HCLTech Q4 Profit Falls 6%, Guides For Up To 5% Revenue Growth In FY26

HCL Technologies Ltd. has tapered its revenue-growth guidance for the current financial year to 2–5% amid an uncertain demand environment in comparison to 4.5–5% in the last fiscal.

The consolidated net profit slipped 6.2% sequentially to Rs 4,309 crore in the quarter ended March 31, 2025, according to an exchange filing on Tuesday. However, the bottom line was in line with the consensus estimate of Rs 4,376 crore of analysts tracked by Bloomberg.

The IT services firm's revenue rose 1.2% in the fourth quarter to 30,246 crore, meeting the estimates.

• Revenue up 1.2% to Rs 30,246 crore versus Rs 29,890 crore (Bloomberg estimate: Rs 30,261.8 crore).

• Net profit down 6.2% at Rs 4,309 crore versus Rs 4,594 crore (Estimate Rs 4,376 crore).

• EBIT down 6.51% at Rs 5,442 crore versus Rs 5,821 crore (Estimate 5,558 crore).

• EBIT margin narrows 148 basis points to 17.99% versus 19.47%. (Estimate: 18.37%).

On a full-year basis, revenue growth in constant-currency terms came in at 4.7%, in line with guidance provided for the year. For FY26, Services revenue growth is also expected to be in the 2–5% range. The EBIT margin projections remain between 18% and 19%. 

The IT and business services grew 1.4% on a year-on-year basis, lower than 5.8% last quarter. Engineering and R&D services grew 8.5%. The software business hiked 4.9% on a YoY basis.

"We haven't seen any tariff impact so far. All industries will get impacted if tariff plays out, with the biggest hit being on cost for clients and their focus on adoption of AI," Chief Executive Officer C Vijayakumar said. "There will also definitely be a deterioration in discretionary spend."

The revenue guidance on the lower end considers deterioration in the macroeconomic environment and discretionary spend. The higher end presumes a stable environment and deal closures, he said.

HCLTech lost out on a large deal in the fourth quarter, but the deal pipeline still saw an uptick. It expects the impact on tariffs initially in the retail consumer packaged goods and manufacturing verticals, with a spillover effect on all other verticals subsequently, according to the CEO.

The CEO underscored that customers would tighten spending budgets where the return on Investment was missing in the current environment.

However, HCLTech maintains an "all-weather portfolio" where the company will benefit from a positive environment with good discretionary spending and even in a conservative cost optimisation environment.

In terms of geographies, HCLTech clocked a 5.3% year-on-year growth in the North and South American market, lower than 6.2% recorded in the preceding quarter. The business in Europe grew 3.5% and business from the rest of the world grew 4.7%. 

The business from telecommunications, media, publishing and entertainment segments grew the highest at 24% on a YoY basis, whereas financial services dipped 0.7%, life sciences and healthcare declined 7.4%, and public services dropped 0.5%.

"Our focus remains on delivering stable margins, relative to peers. We are steering our savings from internal programmes to invest in sales. Aspiration for a higher margin band definitely continues," Chief Financial Officer Shiv Wali said.

Bookings in the fourth quarter rose, with new deal total contract value coming in at $2,995 million, from $2,095 million from in the preceding quarter ended Dec. 31, 2024. 

The employee count stood at 2,23,420, marking an increase of 2,665 employees from last quarter. The attrition rate was flat at 13%.

"FY26 overall hiring numbers will be higher than in FY25. Plans to hire will be made on a quarter-on-quarter basis," Chief People Officer Ramachandran Sundararajan said.

The company's wage-hike cycle starts from the October quarter and it will be in line with the current cycle, he added.

Before the quarterly results were declared, shares of HCLTech closed flat at Rs 1480.1 apiece on the BSE, compared to a 0.24% advance in the benchmark Sensex.