UPDATE 1 — India's HCLTech jumps as margin beat, deal wins outweigh software weakness
(Updates with details and brokerage comments) Oct 13 (Reuters) — Shares of HCLTech rose as much as 4.9% in early trade on Tuesday after brokerages pointed to a stronger-than-expected quarterly margin performance, robust deal bookings and growing revenue from advanced AI services that offset concerns over weaker software sales. Shares were trading 4.4% higher at 1276.2 rupees as of 9:44 a.m. IST. The Nifty IT index was also up 3% and the benchmark Nifty 50 index was up 0.8%. HCLTech's net profit rose 21.2% to 51.32 billion rupees ($538.85 million), beating analysts' expectations of 48.59 billion rupees. The IT service provider's annualised advanced AI revenue rose to $219 million from $171 million in the previous quarter. Analysts at brokerage Jefferies noted that HCLTech is among the few large IT firms to project revenue growth visibility of more than 5% in constant currency in fiscal year 2028, along with steady margin delivery. The brokerage said the revised revenue growth guidance of 2.5% to 4% suggests a steady outlook for the services segment, and upgraded the stock to "hold" from "underperform". Nomura analysts echoed the view, noting that HCLTech's services revenue growth an
9% in early trade on Tuesday after brokerages pointed to a stronger-than-expected quarterly margin performance, robust deal bookings and growing revenue from advanced AI services that offset concerns over weaker software sales. m. IST. 8%.
59 billion rupees. The IT service provider's annualised advanced AI revenue rose to $219 million from $171 million in the previous quarter. Analysts at brokerage Jefferies noted that HCLTech is among the few large IT firms to project revenue growth visibility of more than 5% in constant currency in fiscal year 2028, along with steady margin delivery. 5% to 4% suggests a steady outlook for the services segment, and upgraded the stock to "hold" from "underperform".
Nomura analysts echoed the view, noting that HCLTech's services revenue growth and margin performance were strong in the September quarter. 2% beat street expectations, helped by AI-led efficiencies, operating leverage and a richer mix of advanced AI services. 57 billion a year earlier, growing traction in large accounts, along with continued investments and the company's long-term AI ambitions supported its view that HCLTech could outgrow the industry over the next couple years. com)