HCL Technologies delivered a mixed performance in its Q3 FY26 results announced on January 12, with strong revenue growth tempered by regulatory cost impacts. The IT services company demonstrated resilience in its core operations while navigating new compliance requirements that affected profitability.

Financial Performance Overview

The company's quarterly financial metrics reflected both operational strength and regulatory challenges:

Revenue Growth Exceeds Expectations

HCL Technologies posted revenue of ₹33,872 crore for Q3 FY26, marking a solid 6% sequential increase. This performance surpassed CNBC-TV18's poll estimate of ₹33,360 crore, indicating stronger-than-expected business momentum. The revenue growth demonstrates the company's ability to maintain client engagement and project execution despite market uncertainties.

Profit Impact from Labour Code Provisions

Net profit declined 3.8% quarter-on-quarter to ₹4,076 crore, falling below the polled estimate of ₹4,747 crore. The primary driver of this decline was a substantial one-time cost of ₹956 crore related to new labour code provisions introduced during the quarter. This regulatory impact significantly affected the bottom line, masking the underlying operational performance.

Operational Efficiency Improvements

Despite the profit decline, HCL Technologies showcased strong operational metrics. EBIT reached ₹6,285 crore, surpassing the poll estimate of ₹6,090 crore and representing a robust 14.2% quarter-on-quarter growth. The company's EBIT margins improved significantly to 18.6% from 17.2% in Q2 FY26, highlighting enhanced operational efficiency and cost management capabilities.

Market Performance

HCL Tech shares closed at ₹1,667.00 on the NSE ahead of the results announcement, registering a modest gain of 0.34% for the trading session. The stock performance reflected investor anticipation ahead of the quarterly results disclosure.

HCL Technologies delivered mixed financial results for the December quarter, with the IT services company reporting a decline in profitability despite strong revenue growth. The company's consolidated net profit attributable to owners fell 11% year-on-year, while operational revenue demonstrated robust double-digit expansion.

Financial Performance Overview

The company's Q3 FY26 financial metrics present a contrasting picture of growth and margin pressure:

The profit after tax figure represents earnings attributable to the owners of the company, indicating the core profitability available to shareholders after accounting for all expenses and taxes.

Revenue Growth Momentum

HCL Technologies demonstrated strong top-line performance with revenue from operations reaching ₹33,872.00 crore in Q3 FY26, marking a significant 13% increase from the ₹29,890.00 crore recorded in the corresponding quarter of the previous financial year. This revenue expansion reflects the company's ability to maintain business momentum and client engagement despite challenging market conditions.

Dividend Distribution

The company has announced shareholder returns through an interim dividend declaration for the current financial year:

The interim dividend announcement demonstrates the company's commitment to returning value to shareholders despite the quarterly profit decline. The record date of January 16, 2026, will determine shareholder eligibility, with actual payment scheduled for January 27, 2026.

Market Implications

The quarterly results highlight the complex operating environment facing IT services companies, where revenue growth and profitability pressures can coexist. HCL Technologies' ability to maintain strong revenue expansion while managing cost structures will be crucial for future performance. The dividend declaration signals management confidence in the company's cash generation capabilities and commitment to shareholder returns.