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HCLTech announced a 4.20 per cent year-on-year increase in its Q4 FY26 consolidated net profit to Rs 4,488 crore, yet tempered expectations with a 1-4 per cent revenue growth guidance for FY27, reflecting a challenging and volatile demand environment.
Illustration: Dado Ruvic/Reuters
Key Points
- HCLTech’s consolidated net profit for Q4 FY26 increased by 4.20% year-on-year to Rs 4,488 crore.
- The company projects a revenue growth of 1-4% in constant currency for FY27, attributing the broad guidance to market volatility and reduced discretionary spending.
- For the full fiscal year 2025-26, HCLTech’s net profit declined by 4.30% to Rs 16,642 crore, despite an 11.18% rise in revenue.
- HCLTech’s Advanced AI revenue crossed $620 million annually in Q4, with new AI deal volumes helping offset deflation in traditional segments.
- The company added 802 employees in Q4, bringing the total headcount to 227,181, and onboarded 11,744 freshers for FY26.
IT major HCLTech on Tuesday reported a 4.20 per cent on-year rise in consolidated net profit to Rs 4,488 crore in the January-March quarter of FY26, even as the management flagged a highly volatile demand environment shadowed by tariffs and softened discretionary spends, giving a FY27 growth guidance of 1-4 per cent.
The Noida-headquartered firm had reported a consolidated net profit of Rs 4,307 crore in the same period of FY25.
The firm’s revenue from operations rose 12.34 per cent to Rs 33,981 crore in Q4 FY26, up from Rs 30,246 crore in Q4 FY25.
FY27 Growth Outlook and Market Challenges
The IT major projected its FY27 company revenue growth to be in the range of 1 per cent to 4 per cent in constant currency (CC).
The company attributed the broad band of guidance to market volatility, reduced discretionary spend, and two client-specific situations where it expects some ramp-downs.
On a quarter-on-quarter basis, HCLTech’s profit and revenue rose by 10.10 per cent and 0.32 per cent, respectively.
For the full fiscal year of 2025-26, HCLTech recorded a net profit of Rs 16,642 crore, reflecting a 4.30 per cent decline from Rs 17,390 crore in FY25.
FY26 revenue stood 11.18 per cent higher at Rs 130,144 crore.
CEO’s Perspective on Demand and AI Traction
HCLTech CEO and MD C Vijayakumar (aka CVK) termed the year as one of an uncertain demand environment.
“During the quarter, our performance came below our expectations due to softness in certain parts of our business, due to lower discretionary spend and delayed decision making.
“Our new AI-led service offerings are getting traction in the market and are reflected in annualised Advanced AI revenues crossing $620 million in Q4.
“Our #1 priority in FY27 is to ensure the company is positioned right to take advantage of AI opportunities for multi-decade value creation,” he said.
The company’s Advanced AI revenue reached $155 million in Q4, he said during the company’s earnings call.
Management acknowledged that AI is causing a deflation of 2 per cent to 3 per cent per year in traditional segments (e.g., a $100 million deal is now being priced at $80 million due to AI efficiencies).
However, new AI deal volumes seem to be offsetting this revenue loss.
“Momentum across our advanced AI offerings and overall AI portfolio remains strong, reflecting the strength of our early bets and our continued focus on AI that scales from experimentation to measurable business impact.
Our pipeline remains robust and broad-based across segments, verticals, and regions, with AI increasingly integral to nearly all deal conversations,” CVK said.
Segmental Performance and Employee Growth
During the quarter ended March, HCLTech’s IT & Business Services segment grew by 4.3 per cent year-on-year (YoY), while Engineering and R&D Services (ER&D) registered a growth of 3.8 per cent YoY.
The software segment witnessed a sharp decline, with revenue dropping 14.1 per cent YoY.
Geographically, the Indian market grew by 5.3 per cent, while the Americas (USA) grew by 4.9 per cent.
The European market witnessed a contraction, declining by 2.9 per cent YoY.
The company recorded a Total Contract Value (TCV) of new deal wins at $1,936 million for Q4, and $9,323 million for the full year FY26.
HCLTech added 802 employees on a net basis in Q4, taking the total headcount to 227,181.
The company onboarded 1,712 freshers in Q4, bringing the total fresher intake for FY26 to 11,744.
The company did not share its hiring target for the next fiscal year.
On the prolonged West Asia crisis that affected many global businesses, HCLTech said the company’s exposure to the Middle East is very limited, with the region contributing only about 1 per cent to the revenues.
“We saw some impact in the software business during the quarter. Some of the decisions on procurement were delayed. We haven’t seen any (impact) in the services business,” CVK said.
Shares of HCLTech settled 0.92 per cent higher at Rs 1,441.55 apiece on the BSE on Tuesday. The financial results were announced post-market hours.
