HCL Tech share price falls over 1% after Q3 results. Should you buy, sell or hold?

HCL Tech share price dropped by more than 1% during Tuesday's trading session following the release of its Q3 results.

The IT company reported on Monday that its consolidated net profit for the December quarter declined by 11% year-on-year, totaling ₹4,076 crore compared to ₹4,591 crore from the same period last year.

In Q3FY26, the revenue from operations reached ₹33,872 crore, representing a 13% increase from ₹29,890 crore reported in the corresponding quarter of the previous financial year.

The net profit fell by almost 4% quarter-on-quarter from ₹4,235, while the revenue increased by 6% sequentially compared to ₹31,942 recorded in Q2FY26.

Further, the company has projected a revenue growth of 4% to 4.5% year-on-year in constant currency (CC) for FY26, with services revenue growth anticipated to be between 4.75% and 5.25% YoY in CC. The Earnings Before Interest and Taxes (EBIT) margin is expected to be in the range of 17% to 18%.

The company declared an interim dividend of ₹12 per equity share for the financial year 2025-26. The record date for dividend payment is set for January 16, 2026, and the payment will occur on January 27, 2026.

Here's what expert says

Seema Srivastava, Senior Research Analyst at SMC Global Securities, said that HCL Technologies reported a steady Q3 FY26 performance, marked by broad-based revenue momentum, healthy deal wins and resilient margins despite one-off headwinds.

Srivastava highlighted that operating performance was solid, with EBIT rising 13.2% QoQ to ₹6,285 crore and margins recovering to 18.6%, even after absorbing an 81 bps impact from restructuring costs.

According to Seema, the IT firm reported profitability was impacted by exceptional items, including a one-time ₹956 crore charge related to new Labour Codes, which led to YoY volatility in net profit; however, underlying earnings quality remained healthy, supported by strong cash generation with FCF at 120% of net income.

Seema Srivastava added that return metrics improved meaningfully, with ROIC at 39.4% on an LTM basis, reflecting disciplined capital allocation and improved operational efficiency.

“Deal momentum was a major positive, with new deal TCV of $3.0 billion, up 43.5% YoY, strengthening revenue visibility. Attrition declined to 12.4%, and fresh graduate hiring continued, positioning the company well for future demand. Management raised FY26 revenue growth guidance while maintaining EBIT margin guidance of 17–18%, signalling confidence in growth sustainability alongside margin discipline,” said Seema Srivastava.

Should you buy, sell or hold?

Prabhudas Lilladher noted that revenue growth surpassed their expectations, driven by the robust seasonality of HCLSoftware. The performance of the services business was also impressive, overcoming the effects of holidays and furloughs.

The brokerage is confident that this service-driven growth will maintain its momentum in FY27/FY28, supported by significant order acquisitions and an expanding revenue stream from AI. As a result, the brokerage is adjusting its topline CC growth forecasts upward by 30bps/20bps to 7.0% and 7.7% for FY27E/FY28E.

“Despite the beat on margins in Q3, we expect Q4 will see some normalization, while additional new labour code would also keep the margin in check. The stock is currently trading at 22x and 19x FY27E/FY28E EPS. We assign 22x to FY28 EPS to arrive at a TP of 1,910,” said the brokerage.

Technical Views

HCL Tech share price opened at ₹1,690.05 apiece on the BSE, the stock touched an intraday high of ₹1,696, and an intraday low of ₹1,626.40.

According to Anshul Jain, Head of Research at Lakshmishree, HCL Technologies is developing a strong 28-week cup and handle formation, with the handle evolving into a six-week bullish flag, adding conviction to the setup.

Jain explained that the tight, orderly handle reflects controlled supply absorption rather than distribution. Volume behavior across the base points to institutional accumulation, suggesting smart money positioning ahead of a directional move.

“If triggered, the move is likely to be aggressive in nature, with an initial upside objective toward the 1,825 zone. Risk remains contained within the handle, while failure to clear 1,695 would keep the stock range bound,” said Anshul Jain.

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