HCL Tech share price dips after Q1 results 2025. More pain ahead?

HCL Technologies share price: After the announcement of HCL Technologies' Q1 results 2025 on Monday, the HCL Tech share price witnessed strong selling pressure during the Opening Bell on Tuesday. Today, the HCL Tech share price opened with a downside gap at ₹1,590 apiece on the NSE and touched an intraday low of ₹1,568.30 per share in the early morning deals, recording nearly 3 per cent dip against its previous day's close of ₹1,619.80 apiece on the NSE.

According to stock market experts, HCL Technologies Q1 results 2025 is disappointing as the Indian IT giant reported a 10 per cent YoY decline in net profit, whereas its operating margins also got compressed. However, the company management has expressed sharp recovery in the July to September 2025 quarter. They said that HCL Tech shares have a strong base at ₹1,500, and the IT stock is facing resistance at ₹1,700. They advised investors to maintain a buy-on-dips strategy until the HCL Tech share price is above ₹1,500.

Speaking on HCL Technologies results, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, “HCL Tech’s Q1 FY26 results reflect ongoing macroeconomic challenges and industry headwinds, with a 10% year-on-year decline in net profit to ₹3,843 crore, despite an 8.2% growth in revenue to ₹30,349 crore. The fall in profitability is largely attributed to lower utilisation rates and strategic investments in generative AI and go-to-market (GTM) initiatives. Operating margins compressed to 16.3%, down 160 bps sequentially, prompting the company to revise its FY26 margin guidance downward to 17–18% from 18–19% earlier. Revenue growth guidance was modestly raised to 3–5% in constant currency, reflecting cautious optimism amid a subdued demand environment. Additionally, net new deal wins dropped to $1.81 billion from $3 billion in the previous quarter due to procedural delays in large deal closures, although management expects a recovery in Q2.”

“Despite the near-term pressure on profitability and deal momentum, the company continues to emphasise long-term growth, especially in AI-driven services. CEO C Vijayakumar highlighted stable demand conditions and a healthy pipeline, with AI propositions gaining traction, aided by its OpenAI partnership. Strong cash flow metrics (OCF/NI at 129% and FCF/NI at 121%) and an improving return on invested capital (ROIC of 38.1%) underscore operational efficiency. The interim dividend of ₹12 per share reflects sustained shareholder commitment,” the SMC Global Securities expert added.

Advising investors to buy in this dip, Sumeet Bagadia, Executive Director at Choice Broking, said, “HCL Tech shares have strong support placed at ₹1,500, whereas it is facing a hurdle at ₹1,700. On the technical chart, the stock looms positive and one can initiate a buy-on-dips strategy and keep adding until the stock is above ₹1,500 for the short-term target of ₹1,700.”

Citi has also cut its target price for HCL Tech shares from ₹1,690 to ₹1,650 apiece.

HCL Technologies, India's third-largest IT company in terms of market capitalisation, reported its June quarter earnings (Q1FY26) on Monday, 14 July 2025. The company's consolidated profit fell almost 10 per cent year-on-year (YoY). Revenue from operations, however, rose 8 per cent YoY.

The IT major slightly tweaked its FY26 guidance, while highlighting the growing clout of AI in business growth.

Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, not Mint. We advise investors to check with certified experts before making any investment decisions.

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