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.

HCL Technologies (HCLTech) has reported robust financial results for the first quarter, showcasing strong growth driven by its services business and recent deals in the financial services sector.

Financial Highlights

HCLTech's consolidated revenue for Q1 reached ₹30,349.00 crores, marking an 8.2% year-over-year increase. In constant currency terms, the company's revenue grew by 3.7% compared to the same quarter last year. The services business, which includes IT and Business Services and Engineering and R&D services, demonstrated particularly strong performance with a 4.5% year-over-year growth in constant currency.

Profitability and Margins

While revenue growth was impressive, the company's profitability metrics showed some pressure:

• EBIT (Earnings Before Interest and Taxes) stood at ₹4,942.00 crores, representing 16.3% of revenue. This marks a 9.2% decrease quarter-over-quarter but a 3.1% increase year-over-year.
• Net Income reached ₹3,843.00 crores, accounting for 12.7% of revenue. This reflects a 10.8% decline quarter-over-quarter and a 9.7% decrease year-over-year.

Segment Performance

The Engineering and R&D Services segment showed particularly strong growth, while the HCL Software segment experienced a slight decline.

Financial Services Growth and Restructuring

HCLTech executives reported strong growth in the financial services sector, attributing this success to recent deals and benefits from vendor consolidation. The company's focus on this sector appears to be paying off, with financial services now accounting for 21.6% of the services revenue, up from 21.1% in the previous quarter.

Additionally, HCLTech announced plans to implement a restructuring program in the current fiscal year. This initiative will affect both personnel and non-personnel areas, potentially aimed at optimizing operations and improving efficiency.

AI and Future Outlook

C. Vijayakumar, CEO & Managing Director of HCLTech, emphasized the company's focus on artificial intelligence, stating, "Our AI propositions are resonating well with our clients and have been augmented further by our partnership with OpenAI." This strategic emphasis on AI capabilities positions HCLTech to capitalize on the growing demand for advanced technology solutions.

Dividend Announcement

The Board of Directors has declared an interim dividend of ₹12.00 per share, marking the 90th consecutive quarter of dividend payout and demonstrating the company's commitment to shareholder returns.

In conclusion, while HCLTech faces some margin pressures, its strong revenue growth, particularly in services and financial sector engagements, along with its focus on AI-driven solutions, positions the company well for future growth in the evolving technology landscape.