HCL Tech Share Price Target 2025: Brokerage Gets Bullish After Q4 Results Announcement - Check Target Price

HCL Technologies Share Price Target:  Nirmal Bang Institutional Equities has upgraded HCL Technologies to a positive outlook. The company has reaffirmed a 'Buy' recommendation and raised the target price for the stock to Rs 1,748.

However, HCL Tech delivered 0.8% quarter-on-quarter basis CC revenue decline, in line with consensus estimates and a miss on NBIE estimates.

HCL Technologies : Share Price Target

Nirmal Bang Institutional Equities has upgraded HCL Technologies to a positive outlook. The company has reaffirmed a 'Buy' recommendation and raised the target price for the stock to Rs 1,748. 

The move is a testament to the company's strong deal wins and encouraging growth trajectory, notwithstanding a subdued performance in the fourth quarter of FY25. The current price for the HCL Technologies stands at Rs 1480.

HCL Q4 Performance: Mixed Results 

In Q4FY25, HCL Technologies posted a 0.8% quarter-on-quarter fall in constant currency revenue, in line with consensus estimates but lower than Nirmal Bang's expectations. The fall was mainly on account of seasonality in the software segment, which posted a 12.9% fall. 

But the Engineering and R&D (ER&D) segment performed better, posting a 5.5% QoQ and 8.5% YoY growth in constant currency terms.

The EBIT margin of the company was 17.9%, which fell short of expectations because of increased employee and SG&A expenses. Seasonal effects, salary increases, and spending on sales and marketing were some of the factors that led to the margin squeeze. However, currency fluctuations brought some relief.

HCL Technologies: Deal And Outlook

HCL Technologies posted net-new bookings of $3 billion in Q4FY25, a 40% QoQ and 31% YoY increase. These bookings were higher than the company's guidance range and comprised a large ER&D deal. The ER&D segment recorded all-time high bookings in FY25, about 75% more than FY24.

For FY26, the company has guided for a 2-5% YoY constant currency revenue growth, including a 100 basis points contribution from inorganic growth. The guidance factors in different macroeconomic scenarios, with the higher end being based on a stable environment and execution-driven closure of large deals in the pipeline.

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HCL Technologies: Valuation and Dividend

Nirmal Bang's new target price of Rs 1,748 is calculated based on an estimated valuation of around 22.2 times the March 2027 projected earnings, modestly higher than the three-year average. 

HCLT declared an interim dividend of Rs 18 per share in Q4 for the FY25. With this, the total dividend for FY25 stood at Rs 6,6, giving a dividend yield of 4.5%, which is one of the highest among peers

The company's continued investment in AI strengths, especially via its AI labs, and success in winning large deals in the Global Capability Centres (GCC) segment are likely to drive long-term growth.

HCL: Stock Market Reaction

After the announcement, HCL Technologies' shares jumped 7%, their best since September 2020. The upbeat guidance and robust deal momentum have set the company in a good place among its competitors in the IT space.