India’s HCLTech forecasts muted annual revenue growth, quarterly numbers miss view

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 last reported double-digit revenue growth in the March 2023 quarter. Since then, uncertainties from changing U.S. tariff and immigration policies, and now from geopolitical turmoil in the Middle East, have led to clients focussing on optimising costs.

HCLTech, the country’s third-largest IT services firm, also missed fourth-quarter earnings expectations, despite a windfall from the rupee’s sharp depreciation. CEO C Vijayakumar cited discretionary spends slowing down across the sector, with two specific U.S. clients likely holding back further tech spending.

The company earns over half its revenue from the U.S.

Its 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.

Its Europe business fell 2.9%, while performance in its telecom vertical slumped 8.6%.

Larger rival Tata Consultancy Services had a quarterly earnings beat and strong deal wins, but saw 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.

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.

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.

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 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)