Analysts Cut Target Price On Disappointing FY25 Guidance

HCL Technologies Ltd. guided for 3–5% revenue guidance in financial year 2025, lower than 5% in the preceding fiscal, due to an expected slowdown in the first quarter. It prompted JP Morgan, Goldman Sachs and Kotak Securities to cut its target price on the stock due to concerns that the near-term demand would likely stay weak. The reductions led to its shares plunging to its lowest in over four months.

HCLTech is expecting a weak first half due to a 2% sequential decline in the first quarter of the current fiscal as productivity passback for large clients and offshoring of a large contract, Nirmal Bang said in a note.

Disengagement from the State Street joint venture and large deal contours are also likely to add to the fall in the IT-firm’s growth in the first quarter, according to JP Morgan.

HCLTech is expected to be the only company to post growth similar to the previous fiscal in the sector. Peers are likely to report improvement, Goldman Sachs said.

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