HCLTech, India’s third-largest software services provider, saw its shares tumble nearly 10% on January 14, marking its worst session since 2015. The company reported a 5.1% increase in consolidated revenue to ₹298.9 billion ($3.45 billion), missing analysts’ expectations of ₹300.68 billion due to a weaker performance in its software segment. Despite raising its full-year revenue growth outlook to 4.5%-5%, the mid-point guidance fell short of market expectations, triggering downgrades from 11 brokerages.
CEO C Vijayakumar expressed optimism about an improving demand environment in 2025, aligning with comments from industry leader Tata Consultancy Services. However, brokerages highlighted concerns over a slower ramp-up of discretionary deals and underwhelming fourth-quarter commentary. The stock’s sharp decline overshadowed its strong performance in 2024, where it outpaced peers with a 31% rise compared to the Nifty IT index’s 22% growth.
HCLTech’s rivals, Tata Consultancy Services and Infosys, experienced moderate gains of 8.5% and 22.5% respectively in 2024 but saw minor declines on the day. The company’s underperformance highlights the challenges in sustaining growth amid fluctuating demand in the software industry. The broader Nifty 50 index gained 0.5% on the same day, recovering from a 1.5% drop in the previous session.