HCLTech’s Q1 FY26: Revenue on the Rise, Profits Pause, AI Powers the Future

Image Source: The Financial Express

HCLTech, India’s third-largest IT services provider, delivered a resilient performance in Q1 FY26, reporting a healthy 3.7% year-on-year revenue growth in constant currency and raising its full-year revenue guidance, even as net profit declined due to higher expenses and a one-off client bankruptcy.

Key Highlights

Revenue Performance:

Consolidated revenue reached ₹30,349 crore, up 8.2% YoY (5.4% in USD terms), surpassing analyst expectations.
Constant currency revenue growth stood at 3.7% YoY, driven by a 4.5% YoY rise in Services revenue.
Digital revenue surged 15.2% YoY (in constant currency), now contributing 41.6% of Services revenue.

Profitability:

Net profit dropped 9.7% YoY to ₹3,843 crore, impacted by increased costs and a client bankruptcy.
EBIT margin came in at 16.3%, affected by lower utilization and strategic investments in GenAI and go-to-market initiatives.
The company maintained its EBIT margin guidance at 17–18% for FY26, down from the earlier 18–19%.

Guidance & Outlook:

FY26 revenue growth guidance raised to 3–5% YoY in constant currency, reflecting confidence in deal pipelines and stable demand.
Management cited strong traction in technology, telecom, retail, and financial services verticals, while auto and manufacturing faced headwinds.

Other Announcements

Interim dividend of ₹12 per share declared; record date July 18, 2025.
Total contract value (TCV) of new deal wins stood at $1.8 billion for the quarter.
Attrition rate stable at 12.8%, with fresh hiring focused on specialized talent.

“Our AI propositions are resonating well with clients and have been augmented by our partnership with OpenAI. The demand environment remained stable overall, and we are optimistic about the coming quarters,” said CEO & MD C Vijayakumar.

Source: Times of India, Financial Express, Reuters, HCLTech Investor Relations