HCLTech Q4 Results: HCL Technologies announced its January-March quarter results for fiscal 2025-26 (Q4FY26) on Tuesday, April 21, reporting a rise of 10% rise in standalone net profit to Rs 4,488 crore, compared to Rs 4,076 crore in the preceding December quarter. The leading information technology (IT) major's revenue from operations stood nearly flat on the quarter at Rs 33,981 crore. According to an average of analysts consensus compiled by Bloomberg, the net profit was expected to be Rs 4,637 crore, while revenue during the quarter-under-review was seen at Rs 33,773 crore.
The Noida-headquartered company declared a dividend of Rs 24 per share for the face value of Rs 2 each for FY27. The record date for the dividend is set as April 25, 2026. HCLTech missed estimates in terms of dividend payout as Bloomberg valued the FY26 dividend at Rs 57.12 crore, with analyst estimates ranging from Rs 60.70 per share to Rs 72.60 per share.
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HCLTech Q4 Results: Key Metrics
HCLTech provided a revenue growth growth guidance between 1-4% in constant currency terms for FY27. Revenue in CC terms fell 3.3% sequentially compared to Bloomberg's estimate of a 1.2% drop. The advanced artificial intelligence (AI) revenue came in at $620 million for the fourth quarter of FY26. HCLTech's revenue growth guidance for the services segment is pegged 1.5% between 4.5% in CC terms for FY27.
The total contract value or new deal wins during the March quarter of FY26 was at $1.9 billion. The TCV for FY26 came in at $9.6 billion. The software services firm's earnings before interest and tax (EBIT) decreased over 10% to Rs 5,620 crore, compared to Rs 6,285 crore in the preceding December quarter of FY26. EBIT margin guidance is seen between 17.5% to 18.5%.
India's third-largest IT services major reported a marginal rise in Q4 attrition rate to 12.5% compared to 12.4% in the December quarter. During a post-earnings press conference, C Vijaykumar, MD and CEO, HCLTech said that discretionary spending softened in the traditional segment and is emerging in new areas. According to the MD, client's behaviour is focused on cost optimisation with AI adoption. HCLTech's advanced AI annualised revenue reached $620 million in the fourth quarter.
"HCLTech delivered superior revenue growth of 3.9% in constant currency, 10 bps below our guidance and 17.2% operating margin within our guidance, in a year marked by uncertain demand environment. During the quarter, our performance came below our expectations due to softness in certain parts of our business and delayed decision making,'' said C Vijaykumar.
According to the management, the revenue in CC terms declined 3.3% due to seasonality in the software business and a delay in procurment decisions during March. The IT company's services segment performance for the quarter came at the lower end of expectation due to a reduction in discretionary spending in telecom business. HCL Tech's deal booking in Q4 moderated to $1.93 billion after two strong quarters. It added one client in the $100 million bracket and eight clients in the $50 million bracket.
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Near-Term Outlook
Coming to the outlook, some of the impact that affected Q4 is expected to continue in the coming quarter, as per the management. The FY27 revenue growth guidance has factored in the impact and is expected to continue in Q1FY27, according to HCL Tech's top officials. The guidance band on border is due to the current volatility in the market.
''The business environment remains highly fluid, making it difficult to form a definitive view for the next 12 months,'' said the management in the press conference. ''Two client specific challenges faced in Americas willl likely create a headwind of 50 basis points to the company's growth in FY27,'' they added. Commenting on the AI impact over business, HCLTech's management said that the demand for traditional services has not reduced, however, there is AI deflation. Despite that, HCLTech sees an increase in revenue from the top clients, according to the management.
There is a shift towards output based pricing due to AI. HCLTech will see deflation in some of the existing revenue streams. The AI deflation could be 2 to 3%. The management expects advanced AI revenue stream to grow between 25-30% YoY. ''Our new AI-led service offerings are getting traction in the market and is reflected in annualized 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,'' added C Vijaykumar, CEO, HCLTech in his statement.
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