HCL Technologies reported mixed financial results for Q3FY26, with net profit declining despite strong revenue growth. The IT services major's consolidated net profit fell 11% year-on-year to ₹4,076 crore, down from ₹4,591 crore in the corresponding quarter of the previous year.

Financial Performance Overview

The company's financial performance for Q3FY26 showed contrasting trends in profitability and revenue metrics:

Despite the decline in bottom line, HCL Technologies demonstrated robust top-line growth with revenue from operations increasing 13% year-on-year to ₹33,872 crore. On a sequential basis, revenue grew 6% from ₹31,942 crore reported in Q2FY26.

Operational Highlights and Dividend Declaration

HCL Technologies reported strong operational metrics during the quarter. The company achieved net new deal wins totaling approximately $3 billion, representing a significant 44% year-on-year increase. Revenue performance in constant currency terms showed 4.2% sequential growth and 4.8% year-on-year growth, exceeding street estimates.

The company declared an interim dividend of ₹12 per equity share for FY26, with the record date fixed as January 16, 2026, and payment scheduled for January 27, 2026.

Segment-wise Performance

The company's diverse business segments showed varied performance during Q3FY26:

The software segment particularly stood out with a surge of 28% quarter-on-quarter to $425 million, exceeding market expectations. Revenue from Advanced AI reached $146 million, marking 19% sequential growth and highlighting the company's strong positioning in artificial intelligence solutions.

Brokerage Recommendations and Target Prices

Leading brokerages maintain positive outlook on HCL Technologies despite the profit decline:

Nomura maintained its 'buy' rating while raising the target price to ₹1,810. The brokerage noted that HCL Technologies' EBIT margin stood at 18.6%, up 120 basis points quarter-on-quarter but down 90 basis points year-on-year, exceeding consensus estimates of 18.2%.

Market Outlook and Growth Prospects

Brokerages highlighted several positive factors supporting their recommendations. Goldman Sachs noted that the demand environment appears stable to improving, with the BFSI vertical remaining strong and early signs of recovery in other verticals. The firm raised its EBIT estimates for HCL Technologies for FY26-FY28 by up to 3%.

Choice Broking emphasized the company's strong performance driven by rising demand for AI-powered solutions and digital transformation programs. The brokerage expects HCL Technologies' revenue, EBIT, and PAT to grow at a CAGR of 11.5%, 11.8%, and 10.1% respectively over FY25-FY28E. The company has also expanded its AI ecosystem through partnerships including the NVIDIA Physical AI Lab and deeper collaboration with AWS for BFSI-focused AI innovation.

HCL Technologies has announced significant updates to its financial guidance framework during a recent conference call, providing clarity on how the company will structure its future projections.

Guidance Framework Updates

The IT services major has outlined two key changes to its guidance methodology that will impact how investors and analysts interpret future financial projections.

Strategic Approach to Financial Projections

The decision to exclude new acquisitions from guidance reflects HCL Technologies' focus on providing transparent visibility into its organic business performance. This approach allows stakeholders to better understand the company's core operational growth without the variability introduced by acquisition activities. Meanwhile, the inclusion of restructuring costs in margin guidance ensures that investors have a realistic view of operational expenses during transformation periods.

Impact on Stakeholder Communication

These guidance framework modifications demonstrate the company's commitment to enhanced financial transparency and clearer communication with investors. By separating organic growth from acquisition-driven expansion, HCL Technologies aims to provide more predictable and meaningful guidance to the market. The inclusion of restructuring costs in margin calculations offers a more comprehensive view of operational realities during periods of organizational change.

The updated guidance methodology positions HCL Technologies to deliver more accurate and reliable financial projections while maintaining transparency about both growth initiatives and operational adjustments.