NewsEarningsHCL Tech Q3 Results: Net profit drops 11.2% YoY to ₹4,076 crore, revenue rises 13.3%HCL Tech Q3 Results: Net profit drops 11.2% YoY to ₹4,076 crore, revenue rises 13.3%
HCL Technologies reported mixed Q3FY26 results with revenue rising 13.3% YoY to ₹33,872 crore while net profit declined 11.2% to ₹4,076 crore due to ₹956 crore one-time labor code costs. The company achieved strong operational performance with EBIT margins expanding to 18.6% and crossed $15 billion in annualized revenues. Advanced AI services grew 19.9% QoQ with new bookings reaching $3 billion for the quarter.
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HCL Technologies , India's third-largest IT services company, delivered mixed financial results for the quarter ended December (Q3FY26), reporting strong revenue growth alongside a decline in net profit due to one-time regulatory costs.
Financial Performance Overview
The company's financial performance for Q3FY26 showed contrasting trends across key metrics:
| Metric | Q3FY26 | Growth (YoY) | Growth (QoQ) |
|---|---|---|---|
| Revenue | ₹33,872 crore | +13.3% | +6.0% |
| Net Profit | ₹4,076 crore | -11.2% | - |
| EBIT | ₹6,285 crore | +8.0% | - |
| EBIT Margin | 18.6% | - | Expanded from 17.2% |
Revenue performance exceeded expectations, with the company achieving ₹33,872 crore in Q3FY26. In constant currency terms, revenue grew 4.2% quarter-on-quarter and 4.8% year-on-year, while service revenue increased 1.8% QoQ and 5.0% YoY.
Profitability Impact and Operational Metrics
Despite strong top-line growth, net profit declined to ₹4,076 crore from ₹4,591 crore in the previous year, representing an 11.21% decrease. This decline was primarily attributed to a one-time cost of ₹956 crore related to new labor code provisions introduced during the quarter.
On the operational front, HCL Technologies demonstrated improved efficiency with EBIT reaching ₹6,285 crore, marking an 8.0% year-on-year increase. EBIT margins expanded significantly to 18.6% from 17.2% in the September quarter, indicating strong operational recovery.
Advanced AI and Software Segment Growth
The company's strategic focus areas showed remarkable performance during the quarter:
| Segment | Growth (QoQ in CC) | Revenue |
|---|---|---|
| Advanced AI Services | +19.9% | $146 million |
| HCL Software | +28.1% | - |
Advanced AI services emerged as a key growth driver, with revenue surging 19.9% quarter-on-quarter in constant currency terms to reach $146 million. The HCL Software division also demonstrated strong momentum with 28.1% QoQ growth and 3.1% YoY growth in constant currency.
Management Commentary and Business Milestones
C. Vijayakumar, CEO & Managing Director of HCL Tech, highlighted the quarter's achievements: "Another standout quarter on all fronts, with revenue up 4.2% QoQ in constant currency and a strong recovery of operating margins to 18.6%. The robust revenue momentum in the quarter has enabled us to cross $15 billion in annualized revenues."
Key business highlights for the quarter included:
- New bookings reached an exceptional $3 billion
- Crossed the $15 billion annualized revenue milestone
- Services revenue grew 1.8% QoQ in constant currency
- Strong positioning to address evolving AI demands across industries
Vijayakumar further emphasized the company's strategic positioning: "HCL Software revenue grew sharply by 28.1% QoQ and 3.1% YoY in constant currency, supported by seasonality and our Data Intelligence portfolio. We are well positioned to address the evolving AI demands of our clients across industries and service lines."
Historical Stock Returns for HCL Technologies
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.37% | +1.67% | +0.60% | -0.38% | -13.81% | +58.05% |
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