HCLTech vs Endurance Technologies Q3 FY26

HCLTech delivered a standout Q3 FY26 with revenue of INR 33,872 crore, up 13.3% YoY, crossing a $15 billion annualized revenue milestone. Services revenue grew 5% YoY in constant currency, led by Engineering & R&D Services (10.8% YoY) and HCLSoftware (28.1% QoQ). EBIT margin at 18.6% (excl. labor code impact) improved 111 bps QoQ. Net income was INR 4,795 crore. Management raised full-year services guidance to 4.7%-5.25% CC and overall guidance to 4%-4.5% CC. Key growth drivers include advanced AI revenue of $148 million (up 20% QoQ), strong bookings of $3 billion, and a mega $475 million AI-led deal. Risks include persistent softness in discretionary spending and potential impact from U.S. tariff policies, though management remains confident in capturing emerging AI-related spend.

Guidance read

FY26 Services Revenue Growth Guidance Raised to 4.7%-5.25% CC: Full-year services constant currency growth guidance raised to 4.7%-5.25% from previous range, reflecting strong Q3 performance and bookings. FY26 Overall Revenue Growth Guidance Raised to 4%-4.5% CC: Company-level constant currency growth guidance raised to 4%-4.5% for FY26. FY26 EBIT Margin Guidance Maintained at 17%-18%: Full-year EBIT margin guidance remains at 17%-18%, inclusive of restructuring costs but excluding one-time labor code impact. Ongoing Labor Code Cost Impact Minimal at 10-20 bps: Management expects minimal ongoing costs from new labor code, estimated at 10-20 basis points impact on margins.

Risk read

Key risks include Persistent Softness in Discretionary Spending — Traditional discretionary spending remains soft, and management is not expecting a rebound to pre-COVID levels, focusing instead on emerging AI-related spend.; U.S. Tariff and Geopolitical Uncertainty — Potential impact from U.S. tariff threats (e.g., 500% tariff) and geopolitical tensions could affect the services sector. Management declined to comment, indicating uncertainty.; Life Sciences & Healthcare Vertical Weakness — Life Sciences and healthcare vertical continues to show weakness due to U.S. healthcare sector pressure, with management expecting stabilization in a couple of quarters.; GCC Expansion Impacting Outsourcing — Rise of Global Capability Centers (GCCs) in India may structurally change outsourcing opportunities, though management sees it as a net opportunity..

Promise ledger

Of 4 tracked promises, management 0 met, 0 close, 4 missed.

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Endurance Technologies

Q3 FY26 · Information Technology

Endurance Technologies delivered a strong Q3 FY26 with standalone revenue of ₹2,678.3 crore (+22.2% YoY) and EBITDA of ₹339.1 crore (+18% YoY), though EBITDA margin contracted 40bps to 12.7% due to aluminum cost inflation. PAT grew 8.8% to ₹170.7 crore, impacted by a ₹20.6 crore exceptional charge for new labor codes. The India business saw robust order wins of ₹1,282.8 crore in 9M FY26, driven by four-wheeler castings, solar dampers, and EV components. Key growth drivers include ABS mandate clarity (expected by Q4), new plant ramp-ups (Chennai disc brakes, Shendra castings, alloy wheels), and premiumization trends boosting inverted front forks and ASC. Management guided for controlled capex below ₹800 crore in India and expects full impact of greenfield plants in H2 FY27. Risk: European auto market weakness and order inflow slowdown could persist if regulatory uncertainty on ICE/EV transition continues.

Guidance read

ABS mandate clarity expected by Q4 FY26: Final guidelines for ABS on >50cc 2Ws and EVs >4kW expected by end of March 2026; SOP for dual-channel ABS ECU in Q1 FY27. Capex in India to be controlled below ₹800 crore in FY27: Management plans to sweat assets and keep India capex below ₹800 crore, focusing on automation and profitable growth. Greenfield plants to be fully operational by H2 FY27: Chennai disc brake, Shendra castings, Aurangabad alloy wheel, and Pune battery pack plants will ramp up; full impact in H2 FY27. Solar damper business to double by FY26 end: Exports of solar dampers worth ₹24 Cr in 9M; expected to double by year-end; new US client orders from mid-FY27.

Risk read

Key risks include European auto market weakness and order inflow slowdown — European order inflow declined to €15M in 9M FY26 vs €40M prior year due to regulatory uncertainty on ICE/EV transition and Chinese import competition.; Aluminum cost inflation pressuring margins — Raw material cost increases, especially aluminum (55% of purchases), led to 40bps EBITDA margin contraction; pass-through may be limited.; Delay in ABS mandate finalization — ABS guidelines still awaited; any further delay could push back expected revenue from ABS and hydraulic brake systems.; Execution risk in new plant ramp-ups — Multiple greenfield plants (Chennai, Shendra, Aurangabad, Pune) are under construction; delays in SOP or customer approvals could impact revenue..

Promise ledger

Scorecard data is being built as historical quarters are processed.