HCLTech starts FY27 on a strong note as profit, revenue and EBIT rise sequentially; maintains FY27 guidance

HCLTech kicked off FY27 on a strong footing, reporting sequential growth in revenue, profit and operating earnings, supported by record deal bookings, accelerating artificial intelligence (AI) business and improving margins. The company also retained its full-year revenue and margin guidance, indicating confidence in demand despite a muted macroeconomic environment.

The IT major reported a consolidated net profit of ₹4,624 crore for the quarter ended June 30, up 3.03% sequentially from ₹4,488 crore and 20.3% year-on-year. Revenue rose 1.8% quarter-on-quarter to ₹34,579 crore, while EBIT climbed 3.7% to ₹5,831 crore. EBIT margin expanded 39 basis points sequentially to 16.9%, even after absorbing restructuring costs during the quarter. Excluding these costs, EBIT margin stood at 17.5%.

The board declared an interim dividend of ₹12 per equity share.

Record bookings, AI business gathers pace

A key highlight of the quarter was HCLTech's highest-ever first-quarter net new bookings of $2.41 billion, stressing continued enterprise spending on digital transformation.

Its Advanced AI business generated $171 million in revenue during the quarter, growing 10.6% sequentially and 62.1% year-on-year in constant currency terms. The company also announced several AI-led transformation deals spanning pharmaceuticals, manufacturing, telecom, financial services and semiconductor companies.

"We recorded our highest ever Q1 net-new bookings of $2.4 billion and our Advanced AI business grew 10.6% QoQ and 62.1% YoY in constant currency terms. These demonstrate that enterprises are choosing us to lead their AI-led transformation," said C Vijayakumar, chief executive officer and managing director.

"Combined with the operational efficiencies visible in margin expansion, this momentum gives us the confidence we're positioned to keep outpacing the market over the medium term," he added.

Chairperson Roshni Nadar Malhotra said AI continues to reshape enterprise technology spending.

"AI is accelerating the transformation of global enterprises and unlocking new growth vectors for HCLTech. With our differentiated portfolio, we continue to demonstrate our ability to help clients leverage technology to drive their business strategies," she said.

Guidance retained despite currency headwinds

While reported revenue grew strongly in rupee terms, constant currency performance remained subdued. Revenue declined 0.5% sequentially but rose 2.6% year-on-year in constant currency, reflecting continued pressure from client spending patterns and currency movements. Services revenue slipped 0.7% QoQ but increased 3.5% YoY in constant currency.

Nevertheless, HCLTech maintained its FY27 guidance, expecting company revenue growth of 1-4% and services revenue growth of 1.5-4.5% in constant currency, while reiterating its EBIT margin guidance of 17.5-18.5%.

Biswajit Maity, senior principal analyst, Gartner said: “HCLTech delivered a decent Q1 FY27, with steady revenue growth, strong Advanced AI momentum, improving margins, and healthy deal wins, demonstrating continued progress despite a cautious spending environment."

The company's strategy remains aligned with current enterprise technology priorities, where organisations are increasingly focusing on AI-led transformation, cloud modernisation, cybersecurity, workplace transformation, and operational efficiency, he said.

"Through continued investments in AI Factories, Physical AI, AI Force, engineering-led services, and strategic ecosystem partnerships, the company is evolving from a traditional IT services provider into a higher-value AI-led transformation partner. While demand remains uneven across some legacy service areas, accelerating AI revenues, strong deal momentum, healthy profitability, and expanding client relationships suggest that the strategic pivot is gaining traction and should support sustainable long-term growth," Maity added.

Financial services, public services drive growth

Among industry verticals, Public Services led growth with 12% YoY constant currency expansion, followed by Retail & CPG (10.1%), Technology & Services (7.3%), Financial Services (5.3%) and Manufacturing (3.7%). Telecommunications, Media, Publishing & Entertainment remained the weakest segment, declining 10.9%. India was the fastest-growing geography with 16.9% YoY growth in constant currency.

Chief financial officer Shiv Walia said the company continued to improve profitability and capital efficiency despite restructuring expenses.

"HCLTech delivered a steady Q1 FY27 performance, with revenue growth of 13.9% YoY, EBIT growth of 18% YoY and net income growth of 20.3% YoY. Our cash generation continues to be robust, with OCF/NI at 111%, reflecting the strength and resilience of our business model," he said.

The company ended the quarter with 223,889 employees, while attrition remained largely stable at 12.7%. Revenue per employee improved to $65,500 annually, and return on invested capital (ROIC) rose to 40.7%, highlighting continued operational efficiency.

Shares of HCLTech ended 5.15% higher at ₹1,224 apiece on the NSE on Monday ahead of its June-quarter earnings announcement. Despite the pre-results rally, the stock has declined more than 25% over the past year, underperforming the benchmark Nifty 50 index, which has fallen nearly 4% during the same period.