TLDR: HCLTech announced a 9.7% year-on-year decline in consolidated net profit to ₹3,843 crore for Q1 FY26, despite an 8.2% rise in revenue to ₹30,349 crore. The company attributed the profit dip to lower utilization, increased investments in Gen AI, and the impact of a client bankruptcy. Concurrently, HCLTech emphasized its strategic focus on Artificial Intelligence, highlighting its robust AI propositions and an augmented partnership with OpenAI, while adjusting its FY26 revenue growth guidance to 3.0-5.0% in constant currency.
HCLTech, India’s third-largest IT services firm by market capitalization, reported its financial results for the first quarter of fiscal year 2026 (Q1 FY26) on Monday, July 14, 2025. The company’s consolidated net profit after tax (PAT) saw a notable decline of 9.7% year-on-year (YoY), settling at ₹3,843 crore, down from ₹4,257 crore in Q1 FY25. Sequentially, the profit fell by 10.7%.
Despite the dip in profitability, HCLTech’s revenue from operations demonstrated resilience, increasing by 8.2% YoY to ₹30,349 crore, compared to ₹28,057 crore in the corresponding quarter of the previous fiscal year. In constant currency (CC) terms, revenue grew by 3.7% YoY, while USD revenue stood at $3,545 million, up 5.4% YoY. The company also highlighted that its consolidated revenue on a Last Twelve Months (LTM) basis has surpassed $14 billion.
The decline in operating margin was attributed to several factors. C Vijayakumar, CEO & Managing Director of HCLTech, stated, “Our operating margin came at 16.3%, impacted by lower utilization and additional Gen AI and GTM investments.” Shiv Walia, Chief Financial Officer, further elaborated that the EBIT for the quarter was ₹4,942 crore, representing 16.3% of revenue, which increased 3.1% YoY. However, the EBIT margin for the quarter slipped from 17.1% in Q1 FY25. The management also indicated that Q1 margins were impacted by 20 basis points due to a key client facing bankruptcy, and two large deals expected to close in Q1 were delayed due to procedural reasons, now anticipated to conclude in July and reflect in Q2 TCV.
Amidst these financial shifts, HCLTech underscored its strategic commitment to Artificial Intelligence. Roshni Nadar Malhotra, Chairperson of HCLTech, emphasized, “AI has become integral to the business growth of global enterprises. HCLTech’s capabilities and strategic partnerships ensure our AI-led solutions are practical, comprehensive and significant value creators to our clients. We also remain intensely focused on the ethical deployment of AI and maximizing its positive social impact.” C Vijayakumar added, “Our AI propositions are resonating well with our clients and have been augmented further by our partnership with OpenAI.” The company is also investing in an AI-driven data lifecycle management platform.
For FY26, HCLTech has slightly adjusted its revenue growth guidance, now projecting it to be between 3.0% and 5.0% YoY in constant currency, an upward revision from the initial 2-5% range. Services revenue growth is also expected to be in the 3.0-5.0% YoY CC range, with an EBIT margin forecast between 17.0% and 18.0%.
In terms of new business, the Total Contract Value (TCV) from new deal wins in Q1 FY26 was $1,812 million, a 7.5% decrease from $1,960 million in Q1 FY25. The company’s total headcount at the end of the quarter stood at 223,151, a sequential decrease of 269, though 1,984 freshers were added. The LTM attrition rate remained stable at 12.8%.
In a gesture to shareholders, HCLTech announced an interim dividend of ₹12 per equity share for the financial year 2025-26, with the record date set for July 18, 2025, and payment by July 28, 2025.
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HCLTech also received notable recognitions, being positioned as ‘Customer’s Choice’ in all six Gartner Voice of Customer Quadrant evaluations related to IT services and recognized as one of the ‘World’s Most Sustainable Companies of 2025’ by Times and Statista. The management expressed confidence in the stable demand environment and the company’s strong positioning to capitalize on the AI era.
