HCL Technologies (HCLTECH) Q1 25/26 earnings summary

Executive summary

• Q1 FY2026 revenue grew 8.2% year-over-year to ₹30,349 crore ($3,545M), with constant currency growth of 3.7% and a 0.8% sequential decline; growth led by technology and services, telecom and media, retail and CPG, and financial services verticals.

• EBIT margin was 16.3%, down sequentially, impacted by lower utilization, a client bankruptcy, and continued investment in AI and go-to-market capabilities; net income was ₹3,843 crore, down 9.7% year-over-year.

• Net new bookings reached $1.8 billion, with a strong pipeline and balanced portfolio across service lines and geographies.

• Significant progress in AI, including strategic partnerships with OpenAI, UiPath, Google Cloud, and NVIDIA, and multiple industry recognitions for AI leadership.

• Board approved unaudited consolidated and standalone financial results and declared an interim dividend of ₹12 per share for FY 2025-26.

Financial highlights

• Total Q1 revenue: ₹30,349 crore ($3,545 million), up 8.2% year-over-year, with constant currency growth of 3.7% and a 0.8% quarter-on-quarter decline.

• EBIT: ₹4,942 crore (16.3% margin), net income: ₹3,843 crore (12.7% margin), basic EPS for the quarter: ₹14.18.

• Operating cash flow (LTM): $2.57 billion; free cash flow: $2.42 billion; OCF/NI at 129%, FCF/NI at 121%.

• Diluted EPS (LTM): INR 62.57, up 3.4% year-over-year; interim dividend of INR 12 per share declared.

• LTM ROIC at 38.1%, up 353 bps year-over-year; services ROIC at 45.2%, software ROIC at 20.8%.

Outlook and guidance

• FY2026 revenue growth guidance raised to 3%-5% in constant currency; EBIT margin guidance set at 17%-18% due to Q1 impacts, ongoing investments, and restructuring costs.

• Management expects margins to normalize to 19%-20% in the next financial year as investments yield returns and restructuring costs subside.