HCL Technologies’ Q2 FY26 results drew extensive commentary from leading brokerages as the company posted solid revenue growth, improved margins, and stronger deal wins amid an industry-wide focus on AI-led transformation.
How Are Brokerages Interpreting HCL Tech’s Q2 FY26 Results?
HCL Tech reported revenue growth of 2.4% QoQ in constant currency to USD 3.64 billion, surpassing street expectations. EBIT margin expanded by 110 bps QoQ to 17.4%, while total contract value rose 42% sequentially to USD 2.57 billion. Services growth guidance for FY26 was raised to 4–5%, with management maintaining optimism on deal flow and profitability improvement through FY27.
What Are the Key Takeaways from Brokerage Reports? Most global and domestic research houses view HCL Tech’s Q2 as a strong quarter supported by broad-based growth across verticals and consistent execution in AI and cloud transformation services. The stock’s valuation remains reasonable compared with TCS and Infosys, although several analysts expect limited near-term re-rating due to sectoral headwinds.
To study sectoral positioning and institutional coverage across India’s IT leaders, explore Stock Market Insight and Expert SEBI Guidance for SEBI-approved IT industry analysis and portfolio strategies.
How Do Different Brokerages View the Stock?
- Motilal Oswal: Maintains Buy with a TP of ₹1,800, calling HCL Tech the best large-cap IT bet amid macro uncertainty.
- Nomura: Retains Buy with TP ₹1,660, citing sustained margins and higher AI-led growth.
- Goldman Sachs: Neutral at ₹1,620; expects gradual margin recovery into FY27.
- Jefferies: Buy with TP ₹1,730; highlights superior free cash flow and strong deal wins.
- Morgan Stanley: Equal Weight with TP ₹1,680; sees steady long-term margin trajectory.
- CLSA: Outperform with TP ₹1,660; believes re-rating depends on EBIT margin recovery.
- Nuvama: Hold at ₹1,650; notes valuations are fair post recent outperformance.
Consensus across brokerages points to steady demand for AI-led and cloud services, improving pricing discipline, and long-term EBIT margins of 18–19% by April 2026. The company’s AI Force platform already has 47 active clients, with management targeting 100 by the end of FY26. Capex intensity remains low, preserving cash for buybacks and dividends.
What Lies Ahead for Investors? The stock trades at 21x FY26E EPS, slightly below the sector median, offering a balanced risk-reward setup. Most analysts expect margin expansion to continue as AI investments mature. HCL Tech’s ability to convert strong TCVs into revenue growth will be the key trigger for a sustained uptrend in FY26–27.
For regulated coverage on IT earnings and actionable setups in India’s tech leaders, follow our Stock Market Insight and Expert SEBI Guidance resources for in-depth updates and investment frameworks.
HCL Tech’s strong execution, AI-led innovation, and resilient margins make it one of the preferred large-cap picks within India’s IT universe, though investors may await stronger global cues before re-rating triggers emerge.
Investor Takeaway: Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that HCL Tech’s consistent growth in AI-driven services and expanding TCV base signal long-term value creation potential, even amid near-term sectoral moderation.
Related Queries
Why Do Brokerages Maintain a Positive Long-Term View on HCL Tech?
How Will AI and Cloud Transformation Drive HCL Tech’s Growth?
What Margin Trends Are Analysts Forecasting for FY26–27?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment adviser before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
