HCL Technologies Share Price Plunges Over 8% After Q4 Results – Here’s Why

Such a sudden fall in the stock price is primarily attributed to disappointment among investors with respect to the performance of the stock with regards to its earnings potential and future projection. Within a one-year period, the stock price has declined by about 11%, while the Nifty 50 Index has risen by merely 1.1%. However, over the last week, month, and year, the price of the stock has plunged by over 10%, 2%, and nearly 20%, respectively. Despite this, the stock promises to be lucrative in the long run, with returns of approximately 25% in three years and 36% in five years.

Q4FY26 performance misses expectations

Net profit of the company, as a consolidated entity, for the March quarter stood at ₹4,488 crore, showing a rise of 4.2% from last year and 10.1% from the previous quarter. However, the figure came below the estimate of ₹4,696 crore. Operating revenue of the company amounted to ₹33,981 crore, showing a growth of 12.35% from last year and 0.3% from the previous quarter, missing expectations.

In constant currency terms, operating revenue grew by 2.4% from last year and fell by 3.3% from the previous quarter to $3.68 billion, underperforming the estimate of $3.76 billion.

Margin pressure and segment weakness weigh

Operating performance continued to face challenges during the quarter. The company's earnings before interest and taxes (EBIT) stood at ₹5,620 crore, representing a 3.3% year-over-year rise but marking a substantial 10.6% drop from ₹6,285 crore recorded in the prior quarter. EBIT margins decreased to 16.5% from 18.6% sequentially, falling short of the expected figure of 17.6%. Excluding restructuring expenses, margins came in at 17.7%, down from 19.4% in Q3 FY26 and 18% in the same period last year.

The primary drivers of the underperformance were mainly attributed to a significant slump in the software business. The management cited lower discretionary spending and delays in making decisions, especially in the telecom industry, together with the cancellation of some SAP initiatives, as factors behind the shortfall. IT and business services and engineering research and development (ER&D) businesses registered positive growth, albeit insufficient to counterbalance the downturn in software.

Deal wins and operational metrics

Despite the disappointing results for the quarter, the company has managed to secure a total contract value (TCV) of $1.94 billion in the quarter ending in FY26. The annualized TCV stands at $9.323 billion. In addition, the company has recorded revenue from AI applications exceeding $620 million annually.

The attrition rate in the quarter was 12.5%.

Weak FY27 guidance dampens sentiment

Investors' sentiment was impacted not only by the earnings growth projection but also by the conservative estimates offered by HCL Technologies for the FY27 year. The growth rate of revenues is projected at 1%-4%, which is below expectations of the markets. Services revenues' growth is projected to be at 1.5%-4.5%, with an EBIT margin of 17.5%-18.5%.

Dividend announcement and record date

The company has declared dividend of ₹24 per share for the current quarter; hence, total dividend for the financial year 26 is ₹60 per share. For the above-mentioned record date, company has fixed April 25, 2026, while payment date is May 5, 2026.

Market outlook

The latest drop in the HCL stock price reflects concerns among investors over the weak performance in the IT sector amidst macroeconomic headwinds. Considering that the firm has not given any guidance for the coming period, coupled with problems related to margins, a substantial rise in consumer demand is needed for the stock to strengthen.