HCL Technologies delivered mixed Q3 results, with revenue growth offset by profitability pressures from regulatory provisions. The IT services major reported sequential revenue growth of 6% while facing headwinds from new labour code implementations that impacted bottom-line performance.

Financial Performance Overview

The company's Q3 financial metrics reflect both operational strength and regulatory compliance costs:

Revenue performance exceeded market expectations, coming in above the estimated ₹33,360 crore. However, net profit of ₹4,076 crore fell short of the polled estimate of ₹4,747 crore, primarily due to the substantial one-time labour code provision.

Labour Code Impact and Future Outlook

CEO and Managing Director C Vijayakumar addressed the labour code implications, stating the total impact stands at $109 million as a one-time cost arising from obligations mandated under the new regulations. The company has already incorporated the required provisions as part of the quarter's financial adjustments and does not anticipate further incremental costs, although some regulatory guidelines remain pending.

Looking ahead, HCL Technologies expects minimal ongoing costs from the labour code implementation, projecting an impact in the range of 10 to 20 basis points on future operations.

Workforce Expansion and Fresher Hiring

The company demonstrated strong commitment to talent acquisition, particularly in the fresher segment:

Despite a marginal net decline of 261 employees quarter-on-quarter, the company's total workforce remained relatively stable at 2,26,379. The significant increase in fresher hiring aligns with HCL Technologies' earlier guidance about substantially higher graduate recruitment this fiscal year.

Dividend Distribution

The board declared an interim dividend of ₹12 per share for the quarter, with key dates as follows:

• Record Date: January 16, 2026
• Payment Date: January 27, 2026
• 12-month Total Payout: ₹54 per share
• Distribution Ratio: 88.8% of net income

This dividend declaration maintains the company's robust shareholder return policy, representing an effective distribution of nearly 90% of net income over the trailing twelve months.

Market Performance

HCL Technologies shares closed at ₹1,667 on NSE ahead of the results announcement, registering a modest gain of 0.34%. The mixed quarterly performance, combining revenue growth with profit pressures from regulatory compliance, reflects the broader challenges facing the IT services sector as companies navigate evolving regulatory landscapes while maintaining operational momentum.

HCL Technologies has demonstrated solid financial performance by achieving a 4.8% yearly revenue growth in constant currency, successfully exceeding its guidance range of 3-5%. This performance milestone highlights the company's strong operational execution and effective market strategy implementation.

Financial Performance Overview

The IT services major's revenue growth of 4.8% in constant currency terms represents a significant achievement, particularly as it surpasses the upper end of the company's projected guidance range. This performance indicates robust business momentum and effective client relationship management.

Strategic Implications

The company's ability to outperform its own revenue projections demonstrates strong operational capabilities and market positioning. By exceeding the 3-5% guidance range, HCL Technologies has shown resilience and growth potential in the competitive IT services landscape.

This performance reflects the company's successful execution of its business strategy and its ability to deliver consistent value to clients across various service segments. The constant currency growth metric provides a clear view of the company's underlying business performance, excluding the impact of foreign exchange fluctuations.

Market Position

The revenue growth achievement positions HCL Technologies favorably within the IT services sector, showcasing its capacity to generate sustainable growth while maintaining operational efficiency. The company's performance above its guidance range indicates strong demand for its services and effective business development initiatives.