HCL Technologies Limited (HCLTech) has released its financial results for Q1, revealing a mixed performance with revenue growth but a decline in profitability.

Revenue Growth

HCLTech reported consolidated revenue of ₹30,349.00 crore for Q1, marking an 8.00% rise year-on-year (YoY). This represents a slight increase from the previously reported 0.30% quarter-on-quarter (QoQ) growth.

Profitability Decline

Despite revenue growth, HCLTech experienced a decline in profitability:

• Net Income was ₹3,843.00 crore, decreasing 10.00% YoY.

Dividend

The Board of Directors declared an interim dividend of ₹12.00 per share.

Future Outlook

HCLTech has set its revenue growth guidance at 3.00-5.00% YoY in constant currency. The company expects its EBIT margin to be between 17.00-18.00%.

Conclusion

While HCLTech demonstrated revenue growth in Q1, the decline in profitability highlights challenges in maintaining margins. The company's revised guidance and dividend declaration indicate its efforts to balance growth initiatives with shareholder returns. Investors will be watching closely to see how HCLTech navigates the evolving technology landscape and manages its profitability in the coming quarters.

HCL Technologies Limited (HCLTech) has announced its financial results for the first quarter of fiscal year 2026, showcasing steady growth amidst challenges in specific sectors. The company reported a consolidated revenue of ₹30,349.00 crores for Q1 FY2026, representing a year-on-year growth of 8.20% in Indian Rupees and 3.70% in constant currency.

Financial Highlights

Segment Performance

HCLTech's IT and Business Services segment led the revenue contribution with ₹22,454.00 crores, followed by Engineering and R&D services at ₹5,174.00 crores, and HCL Software at ₹2,721.00 crores.

Sector-specific Challenges

An executive from HCLTech has noted weakness in the manufacturing and healthcare sectors, attributing this to tariffs. While specific details about the extent of the weakness or the nature of the tariffs were not provided, this observation highlights potential challenges in these key verticals.

Management Commentary

C Vijayakumar, CEO & Managing Director of HCLTech, stated, "We had healthy revenue growth of 3.70% YoY supported by good performance in our Services business with 4.50% YoY growth in constant currency. Our operating margin came at 16.30%, impacted by lower utilization and additional Gen AI and GTM investments."

He added, "Our AI propositions are resonating well with our clients and have been augmented further by our partnership with Open AI. Our pipeline continues to grow as the demand environment was stable during the quarter."

Dividend Declaration

The Board of Directors has declared an interim dividend of ₹12.00 per equity share for the financial year 2025-26, maintaining its track record of consistent shareholder returns.

Future Outlook

Despite the noted challenges in specific sectors, HCLTech remains optimistic about its growth prospects. The company's focus on AI-led solutions and strategic partnerships positions it well to navigate the evolving market landscape.

HCLTech's ability to maintain growth in a challenging environment, coupled with its strategic investments in emerging technologies, suggests a cautiously optimistic outlook for the remainder of the fiscal year. However, the company will need to closely monitor and address the weaknesses observed in the manufacturing and healthcare sectors to ensure sustained performance across all verticals.