HCL Technologies (HCLTech) has reported robust financial results for the second quarter, marked by significant growth in revenue and profitability, along with a milestone achievement in its artificial intelligence (AI) business.

Revenue Growth and Profitability

HCLTech posted consolidated revenue of ₹31,942.00 crores for Q2, representing a 5.20% quarter-on-quarter (QoQ) increase and a 10.70% year-on-year (YoY) growth. In constant currency terms, the company's revenue grew by 2.40% QoQ and 4.60% YoY.

The company's EBIT (Earnings Before Interest and Taxes) stood at ₹5,550.00 crores, with an EBIT margin of 17.40%. This marks a significant improvement from the previous quarter, with EBIT growing by 12.30% QoQ. The net income for the quarter was ₹4,235.00 crores, up 10.20% QoQ.

AI Business Milestone

A standout achievement for HCLTech this quarter was its Advanced AI business exceeding $100 million in revenue. This makes HCLTech the first Indian IT services company to report standalone AI revenue, showcasing its growing capabilities in this cutting-edge technology domain.

Services Performance

HCLTech's Services business, which includes IT and Business Services and Engineering and R&D services, demonstrated strong growth. The Services revenue increased by 2.50% QoQ and 5.50% YoY in constant currency terms. Notably, the company's digital revenue grew by 15.00% YoY, now contributing 42.00% of the Services revenue.

Segment-wise Performance

New Bookings and Client Acquisition

HCLTech reported strong momentum in new deal wins, with Total Contract Value (TCV) reaching $2,569.00 million, up 41.80% QoQ and 15.80% YoY. This marks the first time the company's new bookings have surpassed $2.5 billion in a quarter without relying on any mega-deal.

Workforce and Attrition

The company added 3,489 employees during the quarter, bringing its total headcount to 226,640. HCLTech's focus on talent acquisition is evident with the addition of 5,196 freshers. The Last Twelve Months (LTM) attrition rate improved to 12.60%, down from 12.90% in the same quarter last year.

Dividend Declaration

The Board of Directors has declared an interim dividend of ₹12.00 per equity share, maintaining its consistent dividend payout record for the 91st consecutive quarter.

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

HCLTech has maintained its EBIT margin guidance at 17.00% - 18.00%. The company expects its revenue growth to be between 3.00% - 5.00% YoY in constant currency, with Services revenue growth projected between 4.00% - 5.00% YoY.

As HCLTech continues to invest in new technologies and capabilities, particularly in AI, the company appears well-positioned to capitalize on the growing demand for digital transformation services in the global IT market.

HCL Technologies Limited (HCLTech) has announced its financial results for the second quarter, showcasing robust growth and performance across key metrics. The company has also revealed plans for salary increases and a shift in its US hiring strategy.

Revenue Growth and Financial Highlights

HCLTech reported consolidated revenue of $3,644.00 million for Q2, marking a 5.8% year-on-year (YoY) increase and a 2.8% quarter-on-quarter (QoQ) growth. In constant currency terms, the company achieved a 4.6% YoY and 2.4% QoQ revenue growth.

The company's EBIT (Earnings Before Interest and Taxes) stood at $637.00 million, representing 17.5% of revenue. This includes a 55 basis points impact from restructuring costs. Net income for the quarter was $486.00 million, translating to 13.3% of revenue.

Segment Performance

HCLTech's services segment, comprising IT and Business Services and Engineering and R&D Services, demonstrated strong growth:

• IT and Business Services revenue grew 3.8% YoY in constant currency
• Engineering and R&D Services revenue increased by 13.4% YoY in constant currency
• The combined services segment achieved a 5.5% YoY growth in constant currency

The HCLSoftware segment reported a slight decline of 3.7% YoY in constant currency.

Strategic Developments and AI Initiatives

CEO & Managing Director C Vijayakumar highlighted the company's focus on AI-powered solutions, stating, "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."

HCLTech's AI initiatives have gained significant traction, with the company reporting:

• Advanced AI quarterly revenue crossing $100.00 million
• Digital revenue growing 15.0% YoY, now contributing 42.0% of Services revenue

HCL Tech executives indicated that they are seeking a similar environment as the previous quarter, while noting that pipeline and bookings have grown. The company observed spending on discretionary items in some areas, primarily focused on AI initiatives. Advanced AI revenue currently represents approximately 3% of HCLTech's overall revenue.

Client Acquisition and Bookings

The company reported strong momentum in new deal wins:

• Total Contract Value (TCV) of new deal wins reached $2,569.00 million, up 41.8% QoQ and 15.8% YoY
• Added 3 clients in the $20M+ category and 1 client in the $10M+ category on a Year-to-Date basis

Workforce and Attrition

HCLTech continued to strengthen its workforce:

• Total employee count stood at 226,640, with a net addition of 3,489 during the quarter
• 5,196 freshers were added in Q2
• LTM attrition rate improved to 12.6%, down from 12.9% in Q2 of the previous year

Salary Increases and US Hiring Strategy

HCLTech has announced salary increases for employees starting in October. In a significant shift, the company has reduced its dependence on H-1B visas in the US market. Instead, HCLTech plans to increase local hiring and implement training programs to enhance localization efforts in its US operations.

Dividend Declaration

The Board of Directors has declared an interim dividend of ₹12.00 per equity share.

Future Outlook

HCLTech has provided the following guidance:

HCLTech's strong Q2 performance, coupled with its focus on AI-driven solutions, strategic client acquisitions, and the new initiatives in employee compensation and US hiring strategy, positions the company well for continued growth in the evolving technology landscape.