April 22 (Reuters) - HCLTech fell as much as 9.4% on Wednesday after it forecast fiscal 2027 revenue growth below analysts' expectations and reported a fourth-quarter earnings miss, citing restrained spending by clients of India's $315 billion IT industry.
Shares were down 9.2% at 9:30 a.m. IST, heading for their worst session in eleven years. The stock was the top loser on the Nifty IT sub index , which fell 3%, dragging broader benchmarks lower.
The weak performance and cautious outlook signal sector‑wide challenges with discretionary spending rather than an HCL‑specific problem, analysts at Goldman Sachs said, adding that slower project ramp‑ups and macro pressures suggest any demand recovery will remain elusive.
Top Indian IT companies have been beset by uncertainties over the last one year stemming from U.S. tariff and immigration policies to geopolitical turmoil in the Middle East, with clients now choosing to focus on optimising costs.
At least six brokerages have cut their price target expectations, with Jefferies also downgrading the stock to "Underperform" from "Hold".
"The business environment remains highly fluid, making it difficult to form a definitive view of how the next 12 months will unfold," said CEO C Vijayakumar in a post-earnings call.
He also called out specific project scaledowns from two clients in the Americas region, which could shave about 0.5% off annual growth.
Advanced AI revenue--derived exclusively from providing services such as agentic AI and AI engineering to clients—grew more than four-fold to $620 million on an annualised basis from $146 million in the third quarter.
While HCLTech's AI offerings could aid market‑share gains over time, analysts at BofA said its shares, trading at a more than 15% premium to peers Infosys and Tata Consultancy Services, had priced in high expectations, leaving scope for a pullback after the fourth quarter.
Larger rival TCS had a quarterly earnings beat and strong deal wins, but logged a rare decline in annual revenue in dollar terms, whereas smaller rival Wipro missed earnings estimates, flagging geopolitical and policy disruptions as well as client-specific issues.
Infosys will report its results on Thursday.
(Reporting by Urvi Dugar and Pranav Kashyap in Bengaluru; Editing by Ronojoy Mazumdar)
