HCL Technologies has announced an upward revision to its full-year services revenue growth forecast, signaling improved business prospects for the IT services major. The company shared these updates during its recent conference call with stakeholders.

Revised Revenue Growth Projections

The company has raised its services revenue growth forecast for the full year, presenting a more optimistic outlook for its core business segment.

The services revenue growth forecast revision to 4.75%-5.25% in constant currency terms represents an upward adjustment from earlier projections, while the overall company-level guidance remains positioned at 4%-4.5% for the full year.

Profitability Guidance Maintained

Despite the revenue growth revision, HCL Technologies has maintained its profitability outlook, keeping the EBIT margin guidance steady.

The unchanged EBIT margin guidance of 17%-18% indicates the company's confidence in maintaining operational efficiency while pursuing higher revenue growth targets. This suggests effective cost management and operational optimization strategies remain in place.

Strategic Outlook

The upward revision in services revenue growth forecast reflects HCL Technologies' assessment of market conditions and business pipeline strength. The company's ability to raise growth projections while maintaining margin guidance demonstrates balanced growth expectations and operational discipline.

The guidance updates shared during the conference call provide stakeholders with clearer visibility into the company's performance expectations and strategic direction for the remainder of the fiscal year.

HCL Technologies shares are set to be in focus following the company's impressive December-quarter performance that exceeded analyst expectations across key metrics. The IT services major demonstrated strong execution capabilities while navigating regulatory changes and market dynamics.

Strong Q3 Performance Beats Estimates

The company delivered robust financial results for the quarter, significantly outperforming market expectations:

However, the quarter was impacted by regulatory changes. The implementation of new labour codes resulted in a significant one-time impact of ₹956.00 crores at the EBIT level, equivalent to approximately 81 basis points. This also translated to a ₹719.00 crore hit to net income in Q3 FY26. Management indicated that the ongoing impact from these changes is expected to be limited to 10-20 basis points going forward.

Upgraded FY26 Guidance Reflects Confidence

Based on strong quarterly execution and deal wins over recent quarters, HCLTech raised its full-year guidance:

The company maintained its full-year EBIT margin guidance of 17-18% for FY26, which excludes the one-time impact of new labour codes but includes restructuring costs.

AI Revenue Shows Strong Momentum

HCLTech's artificial intelligence initiatives demonstrated significant progress during the quarter. Advanced AI revenue reached $146.00 million, representing approximately 3.80% of overall revenue. This segment showed robust quarter-on-quarter growth of 19.90% in constant-currency terms. Management noted that while spending on traditional technology is slowing, AI-led investments are increasingly driving future client spending patterns.

Mixed Analyst Reactions Despite Upgrades

Brokerages responded to the results with raised price targets, though opinions varied on the stock's potential:

Positive Outlook:

• Macquarie maintained 'Outperform' rating with ₹2,080.00 price target, viewing HCLTech as a growth leader among large-cap Indian IT services companies
• Nomura kept 'Buy' rating and raised target to ₹1,810.00, citing the company's asset-light approach and GenAI focus
• Morgan Stanley maintained 'Equalweight' but increased target to ₹1,760.00, expecting 18% margin as base level for next year

Cautious Stance:

• CLSA retained 'Hold' rating with ₹1,661.00 target, noting historical seasonality patterns
• Kotak Institutional Equities maintained 'Reduce' rating with ₹1,680.00 target, citing limited margin expansion scope and premium valuations at 23 times FY27E earnings

Market Performance

Shares of HCLTech settled 0.34% higher on Monday at ₹1,667.00. The stock has gained 3.00% so far in 2026, reflecting investor confidence in the company's strategic direction and execution capabilities.