HCL Technologies: Motilal Oswal Maintains Buy Recommendation, Targets Rs 1650

Motilal Oswal Reiterates Buy Rating for HCL Technologies Following Q4FY26 Earnings

HCL Technologies (HCLT) recently reported its fourth quarter (4Q) earnings for the fiscal year 2026 (FY26), with revenue totaling USD3.7 billion. This represents a quarterly on-quarter (QoQ) decline of 3.3% in constant currency (CC), falling short of Motilal Oswal's estimate of a 0.9% QoQ decline. The company's earnings before interest and taxes (EBIT) margin came in at 16.5%, slightly lower than the research firm's estimate of 17.2%.

Despite the decline in revenue, HCLT's new deal total contract value (TCV) for 4QFY26 reached USD1.9 billion, a 35.4% year-over-year (YoY) increase. For the upcoming fiscal year 2027 (FY27), the company has provided guidance on revenue growth, expecting it to range between 1% and 4% YoY in CC. Specifically, services revenue growth is anticipated to fall within a narrower range of 1.5% to 4.5% YoY in CC, which is lower than Motilal Oswal's expectations of 3-6%.

Outlook and Recommendation

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In light of the earnings report and guidance, Motilal Oswal has reaffirmed its buy rating for HCL Technologies. The research firm has also revised its target price (TP) to INR1,650, based on a price-to-earnings (P/E) multiple of 20 times the company's estimated earnings per share (EPS) for fiscal year 2028 (FY28).