HCL Technologies Limited announced its Q3FY26 financial results for the quarter ended December 31, 2025, demonstrating strong revenue growth despite facing regulatory headwinds that impacted profitability. The IT services major reported mixed performance with robust top-line expansion offset by one-time regulatory costs.

Financial Performance Overview

The company delivered solid revenue growth across its operations during the third quarter. Consolidated revenue from operations reached ₹33,872 crores, marking a significant 13.3% year-over-year increase from ₹29,890 crores in Q3FY25. Sequential growth was also strong at 6.0% compared to ₹31,942 crores in Q2FY26.

Impact of New Labour Codes

The quarter's profitability was significantly affected by regulatory changes implemented by the Government of India. Effective November 21, 2025, new Labour Codes consolidated multiple existing labour legislations into a unified framework. This resulted in a one-time exceptional charge of ₹956 crores for the consolidated entity and ₹948 crores for the standalone company, recognized as employee benefit expenses under Ind AS 19 requirements.

Without this exceptional item, profit before tax would have been ₹6,465 crores compared to the reported ₹5,509 crores. The company noted that the government is still in the process of notifying related rules, and any future impacts will be evaluated and accounted for when notified.

Segment-wise Performance

All three business segments demonstrated strong growth momentum during the quarter:

The Engineering and R&D services segment led growth with an 18.3% year-over-year increase, while HCL Software showed strong recovery with 30.6% sequential growth from ₹2,826 crores in Q2FY26.

Strategic Acquisitions Announced

HCL Technologies announced two significant acquisitions to strengthen its market position:

Telco Solutions Business Acquisition: On December 18, 2025, the company signed a definitive agreement to acquire the Telco Solutions Business from Hewlett Packard Enterprise for ₹1,438 crores ($160 million), including ₹135 crores ($15 million) in performance-based incentives. This acquisition will enhance the company's Engineering and AI-led Network propositions for Global Communication Service Providers.

Jaspersoft Acquisition: On December 22, 2025, HCL signed an agreement to acquire Jaspersoft, a business unit of Cloud Software Group, for ₹2,157 crores ($240 million). Jaspersoft provides embedded analytics and reporting platforms, bringing a comprehensive business intelligence platform and global developer community to HCL's portfolio.

Both transactions are subject to regulatory approvals and customary closing conditions, with completion expected within six months.

Dividend Declaration and Nine-Month Performance

The Board of Directors declared an interim dividend of ₹12.00 per equity share of ₹2 each for FY2025-26. The record date is set for January 16, 2026, with payment scheduled for January 27, 2026.

For the nine months ended December 31, 2025, consolidated revenue reached ₹96,163 crores, up 10.8% from ₹86,809 crores in the corresponding period of FY25. Nine-month net profit attributable to owners was ₹12,154 crores compared to ₹13,083 crores in the previous year, reflecting the impact of the one-time Labour Code charges.

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.