HCLTech saw about $4.5 billion wiped off its market value on Wednesday after the company guided for fiscal 2027 revenue growth that fell short of expectations. The cautious outlook, driven by muted client spending, is adding to concerns about when India’s $315 billion IT sector will see a meaningful rebound.
Analysts at Goldman Sachs said the weakness reflects broader industry pressures rather than an issue unique to HCLTech. They pointed to soft discretionary spending, slower project ramp-ups and ongoing macroeconomic uncertainty as signs that a demand recovery may still be some distance away. Over the past year, leading Indian IT firms have also been navigating uncertainty tied to the U.S. tariff and immigration policies, along with geopolitical tensions in the Middle East, prompting clients to prioritize cost optimization.
HCLTech shares closed 10.7% lower at 1,286 rupees, marking their steepest single-day fall in more than a decade. The company’s fourth-quarter results also came in below analyst estimates.
The weakness spread across the sector. Infosys and Tata Consultancy Services fell 3.4% and 3% respectively, while the broader IT index dropped 3.9%.
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Derivatives data from the NSE pointed to a cautious near-term outlook for HCLTech. For the May 26 expiry, there was a noticeable build-up in put positions at the 1,200-rupee strike, with open interest rising to 6,863 contracts by the close. At the same time, traders added significant call positions at the 1,300 level.
The positioning suggests markets are bracing for further downside, with some investors pricing in a possible fall of roughly 7% from current levels, while also signaling that any immediate upside may be capped.
Management commentary reinforced the uncertainty. CEO C. Vijayakumar said during the post-earnings call that the business environment remains highly fluid, making it difficult to predict how the next 12 months will play out. He also flagged project scale-downs from two clients in the Americas, which could trim around 0.5% from annual growth.
Elsewhere in the sector, Tech Mahindra recovered some ground to close 2.5% lower after dropping nearly 6% earlier in the session, even as it reported better-than-expected fourth-quarter revenue.