HCL Technologies reported mixed financial results for the third quarter of the current financial year, with net profit declining sequentially due to one-time impact from new labour codes, while revenue demonstrated solid growth momentum.

Financial Performance Overview

The IT services giant posted consolidated net profit of ₹4,082.00 crore in the December quarter, marking a sequential decline from the preceding quarter's performance. The company attributed this decline primarily to one-time impact arising from new labour code implementations.

Revenue Growth Momentum

Despite the profit decline, HCL Technologies demonstrated robust revenue performance with a 6% quarter-on-quarter growth. The company's revenue increased to ₹33,872.00 crore in the December quarter, compared to ₹31,942.00 crore in the preceding quarter, indicating strong business momentum and client demand.

Analyst Expectations vs. Actual Results

The quarterly results fell short of market expectations, with analysts having projected stronger performance across key metrics.

Bloomberg consensus estimates had projected net profit growth of 11% to ₹4,702.00 crore, significantly higher than the actual reported figure.

Dividend Declaration

In a positive development for shareholders, the board declared an interim dividend of ₹12.00 per equity share. The company has established clear timelines for dividend distribution, with the record date set for January 16 and payment scheduled for January 27.

Impact of Labour Code Changes

The sequential decline in net profit was primarily attributed to one-time impact from new labour codes. This regulatory change affected the company's bottom line performance during the quarter, despite strong operational revenue growth indicating healthy underlying business fundamentals.

HCL Technologies , India's third-largest information technology firm by market capitalisation, will announce its third-quarter results for FY26 today (January 12). Despite expectations of a decent performance, the company's shares traded with minor cuts ahead of the results announcement, falling over 1% to ₹1,641.20 on the BSE.

The IT major announced last month that its board will consider the payment of the fourth interim dividend for FY26 alongside the Q3 results announcement.

Analyst Expectations for Q3 Performance

Analysts anticipate steady results from HCL Tech, with the company likely to outperform several industry peers on revenue and net profit growth. This performance is expected despite the seasonally weak period for IT services companies.

Kotak Institutional Equities noted that the ramp-up of large deals won during the quarter and seasonality in the products business would contribute to overall revenue growth. The company's diversified portfolio spanning IT services, engineering and R&D services, and products and platforms is expected to support this performance.

Margin Outlook and Operational Metrics

EBIT margins are expected to see notable improvements across different analyst forecasts:

Seema Srivastava, Senior Research Analyst at SMC Global Securities, highlighted that HCL Tech's diversification will help cushion the impact of volatility in discretionary spending. She noted that EBIT margins may see moderate improvement, aided by stronger performance across the portfolio amid rising demand for cloud, network, security, and digital workplace services.

Strategic Positioning and Growth Drivers

HCL Tech's strong positioning in AI-led transformation and enterprise modernisation engagements is expected to remain a key strategic highlight during the quarter. The company's diversified business model across multiple service lines provides resilience against market volatility.

Key growth areas include:

• Cloud services and digital workplace solutions
• AI-led transformation projects
• Enterprise modernisation engagements
• Engineering and R&D services expansion

Guidance Revisions and Key Monitorables

Kotak Institutional Equities expects the company to narrow its guidance ranges:

Investors will closely monitor management commentary on deal pipeline strength, execution momentum, and evolving client decision-making trends. Performance across core verticals such as financial services, technology, and emerging digital segments will be key focus areas, along with updates on operational discipline and talent management strategies in the challenging macro environment.