while near-term challenges exist, the company's operational performance and deal wins provide a foundation for future growth.