HCL Technologies Limited

Technology — Information Technology Services · NSE

₹1,380.00+₹20.00 (+1.47%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by high debt relative to equity.

In simple words: Strong business and financial position, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of HCL Technologies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

HCL Technologies Limited provides IT and business services, engineering, research and development services, software products, and IP-led offerings. It operates through IT and Business Services, Engineering and R&D Services, and HCL Software segments.

IndustryInformation Technology Services

SectorTechnology

Annual revenue₹1.30 L Cr

How does it make money?

Turns over ₹1.30 L Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation.

EBITDA margin21.6%

Net margin12.8%

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, WIPRO LTD, TECH MAHINDRA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

WIPRO LTDP/E 14.5x · ROE 15.9%

TECH MAHINDRA LIMITEDP/E 28.8x · ROE 19.2%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 27.2%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 24.6% against a peer median of 32.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE27.2%

ROE24.6%

Peer median ROE32.0%

What is the outlook?

40 analysts covering the stock expect revenue to grow about 5.2% and earnings to grow about 8.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+5.2%

Est. earnings growth+8.0%

Analysts40

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +28% while net margin moved -13% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+28%

Margin effect-13%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 8.7% is steady
✗ Profit CAGR of only 3.9%
✗ Latest-year revenue growth of 2.2% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

69/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

47/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

20.4x

3Y Median

25.3x

40 monthly readings · mean 25.3x · range 16.7x–33.1x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 19% below its 3y median of 25.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 23% above the peer median of 16.5x.

vs. its own history

Fair

25.3x median over 40 months · -19%

vs. sector peers

Expensive

16.5x median of 4 peers · +23%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

20.4x

P/B

4.95x

EV/EBITDA

13.2x

PEG

5.28

Dividend Yield

3.48%

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 27.2% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Margins are compressing
EBITDA margin has slipped from 23.2% to 21.6% over 3 years.

Red Flags

1 item require attention · 1 high

🔴High leverageFinancial
Debt/Equity of 7.91x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 27.2% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 23.2% to 21.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 7.91x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 23% above the peer median. That premium needs a reason that persists, or it closes.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 20%✓ 21.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 6% a year✓ 8.7% CAGR
Latest reported year was 2.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹18,553 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 24%✓ 27.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 3 neutral · 1 weak

Market Cap

₹3.73 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

20.4x

Fair

Fairly valued against the generic band

P/B Ratio

4.95x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹67.59

Profitable

Profitable on a per-share basis

ROE

24.6%

Strong

Strong capital efficiency

ROCE

27.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

7.91x

High

High leverage

Revenue Growth (YoY)

2.2%

Modest

Modest growth

Profit Growth (YoY)

10.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

3.48%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹168 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1,380

P/E (Forward)

17.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

13.1%

Good

Assets are working hard

Operating Margin

18.2%

Good

Healthy core-business profitability

Net Margin

13.2%

Good

Strong bottom-line conversion

Current Ratio

1.98

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.03

Defensive

Steadier than the market

52W Range Position

47%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1255.4 / 1285.9

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

68.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1.01 L Cr	₹1.10 L Cr	₹1.17 L Cr	₹1.30 L Cr	+8.7%
EBITDA	₹23,546 Cr	₹25,528 Cr	₹27,213 Cr	₹28,114 Cr	+6.1%
EBITDA Margin	23.2%	23.2%	23.2%	21.6%	—
PAT (Net Profit)	₹14,851 Cr	₹15,702 Cr	₹17,390 Cr	₹16,642 Cr	+3.9%
EPS	₹54.79	₹57.86	₹64.09	₹61.36	+3.8%
ROE	22.7%	23.0%	25.0%	22.1%	—
ROCE	27.6%	27.9%	30.8%	27.2%	—
Total Debt	₹4,786 Cr	₹5,756 Cr	₹6,279 Cr	₹5,215 Cr	+2.9%
Free Cash Flow	₹16,348 Cr	₹21,400 Cr	₹21,153 Cr	₹18,553 Cr	+4.3%

🟢 Revenue has grown at 8.7% a year over 3 years.

🟢 EBITDA has grown at 6.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 23.2% to 21.6% over 3 years (-1.6 pts).

🟢 PAT (Net Profit) has grown at 3.9% a year over 3 years.

🟢 EPS has grown at 3.8% a year over 3 years.

🟡 ROE has held roughly flat at 22.1% over 3 years.

🟡 ROCE has held roughly flat at 27.2% over 3 years.

🔴 Total Debt has grown at 2.9% a year over 3 years.

🟢 Free Cash Flow has grown at 4.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1.16 L Cr

Total Liabilities

₹41,061 Cr

Total Debt

₹5,215 Cr

Cash & Equivalents

₹8,212 Cr

Operating Cash Flow

₹19,975 Cr

Capex

-₹1,422 Cr

Shareholding (proxy)

Institutional Holding

28.2%

Insider Holding

62.8%

Corporate Actions

Next Earnings

11 Jan 2027

Dividend Rate

₹48

Ex-Dividend Date

16 Oct 2026

Analyst Consensus

Recommendations

14 Buy · 16 Hold · 9 Sell

Target Price (Mean)

₹1,269.69

-8.0% vs CMP

Target Range

₹1,050 – ₹1,530

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
WIPRO LTD	14.5x	15.9%
TECH MAHINDRA LIMITED	28.8x	19.2%

Recent News

4 mixed2 general

HCL Technologies Share Price rises 2.18%; valuation view

Univest, 15 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

HCL Tech Share Price Target 2026 — PL Maintains Neutral Stance at 1,230

Alice Blue, 13 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

IT shares trade mixed post Accenture earnings; HCL Tech, Infy down up to 4%

Business Standard, 05 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Nifty IT Jumps 5% - What Triggered Rally In HCL Tech, TCS And Other IT Stocks

Outlook Money, 13 Oct

Top stocks in focus tomorrow: Investors must watch HCL Tech, RBL Bank, Azad Engineering shares on Tue, 13 Oct | Triggers

Livemint, 12 Oct

HCL Technologies Limited Stock 12‑Month Price Target Raised to INR 1273.53, Implies 4% Upside

TradingView, 13 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong15.4/20

🟢Financial HealthStrong13.9/20

🟡GrowthModest9.5/20

🟢ProfitabilityStrong13.1/15

🟢ValuationAttractive9.9/15

🟢RiskLow6.9/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 20%21.6%
✓Revenue growth stays above 6% a year8.7% CAGR
✓Free cash flow remains positive₹18,553 Cr
✓Debt / EBITDA stays below 2x0.2x
✓ROCE stays above 24%27.2%