** HCLTech hits record high on Q2 beat-and-raise report before paring gains to 0.1%; IT index flat

** Guidance hike and deal flow declines "do not enthuse on a sharp recovery"; growth should stay below pre-Covid levels, says Ashwin Mehta, head of equity research at Ambit Capital, who keeps "sell" on HCLT

** Still, India's No.3 IT firm's growth will outpace that of market leaders TCS and Infosys , Mehta expects

** Adds, while HCLT's EBIT margins will not rise, contrary to Street expectations, they'll be stable vs declines at TCS, INFY

** Mehta among top 3 rated analysts covering IT firms, per LSEG data

** Mehta's pecking order: Tech Mahindra ('buy') > Cognizant > HCLT > INFY > TCS > Wipro ('sell's)

** Analysts, on avg, rate HCLT 'hold' - LSEG data

** HCLT has gained 27% YTD, fourth-most on 10-member IT index, which is up ~21% YTD

(Reporting by Savio Dsouza)

((savio.dsouza@thomsonreuters.com;))