HCL Tech Q1 Result: HCL Technologies, India’s third-largest IT company in terms of market capitalisation, reported its June quarter earnings (Q1FY26) on Monday, July 14. The company’s consolidated profit fell almost 10 per cent year-on-year (YoY). Revenue from operations, however, rose 8 per cent YoY.

The IT major slightly tweaked its FY26 guidance, while highlighting the growing clout of AI in business growth.

“AI has become integral to the business growth of global enterprises. HCL Tech’s capabilities and strategic partnerships ensure our AI-led solutions are practical, comprehensive and significant value creators to our clients,” said Roshni Nadar Malhotra, the chairperson of HCL Tech.

“We also remain intensely focused on the ethical deployment of AI and maximising its positive social impact,” said the chairperson.

“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. As the only service provider positioned as ‘customer’s choice’’ in all 6 Gartner Voice of Customer Quadrant evaluations related to IT services, we are well positioned to grow in the AI era,” said C Vijayakumar, CEO & Managing Director, HCL Tech.

HCL Tech Q1 earnings: Key takeaways

Let’s take a look at five key takeaways from HCL Tech’s Q1 results:

1. The key numbers

According to HCL Tech’s exchange filing, its Q1FY26 consolidated profit after tax (PAT) fell 9.7 per cent YoY to ₹3,843 crore compared to ₹4,257 crore in Q1FY25.

Revenue from operations for the quarter rose 8.2 per cent YoY to ₹30,349 crore from ₹28,057 crore in Q1FY25. In constant currency (CC) terms, revenue rose 3.7 per cent YoY.

Revenue in the US dollar stood at $3,545 million, up 5.4 per cent YoY. The company highlighted that its consolidated revenue on an LTM (last twelve months) basis crosses $14 billion.

On the profitability front, the IT player’s EBIT at ₹4,942 crore, which was 16.3 per cent of revenue, increased 3.1 per cent YoY. However, the EBIT margin for the quarter under review slipped to 16.3 per cent from 17.1 per cent YoY.

“HCL Tech’s Q1FY26 INR revenue grew an impressive 8.2 per cent YoY. EBIT for the quarter came in at ₹4,942 crore, and net income (NI) at ₹3,843 crore and at 16.3 per cent and 12.7 per cent of revenue, respectively,” Shiv Walia, Chief Financial Officer of HCL Tech, said.

“Our cash generation remains robust with OCF/NI at 129 per cent and FCF/NI at 121 per cent, reflecting the underlying strength of our business model. Our commitment to capital efficiency has resulted in LTM ROIC improving for the company by 353 bps YoY to 38.1 per cent and for the services business by 236 bps YoY to 45.2 per cent,” Walia said.

2. HCL Tech FY26 guidance

The company now expects its revenue to grow between 3 per cent and 5 per cent year-on-year in constant currency (CC), compared to its earlier estimate of 2 per cent to 5 per cent announced during the Q4 FY25 results.

Services revenue growth is also expected to be between 3 per cent to 5 per cent YoY in CC. EBIT margin may be between 17 per cent to 18 per cent, slightly lower that the earlier estimate of 18 per cent to 19 per cent announced during the Q4 FY25 results.

3. Headcount and attrition

The company’s attrition rate over the last twelve months was 12.8 per cent, the same as the rate in Q1 of last year.

HCL Tech added 1,984 freshers during the quarter compared to 1,078 YoY.

By the end of the June quarter, the company’s total people count was 2,23,151, a decrease of 269 headcounts from the end of the March quarter this calendar year, when it was 223,420.

4. Dividend

The company announced an interim dividend of ₹12 per equity share of ₹2 each for the financial year 2025-26.

“The record date for the payment of the aforesaid interim dividend shall be July 18, 2025, and the payment date of the said interim dividend shall be July 28, 2025,” the company said.

5. Deal TCV

The total contract value (TCV) of new deal wins stood at $1,812 million in Q1FY26. Several companies in the US, Europe, Australia and UAE selected HCL Tech during the quarter to modernise and manage their IT operations. The company also secured several AI and GenAI deals during the quarter.

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.