HCLTech Q1 Results: Profit Misses Estimates, FY26 Revenue Guidance Narrowed, Margin Guidance Lowered

HCLTech Ltd. narrowed its full-year revenue guidance and lowered its margin forecast for FY26 after reporting an 11% drop in first-quarter profit that missed analysts’ expectations.

The company now expects constant currency revenue growth of 3% to 5% year-on-year for the financial year ending March 2026, against its earlier projection of 2% to 5%, according to its notification to the exchanges. It expects its services revenue guidance at 3% to 5%.

Besides, the EBIT margin guidance has been lowered to 17%–18% for the full year, compared to the earlier range of 18%–19%.

The software services provider's profit for the April-June period 11% on a sequential basis, missing analysts estimates.

The information technology company's bottom line stood at Rs 3,843 crore during the first quarter of the financial year ending March 2026, compared to Rs 4,307 crore clocked in the preceding quarter, according to its notification to the exchanges. Analysts tracked by Bloomberg had pegged the profit at Rs 4,258.91 crore.

• Revenue up 0.3% to Rs 30,349 crore versus Rs 30,246 crore (Bloomberg estimate: Rs 30,298 crore)

• EBIT down 9% to Rs 4,942.00 crore versus Rs 5,442.00 crore (Bloomberg estimate: Rs 5,286.25 crore)

• EBIT margin expands by 170basis points to 16.3% versus 18% (Bloomberg estimate: 17.45%)

• Profit down 11% to Rs 3,843 crore versus Rs 4,307 crore (Bloomberg estimate: Rs 4,258.91 crore)

The operating margin was impacted by lower utilisation and investments in GenAI and go-to-market initiatives, according to its Chief Executive Officer and Managing Director C Vijayakumar. “Our AI propositions are resonating well with our clients and have been augmented further by our partnership with OpenAI,” he said.

The company reported total contract value of new deal wins at $1.8 billion for the quarter, compared to $2.9 billion in the previous quarter.

HCLTech’s total headcount stood at 223,151 as of June, with a net addition of 269 employees from the previous quarter. It hired 1,984 freshers during the three-month period. The last twelve months’ attrition rate stood at 12.8%, unchanged from the same quarter a year earlier.

The company also announced dividend of Rs 12 per equity share for the first quarter of the current financial year, in which the IT firm will be distributing nearly Rs 3,256 crore to shareholders through the payout.

Shares of HCLTech settled 1.51% lower at Rs 1,613.50 apiece on the on the National Stock Exchange before the announcement, compared to a 0.27% decline in the benchmark Nifty. The scrip shares have risen 3.41% over the past 12 months and fallen 15.85% year-to-date.

Out of 47 analysts tracking the company, 20 maintain a 'buy' rating, 17 recommend a 'hold' and 10 suggest 'sell', according to Bloomberg data. The average 12-month consensus price target of Rs 1,684.09 implies an upside of 4%.