HCLTech shares slumped nearly 10% in early trade on Wednesday after the IT major reported a weaker-than-expected March quarter and issued cautious growth guidance for the new financial year, sparking a sharp negative reaction from investors.
The stock fell as much as 9.64% to Rs 1,302.60 in morning trade. The decline also weighed on the broader IT pack, with other technology stocks trading lower.
Infosys declined 2.8%, Tata Consultancy Services slipped 1.9%, while Tech Mahindra dropped 4.2%.
The biggest trigger for the selloff was HCLTech’s outlook rather than the quarterly numbers themselves.
The company guided for FY27 revenue growth of 1%-4% in constant currency, lower than Street expectations of around 3%-5%.
Management said discretionary spending remains soft, some client decisions are getting delayed, and two client-specific ramp-downs would weigh on growth.
For investors, that raised concerns that demand recovery in the IT sector may take longer than expected.
For the March quarter, HCLTech reported consolidated net profit of Rs 4,488 crore, up 4.2% from a year ago, while revenue rose 12.3% to Rs 33,981 crore.
However, both profit and revenue were below analyst estimates, according to Reuters. New deal bookings of $1.94 billion were also seen as softer than expected, adding to worries over near-term momentum.
Several brokerages turned cautious after the results.
Jefferies reportedly downgraded HCLTech to ‘Underperform’ and cut its target price, citing weak growth visibility and a disappointing guidance outlook.
Other analysts also flagged that earnings expectations for FY27 may need to be revised lower if demand remains sluggish.
Brokerages broadly said the company’s long-term positioning remains intact, but near-term sentiment could stay under pressure until growth improves.
It may be noted that HCLTech had outperformed some peers in recent months, which meant expectations were relatively high going into results. When a stock trades with premium expectations, even a modest earnings miss or weak guidance can trigger a sharper correction.
The market reaction also reflects broader nervousness around the IT sector, where investors are closely tracking client spending trends in the US and Europe.
The next key trigger for HCLTech shares will be management commentary over the coming quarters, deal wins, and whether client spending improves in core markets.
If growth visibility strengthens, the stock could stabilise. But if delays in decision-making and weak discretionary demand continue, pressure may persist.
For now, it seems that weak guidance is hurting sentiment more than the March quarter earnings miss.