HCLTech Reports Strong Q2 Performance with 5.8% YoY Revenue Growth
HCLTech announced Q2 consolidated revenue of $3,644 million, up 5.8% YoY. EBIT stood at $637 million (17.5% of revenue), and net income reached $486 million. New deal TCV hit $2,569 million, up 41.8% QoQ. The company reported 22 $100M+ clients and added 3,489 employees. Advanced AI revenue exceeded $100 million, with digital revenue growing 15% YoY. HCLTech declared an interim dividend of ₹12 per share and provided FY guidance of 3-5% YoY revenue growth.
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HCL Technologies Limited (HCLTech) has announced robust financial results for the second quarter, demonstrating solid growth and profitability amid a dynamic business environment.
Revenue Growth
HCLTech reported consolidated revenue of $3,644.00 million for Q2, marking a 5.8% year-over-year (YoY) increase and a 2.8% quarter-over-quarter (QoQ) growth. In constant currency terms, the company achieved a 4.6% YoY and 2.4% QoQ revenue growth.
The IT and Business Services segment, which forms the core of HCLTech's operations, grew by 3.8% YoY in constant currency. The Engineering and R&D Services segment showed impressive growth of 13.4% YoY, while the HCLSoftware segment experienced a slight decline of 3.7% YoY.
Profitability and Margins
HCLTech's EBIT (Earnings Before Interest and Taxes) for Q2 stood at $637.00 million, representing 17.5% of revenue. This includes a 55 basis points impact from restructuring costs. The company's net income reached $486.00 million, accounting for 13.3% of revenue.
Deal Wins and Client Metrics
The company reported strong momentum in new deal wins, with Total Contract Value (TCV) of new deals reaching $2,569.00 million, up 41.8% QoQ and 15.8% YoY. This performance is particularly noteworthy as it was achieved without relying on any mega-deals.
HCLTech's client base continues to expand, with:
- 22 $100M+ clients
- 54 $50M+ clients
- 151 $20M+ clients
These figures are on a Last Twelve Months (LTM) basis.
Workforce and Attrition
The company's total headcount stood at 226,640 at the end of Q2, with a net addition of 3,489 employees during the quarter. HCLTech added 5,196 freshers in Q2. The Last Twelve Months (LTM) attrition rate improved to 12.6%, down from 12.9% in the same quarter last year.
AI and Digital Initiatives
HCLTech reported strong traction in its AI-powered solutions, with Advanced AI revenue exceeding $100.00 million this quarter. The company's digital revenue grew by 15.0% YoY, contributing 42.0% of Services revenue.
Dividend
The Board of Directors has declared an interim dividend of ₹12.00 per share, marking the 91st consecutive quarter of dividend payout.
Management Commentary
C Vijayakumar, CEO & Managing Director of HCLTech, commented on the results: "A standout quarter on every front — marked by strong execution, growing demand for our AI-powered solutions, and Advanced AI revenue exceeding $100M this quarter. Our revenue grew 2.4% sequentially in constant currency with a strong recovery of operating margin to 17.5%."
Outlook
For the fiscal year, HCLTech has provided guidance for company revenue growth between 3.0% - 5.0% YoY in constant currency. Services revenue growth is expected to be between 4.0% - 5.0% YoY in constant currency. The company anticipates EBIT margin to be between 17.0% - 18.0%.
HCLTech's Q2 results demonstrate the company's resilience and ability to capitalize on the growing demand for AI and digital solutions in the global IT services market. The strong deal pipeline and improving profitability metrics position the company well for continued growth in the coming quarters.
Historical Stock Returns for HCL Technologies
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.90% | -0.62% | +0.32% | +3.35% | -20.43% | +75.93% |
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