By Sai Ishwarbharath B and Haripriya Suresh
BENGALURU, April 21 (Reuters) – India’s HCLTech forecast revenue growth of 1%-4% for fiscal 2027 on Tuesday, below analysts’ expectations of 3%-5%, as clients kept a tight lid on discretionary spending.
Top companies in India’s $315-billion IT industry have been beset by uncertainties from U.S. tariff and immigration policies to geopolitical turmoil in the Middle East, with clients now choosing to focus on optimising costs.
“The business environment remains highly fluid, making it difficult to form a definitive view of how the next 12 months will unfold,” CEO C Vijayakumar said in a post-earnings call. He also called out specific project scaledowns from two clients in the Americas region, which could shave off about 0.5% of annual growth.
The U.S. accounts for more than half the company’s overall revenue.
Anshul Jethi, analyst at LKP Securities, called the company’s annual forecast and deal wins “disappointing”, but said it was “more of an industry problem than an HCLTech problem as overall demand and discretionary spends have been hurt.”
The forecast looks “conservative” but could be upgraded if discretionary spends return by end of first quarter, he added.
HCLTech’s new bookings stood at $1.94 billion, its lowest level in three quarters. New bookings had come in at $3 billion both in the previous quarter and in the year-ago period.
Larger rival Tata Consultancy Services had a quarterly earnings beat and strong deal wins, but logged a rare decline in annual revenue in dollar terms. Smaller rival Wipro missed earnings estimates, flagging geopolitical and policy disruptions as well as client-specific issues.
EARNINGS MISS
HCLTech’s consolidated revenue rose a smaller-than-expected 12.3% to 339.81 billion rupees ($3.63 billion) in the January-March quarter, with analysts expecting 342.36 billion rupees, including the rupee’s depreciation.
Net profit rose 4.3% to 44.88 billion rupees, below analysts’ average estimate of 46.57 billion rupees.
The estimates are as per data compiled by LSEG.
Performance in its Europe business fell 2.9%, and its telecom vertical slumped 8.6%.
However, advanced AI revenue—revenue it derives exclusively from providing services such as agentic AI and AI engineering to its clients—grew four-fold to $620 million on an annualised basis from $146 million in the third quarter.
Infosys and Tech Mahindra will report their numbers later this week.
($1 = 93.5000 Indian rupees)
(Reporting by Haripriya Suresh and Sai Ishwarbharath B in Bengaluru; Editing by Janane Venkatraman)
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