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.

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.