Motilal Oswal has issued a 'Buy' rating on HCL Technologies with a revised target price of ₹1,450 in its research report dated July 13, 2026, representing a significant increase from previous valuations. The brokerage's optimism is based on 18x FY28E EPS valuation, up from their earlier 16x multiple. According to Motilal Oswal, the company maintains its position as the preferred pick in the large cap space, with the revised target price reflecting confidence in HCL Tech's growth trajectory and strategic positioning. As per MOFSL analyst Abhishek Pathak, HCL is investing ahead of the market to build the next-generation AI stack, moving early to create the infrastructure and capabilities required for the next phase of AI adoption.
HCL Technologies is investing up to ₹3,500 crore in AI data centres to build a full-stack AI ecosystem spanning infrastructure, compute and managed services. According to CEO C. Vijayakumar, the company is betting that owning everything from infrastructure and compute to models and managed services will produce more value than merely renting space and power. The initial investment will create only a fraction of the proposed 50-megawatt capacity, with subsequent spending dependent on scale, cash flow generation and returns. The company plans to combine data centre infrastructure, compute, models, software and managed services to offer sovereign cloud, secure AI and managed AI infrastructure, believing such an integrated model can generate more enterprise value per megawatt than conventional colocation businesses.
HCL Technologies reported Q1FY27 revenue of USD 3.6 billion, which declined 0.5% QoQ in constant currency, performing better than Motilal Oswal's estimate of 1.4% QoQ decline. The company's EBIT margin came in at 16.9%, in line with estimates, while revenue/EBIT/adjusted PAT grew 13.9%/18%/20.3% YoY in INR terms respectively. For the quarter, new deal TCV was USD 2.4 billion, up 32.8% YoY, demonstrating strong deal momentum despite market challenges. The company maintained its FY27 revenue growth guidance at 1-4% YoY in constant currency, with services revenue growth guidance of 1.5% and 4.5% YoY in constant currency.
ICICI Securities has downgraded HCL Technologies to a Reduce rating with a revised target price of ₹1,060 in its research report dated July 14, 2026. According to the brokerage's analysis, the target price is based on 15x FY28E P/E for the services business and 10x for the products business, representing an increase from their earlier valuations of 13x and 9x respectively. This downgrade reflects broader analyst concerns about the company's growth prospects and premium valuation relative to peers. The market sentiment remains divided, with Citi maintaining a 'Sell' rating and lowering its target price to ₹1,040 from ₹1,135, while HSBC retained its 'Buy' rating with an unchanged target price of ₹1,255.
CEO Vijayakumar expects global data centre demand to triple by 2030, with AI accounting for roughly 70% of that growth. He believes India could expand even faster due to supply constraints and rising sovereign-data requirements. The company is taking a disciplined approach to capital deployment, with management stating they will have a very disciplined approach to increasing investments based on the free cash flow that is getting generated from the business. Potential financing structures include partnerships with silicon and original-equipment manufacturers, committed-capacity agreements with clients, and consumption models where hardware is financed against contracted demand. The investment will not come at the cost of HCLTech's stated shareholder payout policy, with management emphasizing this is not a colo business but a full-stack play.
