HCL Tech Share Price Target 2025: Axis Securities Reiterates 'Buy' Amid Promising Growth Outlook

Axis Securities has maintained its 'Buy' recommendation for HCL Technologies, raising the target price to Rs 2,175 from the earlier Rs 2,045. The revised target indicates a 10% upside from the CMP of ₹1,975. The valuation now stands at 24x FY26E P/E, slightly lower than the previous 25x valuation.

The report highlights HCL Tech ’s robust medium- and long-term growth potential, buoyed by consistent deal wins and resilient demand trends.

Long-Term IT Demand Remains Strong
According to Axis Securities, the IT sector's long-term demand scenario remains optimistic and is expected to regain momentum in CY25 and beyond. The report notes:

“We believe there are early signs of improvement in the demand environment and expect demand to pick up in the coming quarters. Supply-side constraints are also likely to ease over the medium term.”

However, the firm cautions about near-term uncertainties in demand, which could create ambiguity around immediate growth prospects.

Q3FY25 Performance Highlights
HCL Tech delivered a strong performance in Q3FY25, with revenue of Rs 29,890 crore, reflecting a 3.6% quarter-on-quarter (QoQ) growth. Key financial highlights include:

Operating Profit: Rs 5,821 crore, up 9% QoQ.
Net Profit: Rs 4,350 crore, registering an 8.4% QoQ growth.
Margins: Operating margins improved by 90 basis points to 18.6%, supported by the high-margin HCL Software segment, which expanded by 896 basis points.
Dividend: Rs 12 per share and a special dividend of Rs 6 per share announced.

Robust Deal Wins to Propel Growth
HCL Tech secured $2.1 billion worth of deals in Q3FY25, comprising 12 deals, of which seven were from the services segment and five from the software business.

Axis Securities commented:

“The management remains confident of gaining revenue growth momentum over the medium term, supported by deals secured in the previous quarters.”

Stable Margins and Growth Visibility
The management retained its EBIT margin guidance at 18–19% and expects revenue growth of 4.5–5% YoY in constant currency (CC). Strong visibility from long-term contracts with global brands adds to the company’s growth confidence.

Outlook and Recommendation
Axis Securities believes HCL Tech is well-positioned for sustained growth, citing favorable demand conditions and a reduction in discretionary spending uncertainty. The firm noted:

“We recommend a ‘Buy’ rating on HCL Tech, assigning a 24x P/E multiple to FY26E earnings to arrive at a target price of ₹2,175.”

Sector Outlook: Cautiously Optimistic
While the sector faces near-term challenges, Axis Securities maintains a cautiously positive outlook, expecting recovery by CY25.

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