Noida-headquartered HCLTech, the third-largest IT services company from India, sees a more positive FY26 compared to its peer Tata Consultancy Services (TCS), which announced its results for the first quarter of FY26 last week. In a traditionally weak quarter for the company, HCLTech raked in revenues of $3.54 billion in the first quarter of fiscal 2026 vs $3.36 billion in the corresponding quarter of the previous fiscal year, a constant currency growth of 3.7% year-on-year. However, profitability has further slid, with EBIT margins for the quarter coming in at 16.3% compared to 17.1% a year ago. The company has attributed this to client-specific issues and a lower utilization rate.

“The below-plan operating margin was driven by the fact that our utilization dropped due to a delayed ramp-up for a specific programme. We encountered ramp-downs in specific areas, which resulted in a larger bench — due to productivity benefits that we brought about, and also due to a demand-supply mismatch between skills and locations. We also have a one-time impact from a client bankruptcy,” said C Vijayakumar, CEO & Managing Director, HCLTech.

The company also has planned restructuring to remedy this mismatch for better margins. “Our objective is to get back to our 18 to 19% margins,” Vijayakumar said, adding that the incremental cost involved in achieving this is also the reason behind the downward revision of the margins.

Even as the total headcount dropped by 269 people compared to the last quarter to 2,23,151 in Q1 FY26, the company added 1,984 freshers and expects increased fresher intake in the current quarter. Ramachandran Sundararajan, Chief People Officer, said the focus would be to recruit freshers with specializations whose pay is 3–4x compared to regular freshers.

“Another important update is the specific emphasis we are placing on generative AI and the investments we are making, including investments in training and upskilling. More than 127,000 of our people are today trained and certified as foundational AI users. Of those, about 42,000 are trained and certified as advanced generative AI users. Of that group, about 12,000 are currently practitioners working on Gen AI projects, and that momentum has picked up quite significantly over the last couple of quarters. We expect that to continue,” he said.

While TCS management was dovish, indicating greater caution among clients with discretionary spends and ramp-up delays, HCLTech has seen a dip in its total contract value (TCV) of new bookings in the first quarter on a YOY basis, from $1.9 billion last year to $1.8 billion this year. Amidst the global trade and tariff uncertainty, HCLTech sees FY26 momentum to be positive and has, as a result, raised the lower end of its guidance.

“At the beginning of the quarter, we expected it to deteriorate because there was a lot of tariff-related conversation, so we were expecting at the lower end, as the assumption was that the environment would deteriorate significantly from where it was in March. However, during the quarter, we did not see that. We saw the environment to be stable,” the CEO said. With the company’s current bookings and several other deals in advanced stages, “We feel good about growing in the coming quarters,” he added.