HCLTech Q1 FY27 highlights:
- Net income increased 20.3% to ₹4,624 crore.
- Revenue rose 13.9% to ₹34,579 crore.
- Constant-currency revenue grew 2.6% year-on-year.
- EBIT margin expanded to 16.9%.
- New deal wins reached a record $2.407 billion.
- Advanced AI revenue increased 62.1% to $171 million.
- Total employee headcount fell by 3,292 to 223,889.
- The board announced an interim dividend of ₹12 per share.
- HCLTech retained its FY27 constant-currency revenue guidance of 1%–4%.
- The company plans to invest up to ₹3,500 crore in AI data centres.
HCLTech reported a stronger-than-expected financial performance for the first quarter ending June 30th, 2026 of FY2026-27, supported by growth in financial services, retail, public services and artificial intelligence-led engagements. However, the company’s decision to retain its conservative full-year guidance raised concerns over the pace of recovery in global technology spending.
The Noida-headquartered technology major posted consolidated net income of ₹4,624 crore for the quarter ended June 30, 2026, representing an increase of 20.3% year-on-year from ₹3,843 crore. Profit was also 3% higher sequentially than the ₹4,488 crore reported in the March quarter.
Revenue from operations increased 13.9% year-on-year to ₹34,579 crore, compared with ₹30,349 crore in Q1 FY26. On a sequential basis, revenue rose 1.8% from ₹33,981 crore.
In US-dollar terms, revenue stood at $3.65 billion, declining 0.9% sequentially but increasing 3% year-on-year. Revenue in constant-currency terms—which removes the impact of exchange-rate movements—fell 0.5% quarter-on-quarter while growing 2.6% year-on-year. The difference between rupee and constant-currency growth indicates that depreciation of the Indian currency provided a significant translation benefit to the company’s reported revenue.
HCLTech beats Street estimates
HCLTech’s reported revenue exceeded that estimate by about ₹253 crore, while net profit came in nearly ₹95 crore above expectations.
| Financial Indicator | Q1 FY27 | Sequential change | Year-on-year change |
|---|---|---|---|
| Revenue | ₹34,579 crore | Up 1.8% | Up 13.9% |
| Net Income | ₹4,624 crore | Up 3% | Up 20.3% |
| EBIT | Approximately ₹5,831 crore | Up 3.8% | Up 18% |
| EBIT margin | 16.9% | Up 39 bps | Up 56 bps |
| Advanced AI revenue | $171 million | Up 10.6% in CC | Up 62.1% in CC |
Operating margin expands despite restructuring expenses
HCLTech’s earnings before interest and tax, or EBIT, stood at approximately ₹5,831 crore, registering growth of about 18% year-on-year. EBIT margin improved to 16.9%, expanding by 39 basis points sequentially and 56 basis points from the year-ago period.
The margin improvement came despite restructuring expenses that affected the reported EBIT margin by approximately 62 basis points and the net-income margin by 47 basis points.
Excluding restructuring costs, HCLTech said its EBIT margin would have been 17.5%, while the adjusted net-income margin would have stood at 13.8%. The reported net-income margin was 13.4%.
Chief Financial Officer Shiv Walia said the company continued to deliver steady growth and improve profitability despite restructuring expenses. HCLTech’s operating cash flow-to-net income ratio stood at 111%, while free cash flow as a proportion of net income was 99% on a last-12-month basis.
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Record $2.4-billion deal bookings
HCLTech reported new deal wins with a total contract value of $2.407 billion, its highest-ever booking figure for a first quarter. This compared with deal wins of approximately $1.94 billion in the preceding March quarter.
Chief Executive Officer and Managing Director C Vijayakumar said the record bookings and rapid growth of the Advanced AI business demonstrated that enterprises were selecting HCLTech to lead AI-driven transformation programmes.
The major AI-related engagements announced during the quarter included:
- An incremental engagement worth more than $180 million from a global technology company for an AI Factory programme and AI data-centre buildout.
- An AI engineering engagement with a US semiconductor company to develop an AI-enabled chip for next-generation vehicles.
- An autonomous robotics project for a European manufacturer involving navigation logic, motion planning and system integration.
- An AI-led site reliability engineering transformation programme for a European automobile manufacturer.
