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Revenue
₹30,349 Cr
verified against source
Revenue YoY
3.7%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
HCLTech reported Q1 FY26 revenue growth of 3.7% YoY in constant currency, slightly above expectations, but EBIT margin fell to 16.3% due to utilization issues, a client bankruptcy, and accelerated AI investments. The company revised FY26 revenue guidance upward to 3%-5% (from earlier 2%-4%) but lowered EBIT margin guidance to 17%-18% (from 18%-19%). Growth was driven by technology (+13.7% YoY) and financial services (+6.8% YoY), while manufacturing and retail remained weak. Net new bookings were $1.8 billion, with two large deals slipping to Q2. Management highlighted strong AI momentum, including an OpenAI partnership and 35 AI Force deployments. Risks include margin pressure from restructuring costs and potential demand softness in auto and life sciences.
Colored figures show movement against the previous available record.
Guidance to track
- Revenue growth guidance improved from 2%-4% to 3%-5% in constant currency, based on better Q1 performance and outlook.
- EBIT margin guidance reduced from 18%-19% to 17%-18%, factoring in Q1 headwinds, restructuring costs, and AI investments.
- One-time restructuring costs (people and non-people) of 30-40 bps impact in subsequent quarters to improve structural agility.
- Management expects SG&A percentage to normalize in FY27 as growth catches up with AI investments.
Risks flagged
- Restructuring costs and lower utilization from skill mismatches could persist into Q2, weighing on margins.
- Automotive and manufacturing verticals continue to see ramp-downs, with no quick recovery expected.
- Productivity benefits from GenAI could reduce revenue from existing contracts, though management claims wallet share gains offset this.
- Two large deals slipped from Q1 to Q2, and ramp-up of a large contact center deal is slower than expected.
Key quotes
- We are very clear we are not setting structurally the margin bar lower. I think it will continue to be 19-20% in the next three quarters, obviously for all the reasons that we explained.
- This quarter, we traded short-term pain in profitability to secure our long-term growth leadership.
- We are being very transparent. We are telling the clients, if you allow us to use AI Force and use all the recipes that we've created, we will showcase to you the optimization that is possible.
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