HCL Technologies Q1 FY26: profit falls 10%, dividend ₹12

Earnings season starts, focus shifts to HCLTech

India’s Q1 results season has started, with Tata Consultancy Services (TCS) among the early reporters for the quarter ending June 30, 2026. Market attention also moved to HCL Technologies, one of the key IT services companies scheduled to report its quarterly numbers in mid-July.

Ponmudi R, CEO of Enrich Money, said attention would turn to HCL Technologies, which was scheduled to announce its quarterly earnings on Monday, July 13. Separate earnings coverage also tracked a large set of companies reporting around the same period, including HCL Technologies, Tata Technologies, Ola Electric Mobility, and others.

Against this backdrop, HCLTech reported its Q1 FY26 consolidated results for the June quarter, showing a year-on-year decline in profit and largely flat sequential growth in revenue.

Headline numbers: profit down, revenue up

HCL Technologies reported a 9.7% year-on-year drop in consolidated net profit for Q1 FY26 to ₹3,843 crore, compared with ₹4,257 crore in the corresponding quarter last year, as per a regulatory filing cited in reports. The company’s net profit was also described as below Street estimates, including a figure of ₹4,224 crore.

Revenue from operations rose 8.1% YoY to ₹30,349 crore, compared with ₹28,057 crore a year earlier. On a sequential basis, revenue increased marginally by 0.3%.

CNBC-TV18 poll tracking cited consolidated net profit at ₹3,843 crore versus a poll estimate of ₹4,177 crore, while revenue was ₹30,349 crore versus a poll estimate of ₹30,200 crore.

What management cited: expenses and a one-time hit

The company said the profit decline was impacted by higher expenses and a one-time hit from a client bankruptcy. Reports also noted the first quarter saw a 10.7% sequential fall in net profit, while revenue rose marginally.

Total expenses increased 9.2%, driven by higher employee benefit costs, outsourcing, and finance costs. This cost pressure was a key factor behind the profit decline even as the company posted year-on-year revenue growth.

Margin commentary and investment focus

HCLTech CEO and MD C Vijayakumar said the company saw “healthy revenue growth of 3.7% YoY” supported by Services performance, with 4.5% YoY growth in constant currency.

He added that the operating margin came in at 16.3%, impacted by lower utilisation and additional investments in Gen AI and go-to-market (GTM) initiatives.

Business drivers highlighted in the quarter

Reports said growth was led by:

• Technology and services (13.7%)
• Telecom and media (13%)
• Retail and CPG (8.2%)
• Financial services (6.8%)

This segment-led growth helped keep revenue expanding year-on-year, even as profit came under pressure due to costs and the one-time impact noted in coverage.

Guidance revised upward at the lower end

Following what was described as a better-than-expected Q1 performance, HCLTech revised its constant currency revenue growth guidance for FY26 to 3% to 5%, from the earlier 2% to 5%.

The company cited a stable demand environment and expectations of stronger deal bookings in the coming quarters.

Deal wins, digital mix, and reported USD metrics

In a results release for the quarter ended June 30, 2025, HCLTech reported:

• Constant currency revenue up 3.7% YoY
• USD revenue of $1.55 billion, up 5.4% YoY
• EBIT margin of 16.3%
• Digital Services revenue growth of 15.2% YoY (CC), contributing 41.6% of overall Services revenue
• Engineering and R&D Services growth of 11.8% YoY (CC)
• HCLSoftware Annual Recurring Revenue of $1.06 billion, up 1.3% (CC)
• Total new deal wins of $1.8 billion for the quarter

Separately, consolidated revenues as of 12 months ending June 2025 were reported at $14.0 billion.

Dividend declared for FY26

The board declared an interim dividend of ₹12 per equity share (face value ₹2 each) for FY26, as stated in a regulatory filing.

The company also described this as the 90th consecutive quarter of dividend payouts.

Stock reaction and timing of results

HCLTech shares closed 1.04% lower at ₹1,619.95 on the BSE. Reports noted the Q1 results were announced after market hours.

Key financial snapshot (as reported)

Note: Figures were provided in results coverage as “all figures in crores except per share values”, with comparisons shown on QoQ and YoY basis.

What to watch as more results arrive

The Q1 results calendar includes several marquee names expected to report in the same period, such as HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank, Wipro, Jio Financial Services, BHEL, and others.

For IT services investors, attention typically remains on management commentary around demand, client spending trends, cost controls, and deal momentum. In HCLTech’s case, the updated FY26 constant currency revenue guidance and commentary on stable demand and deal bookings are key reference points alongside the quarter’s profit decline.

Conclusion

HCL Technologies’ Q1 FY26 results showed revenue growth year-on-year but pressure on profitability due to higher expenses and a one-time client bankruptcy impact. The company announced an interim dividend of ₹12 per share and raised the lower end of its FY26 constant currency revenue growth guidance to 3% to 5%. Investors are likely to track follow-through on deal bookings and margin levers as the broader earnings season progresses.