HCLTech Shares Surge: Analysts Raise Targets Post-Q3, But Valuations Cap Upside

• HCLTech reported strong Q3 performance with 4.2% constant-currency revenue growth, exceeding estimates.
• Adjusted EBIT margin reached 18.6%, surpassing expectations despite a ₹956 crore one-time impact from new labour codes.
• The company raised its FY26 revenue growth guidance to 4-4.5% and services revenue guidance to 4.75-5.25%.
• Advanced AI revenue grew 19.9% QoQ to $146 million, indicating a shift towards AI-led client spending.
• Brokerages like Morgan Stanley, Macquarie, and Nomura raised price targets, but some caution on valuation limits upside.

Why It Matters: HCLTech's strong Q3 performance and raised guidance impress analysts, but high valuations limit further upside.