HCLTech Q1FY26 Earnings: Net Profit Drops 10% Despite 8% Revenue Growth

Leading Indian IT services company HCLTech has kicked off FY26 with a mixed financial performance, reporting a dip in net profit but an uptick in revenue during the quarter ended June 30, 2025.

The company posted a 10% decline in consolidated net profit, which fell to ₹3,843 crore compared to ₹4,257 crore in the corresponding quarter of the previous fiscal year. Despite this drop in profitability, revenue from operations climbed 8% year-on-year, reaching ₹30,349 crore in Q1FY26, up from ₹28,057 crore in Q1FY25.

Margins Under Pressure, Guidance Revised

Operational performance took a hit as HCLTech’s EBITDA margin contracted sharply. The operating margin for the June quarter stood at 16.3%, a sequential drop of 160 basis points from 17.9% in Q4FY25. Reflecting this pressure, the company has lowered its full-year margin guidance to 17-18%, down from the previously estimated 18-19%.

The management cited macroeconomic headwinds and changing client priorities as factors behind the margin squeeze.

Revenue Growth Outlook Adjusted

On a more positive note, HCLTech revised its FY26 constant currency revenue growth forecast to 3-5%, lifting the upper bound from its earlier projection of 2-5%. This adjustment signals moderate confidence in client demand despite a cautious business environment.

Analysts suggest that the company’s diversified services portfolio and ongoing digital transformation projects may help cushion the impact of profitability concerns in the upcoming quarters.

What to Watch Going Forward

Investors and market watchers will closely monitor HCLTech’s progress in stabilizing margins and converting its revenue pipeline into sustained earnings growth. With margin guidance now realigned and growth expectations moderately optimistic, the next few quarters will be critical for the company’s performance trajectory in FY26.

Disclaimer:- This article is based on publicly available financial disclosures and is intended for informational purposes only. It does not constitute financial advice or a recommendation to invest in any securities. Readers should consult with their financial advisor before making investment decisions.