- An AI-driven semiconductor engineering and manufacturing engagement with a Fortune 250 equipment manufacturer.
HCLSoftware also secured one of the largest transactions in its history, involving the deployment of Actian Ingres to support logistics applications used by a public-sector organisation
Advanced AI revenue surges 62%
Advanced AI emerged as one of the strongest growth areas for HCLTech. Revenue from the business reached $171 million, increasing 10.6% sequentially and 62.1% year-on-year in constant currency.
The figure translates into an annualised revenue run rate of approximately $684 million, although quarterly performance may vary.
HCLSoftware’s annual recurring revenue stood at $1.06 billion, representing constant-currency growth of 2% year-on-year. Revenue per employee increased 3.3% from the previous year to $65,500 per annum, reflecting the company’s focus on productivity, automation and capital efficiency.
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IT and Business Services lead segment performance
IT and Business Services remained HCLTech’s largest operating segment, generating revenue of approximately ₹26,049 crore, or more than 75% of the company’s total quarterly revenue. The segment recorded constant-currency growth of 4.2% year-on-year.
Engineering and Research and Development Services generated approximately ₹5,690 crore and grew 0.3% year-on-year in constant currency.
HCLSoftware contributed around ₹2,840 crore. However, the segment’s revenue declined 5.3% year-on-year in constant currency, highlighting continuing softness in parts of the software-products portfolio.
HCL Workforce falls by 3,292 employees
HCLTech ended the June quarter with 223,889 employees, down by 3,292 employees from 227,181 at the end of March 2026. It was the company’s sharpest sequential workforce reduction in eight quarters.
Despite the overall reduction, HCLTech recruited 1,056 freshers during the quarter. Women represented 29.6% of the workforce.
The company’s last-12-month attrition rate increased marginally to 12.7%, compared with 12.5% in the March quarter, but remained below the 12.8% recorded in the corresponding period of the previous year.
₹3,500-crore investment in AI data centres
Alongside the quarterly results, HCLTech announced plans to invest up to ₹3,500 crore, or approximately $370 million, to establish AI data centres.
The proposed infrastructure could eventually scale to 50 megawatts of capacity. HCLTech intends to combine this capacity with its existing capabilities in AI data-centre design, DevOps, cloud operations and software to provide an integrated, end-to-end AI technology offering.
FY27 guidance remains unchanged
Despite the better-than-expected quarterly performance and record bookings, HCLTech retained its FY27 guidance.
The company expects:
- Overall revenue growth of 1% to 4% year-on-year in constant currency.
- Services revenue growth of 1.5% to 4.5% in constant currency.
- EBIT margin of 17.5% to 18.5%.
HCLTech shares decline after results
HCLTech shares fell as much as 3.2% in early trading on July 14, a day after the results were announced. The stock later reduced some of its losses but remained around 2.3% lower, becoming one of the biggest drags on the Nifty IT index.
The decline came despite the earnings beat, as investors focused on the unchanged FY27 revenue guidance. Analysts interpreted the cautious outlook as an indication that discretionary client spending remains fragile and that the recovery in technology demand may be slower than anticipated.
₹12 interim dividend announced
HCLTech’s board declared an interim dividend of ₹12 per equity share with a face value of ₹2. This represents the company’s second interim dividend for FY27 and its 94th consecutive quarterly dividend payout.
The company has fixed July 17, 2026, as the record date for determining eligible shareholders. The dividend is scheduled to be paid on July 27, 2026.
News4Bharat POV
HCLTech’s Q1 results present a mixed but broadly resilient picture. Profitability, deal bookings and AI revenue were stronger than anticipated, while margin expansion demonstrated progress on operational efficiency.
At the same time, the sequential decline in constant-currency revenue, weakness in telecom and HCLSoftware, falling employee numbers and unchanged FY27 guidance underline the continuing challenges facing India’s IT-services industry.
The conversion of HCLTech’s record deal wins into revenue, progress on the $180-million AI Factory engagement, utilisation of the proposed data-centre investment and improvement in discretionary client spending will be among the most closely watched indicators in the coming quarters.
Disclaimer - Financial figures in this report are based on HCLTech’s regulatory disclosures and investor communication. Sequential and year-on-year changes have been stated as reported by the company.
Sources: HCL's website - official press release
