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HCL Technologies share price declined by 2.01 per cent to Rs 1,587.20 in early trade on Tuesday, after the IT major posted its Q1FY26 earnings. While the company reported strong revenue growth, weak margins and subdued deal momentum led to cautious market sentiment. However, many analysts believe the dip could be a buying opportunity — especially with a dividend payout around the corner.

HCL Tech’s consolidated revenue rose to Rs 30,349 crore, up from Rs 28,057 crore in Q1FY25. However, net profit dropped to Rs 3,844 crore from Rs 4,259 crore a year ago, and Earnings Per Share (EPS) declined from Rs 15.70 to Rs 14.18.

Operating margins fell to 16.3 per cent, compared to 18 per cent in the previous quarter, as the company increased investments in growth initiatives.

HCL Tech also updated its guidance — raising revenue growth expectations to 3–5 per cent (in constant currency terms), while trimming EBIT margin guidance to 17–18 per cent, down from 18–19 per cent earlier.

The company has declared both an interim and a special dividend, with a payment date of 28 July 2025. HCL Tech continues to demonstrate strong capital return policies, with a consistent history of dividend payouts and bonus shares — including a 1:1 bonus issue in 2019.

Zee Business Managing Editor Anil Singhvi remains cautious on HCL Tech. Anil Singhvi has given a sell call on HCL Tech futures with a stop loss at Rs 1625 and multiple downside targets at Rs 1597, Rs 1560, Rs 1545, and Rs 1530. He cites weak quarterly results across all key parameters as the primary reason for the bearish view. Additionally, the company has reduced its margin guidance, which is seen as a negative indicator, and order inflows have also been disappointing. Analysts expect a 5 per cent cut in EPS (Earnings Per Share) estimates following the results. Moreover, the stock has already rallied 16 per cent over the past three months, making it prone to a near-term correction.

Several global brokerages had differing takes on the results:

JP Morgan downgraded the stock to Neutral, trimming its target to Rs 1,700 from Rs 1,800.

Jefferies upgraded HCL Tech to Buy with a target of Rs 1,850, citing strong growth prospects.

Macquarie reiterated Outperform with a target of Rs 1,970 — the most bullish on the Street.

Citi, Goldman Sachs, and Morgan Stanley all maintained cautious Neutral or Equalweight stances due to margin risks and weak deal TCV.

Solid Long-Term Growth Trajectory

Despite Q1 softness, HCL Tech has shown consistent growth over the years:

Revenue rose from Rs 75,379 crore in FY21 to Rs 117,055 crore in FY25

Net profit grew from Rs 11,169 crore to Rs 17,399 crore

EPS increased from Rs 41.07 to Rs 64.16

With the stock currently trading at Rs 1,587.20, the market is at a crossroads. While short-term margin pressures remain a concern, Anil Singhvi’s positive outlook — combined with dividend payouts and long-term earnings potential — suggests the dip may be worth considering for investors with a medium- to long-term view.

As a NIFTY 50 constituent, HCL Tech remains a bellwether for the IT sector and a closely watched stock across portfolios.

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