HCLTech, India's third-largest IT services provider, experienced a significant stock market setback on Tuesday, with shares plummeting nearly 10% following the release of its Q3 financial results for fiscal year 2025. The company reported a consolidated revenue of Rs 29,890 crore, representing a 5.1% year-on-year increase, which fell short of analyst expectations. Despite achieving a net profit of Rs 4,591 crore, marking a 5.5% year-on-year growth, the market reacted negatively to the company's performance and muted guidance.

The detailed financial breakdown reveals nuanced performance across different business segments. HCLTech's earnings before interest and taxes (EBIT) rose 8.6% year-on-year to Rs 5,821 crore, with EBIT margins expanding by 90 basis points. The company secured new deal wins totaling $2,095 million during the quarter and added 2,014 freshers to its workforce. CEO C Vijayakumar highlighted the broad-based performance across business lines, emphasizing the company's focus on digital and AI offerings. However, the last-12-month attrition rate increased slightly from 12.8% to 13.2%, indicating potential workforce challenges.

Brokerages responded with mixed reactions, with at least 11 institutions adjusting their ratings on the stock. Nomura maintained a 'Buy' rating with a target price of Rs 2,000, citing a strong deal pipeline and potential growth from generative AI. Conversely, Jefferies retained a 'Hold' rating with a target of Rs 2,060, expressing concerns about the revenue falling slightly short of estimates. The company revised its full-year revenue growth guidance, raising the lower end to 4.5-5% in constant currency terms, which was previously set at 3.5-5%. This adjustment incorporates the impact of the recent acquisition of HPE's Communication Technology Group assets.

In a move to reward shareholders, HCLTech declared an interim dividend of Rs 18 per share, which includes a special Rs 6 per share dividend commemorating 25 years since its public listing. The stock, which had previously been trading at Rs 1,985.25, crashed to the Rs 1,799 mark on the BSE, representing a market capitalization of approximately 4.9 lakh crore. Analysts from Kotak Institutional Equities suggested that while HCL Tech is expected to benefit from improving demand and a broad-based deal pipeline, the near-term outlook remains muted due to mega deal anniversaries and a potentially tepid growth trajectory compared to its peers.