HCLTech Q1 Preview: Muted Growth Likely; Analysts Expect Narrower FY26 Guidance Band

HCLTech Ltd. is set to report its June quarter earnings on Monday and most brokerages expect a soft set of numbers due to seasonal weakness and subdued client spending.

While revenue and margins are likely to decline sequentially, analysts anticipate the company will narrow the lower end of its revenue growth guidance for the financial year ending March 2026.

Several brokerages including Goldman Sachs and PhillipCapital expect HCLTech to revise its revenue growth outlook for FY26 to a 3–5% range from the earlier 2–5%, while others like Motilal Oswal and HSBC see the company retaining its existing guidance.

EBIT margin is also expected to come under pressure due to weak revenue growth, lower utilisation, and adverse currency impact. Most analysts expect the FY26 EBIT margin guidance to remain unchanged at 18–19%.

Consolidated revenue for the quarter is seen largely flat at Rs 30,298 crore versus Rs 30,299 crore in the previous quarter, according to analysts' consensus estimates tracked by Bloomberg. EBIT is expected to fall 3% sequentially to Rs 5,277 crore, according to Bloomberg estimates.

EBIT margin is projected to contract to 17.06% from 17.91% in the March quarter.

• Revenue seen little changed at Rs 30,298 crore versus Rs 30,299 crore

• EBIT seen 3% lower at Rs 5,277 crore versus Rs 5,429 crore

• EBIT margin seen at 17.06% versus 17.91%

• Profit seen 1% lower at Rs 4,253 crore versus Rs 4,293 crore

Here is what analysts are expecting from HCLTech in its Q1 results:

• Growth to remain subdued in Q1 due to adverse seasonality

• Expect Q1 services revenue decline of 0.6% on a sequential basis

• Expect company to raise the lower end of FY26 revenue guidance

• Expect new FY26 revenue guidance band of 3-5%, compared to 2-5% reported earlier

• Q1 margin to be impacted by drag in revenue growth

• Expect FY26 EBIT margin guidance to remain unchanged at 18-19%

• Expect headcount to remain flat on a sequential basis

• Expect soft quarter supported by FX with limited chances of guide-ups

• While signings are likely to remain tight, pressure from AI deflation is likely to filter through client demand for price cuts that is likely to keep revenue conversion light

• Expect revenues to increase by 1% due to cross currency tailwinds while keeping margins flat, which drives a 1% earnings upgrade across estimates through financial year ending March 2028

• Expect HCLTech to be among the fastest scale providers on FY26 growth

• Expect revenue in constant currency terms to decline by 0.4% on a sequential basis

• With cross currency benefit of 230 basis points, reported growth will be positive

• Margin is expected to decline by 20 basis points quarter-on-quarter due to weak revenue growth and productivity passbacks offset by operational efficiencies

• Expect HCLTech to narrow FY26 growth guidance to 3-5% in constant currency terms, compared to 2-5% reported earlier

• Watch out for: FY26 guidance update, outlook on ERD, deal TCVs & pipeline, discretionary spending outlook, margin commentary

• Expect seasonally lower revenues for products business and marginal growth for IT & ERD services business

• Expect constant currency revenue growth to more than offset the seasonal business decline on a sequential basis

• Expect revenue in dollar terms to grow 0.5% on a sequential basis

• Operating margin are expected to fall by 80 basis points due to the impact of lower utilisation, lower share of revenues from high margin software business and some adverse impact of currency

• Key focus area would be update on FY26 revenue growth guidance; we expect company to maintain guidance of 2-5% in dollar terms

• Outlook on deal ramp-ups, discretionary spends and ER&D business will be critical

• Expect the company to retain its FY26 revenue growth guidance of 2-5%

• Expect the company to report a 1.2% QoQ revenue decline in a seasonally weak quarter

• Margins are expected to decline 50 basis points QoQ, in line with the typical Q1 seasonal reset similar to prior years