HCL Technologies announces a 4.2% increase in profit with AI revenues hitting $620 million as the company navigates market uncertainties.
HCL Technologies has announced a consolidated net profit of ₹4,488 crore for the January-March quarter of the financial year 2026, marking a 4.2% increase compared to the same period last year. This growth has been primarily driven by strong performance in its artificial intelligence (AI) services.
In the recent financial report, the company’s revenue from operations rose to ₹33,981 crore, an increase of 12.3% year-on-year. In dollar terms, this equates to $3.68 billion, reflecting a 5.3% rise year-on-year but a 2.9% decrease sequentially. When adjusted for constant currency, revenue saw a decline of 3.3% quarter-on-quarter.
HCL Technologies indicated that its performance was affected by decreased discretionary spending and postponed decision-making processes by clients, which have become common challenges in the IT sector.
For the entire financial year ending March 31, the company reported a total revenue of ₹130,144 crore, which is an 11.2% increase from the previous year. However, the net profit for the same period slightly decreased by 0.2%, amounting to ₹17,361 crore.
The company’s Advanced AI revenue has crossed $620 million, with $155 million generated during the recent quarter alone. This figure marks a 6.1% sequential increase in constant currency. C Vijayakumar, Chief Executive Officer and Managing Director of HCL Technologies, stated, “Our new AI-led service offerings are getting traction in the market.” He further noted that AI is influencing the size of contracts, mentioning, “Something that was a $100 million deal could now be an $80 million deal because of the deflation.”
Vijayakumar also discussed the company’s evolving service model, which now divides its operations into three segments: traditional services affected by AI, growing areas such as cloud and cybersecurity, and AI-native offerings.
In terms of overall contract value, HCLTech reported $1.94 billion for the quarter and $9.3 billion for the financial year, indicating a steady performance in deal acquisitions despite market pressures.
The company’s earnings before interest and tax (EBIT) margin for the March quarter was reported at 16.5%, down from 10.6% sequentially but up by 3.3% from the previous year. For the full fiscal year, the EBIT margin was recorded at 17.2%.
HCL Technologies also expanded its workforce during the quarter, adding 802 employees to bring its total headcount to 227,181. Chief People Officer Ram Sundararajan mentioned that hiring strategies will continue to evolve based on market conditions rather than adhering to fixed annual targets, while the number of fresh recruits has increased to 11,744 this year from approximately 7,800 the previous year. Employee attrition rates have improved, now standing at 12.5% compared to 13% a year earlier.
For the financial year 2027, HCL Technologies anticipates an overall revenue growth ranging between 1% to 4% in constant currency terms, with services revenue expected to grow between 1.5% and 4.5%. Vijayakumar indicated that the broad guidance reflects the uncertain market conditions surrounding discretionary spending, with the lower growth projection assuming ongoing challenges and the upper limit reflecting a potential recovery with increased deal activity.
