India's IT giant HCLTech has forecast revenue growth of 1% to 4% for fiscal year 2027, a projection below analyst expectations. This cautious outlook stems from clients significantly curtailing discretionary spending. The company's CEO, C Vijayakumar, noted a challenging business environment and cited specific project scale-downs in the Americas region, estimating a 0.5% impact on annual growth. The U.S. market constitutes over half of HCLTech's total revenue.
Analysts characterize the forecast and recent deal wins as disappointing, attributing the slowdown to industry-wide issues rather than company-specific problems. HCLTech's new bookings for the quarter stood at $1.94 billion, the lowest in three quarters. This comes as larger rival Tata Consultancy Services reported a rare annual revenue decline, and Wipro missed earnings estimates, both pointing to geopolitical and policy disruptions.
In the January-March quarter, HCLTech's consolidated revenue increased by a lower-than-expected 12.3% to 339.81 billion rupees ($3.63 billion). Net profit saw a 4.3% rise to 44.88 billion rupees. The company's performance was impacted by a 2.9% decline in its Europe business and an 8.6% slump in its telecom vertical. However, advanced AI revenue experienced a four-fold increase on an annualized basis, reaching $620 million.