HCLTech vs Netweb Technologies India Q4 FY26

HC

HCLTech

Q4 FY26 · Information Technology

HCL Tech reported Q4 FY26 revenue of $3.68B, up 2.4% YoY but down 3.3% QoQ, missing expectations due to delayed procurement decisions and discretionary spending cuts by two large US telecom clients. Services revenue grew 4.2% YoY while software declined 14% YoY. Full-year revenue grew 3.9% in constant currency, with services up 4.8%. EBITDA margin (ex-restructuring) was 17.7%, down 20bps YoY. Management guided FY27 revenue growth of 1-4% (services 1.5-4.5%) and EBIT margin of 17.5-18.5%, reflecting headwinds from two client-specific reductions (~50bps) and continued soft discretionary spend. AI momentum remains strong with $155M quarterly advanced AI revenue (+6.1% QoQ) and a $100M+ AI factory deal. Key risk: further escalation of tariff volatility or client-specific issues could pressure growth.

Guidance read

FY27 revenue growth 1-4% CC: Consolidated revenue growth guidance for FY27 in constant currency; services growth 1.5-4.5%. FY27 EBIT margin 17.5-18.5%: Operating margin guidance for FY27, excluding impact of acquisitions. Two clients to cause ~50bps growth headwind in FY27: Specific client reductions in manufacturing and retail will impact growth by about 50 basis points. AI native services to grow 25-30%: Management expects advanced AI services (AI factory, custom silicon) to grow at 25-30% annually.

Risk read

Key risks include Telecom discretionary spending cuts may persist — Two large US telecom clients cut discretionary spend in Q4; impact expected to continue through calendar 2026.; AI deflation could accelerate beyond 2-3% — Analyst questioned if deflation from AI could expand; management acknowledged risk but maintained 2-3% estimate for HCL.; Software revenue volatility from government deals — Q4 software revenue missed due to delayed US government decisions; timing of closures unpredictable.; Geopolitical uncertainty in Europe — Management noted softness in Europe due to geopolitical escalations, which could worsen..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.

Netweb Technologies delivered a stellar Q4 FY26 with revenue of ₹7,737 crore, up 86.6% YoY, driven by a 459.6% surge in AI systems which now constitute 43.4% of revenue. PAT grew 65.7% YoY to ₹76 crore, with margins stable at ~9%. The company enters FY27 with a robust order book of ₹2,400 crore (including L1), exceeding last year's total revenue. Management guided for 35-40% revenue growth and 13-14% EBITDA margins over the next couple of years, excluding strategic orders. Key risks include potential supply chain constraints for AI components and execution delays in large strategic orders.

Guidance read

Revenue growth 35-40% for next couple of years: Management guided for 35-40% revenue CAGR over the next 2 years, excluding strategic orders. EBITDA margin 13-14% for next couple of years: Operating EBITDA margin guided in the range of 13-14% for the next couple of years. No significant capex in FY27: Management indicated no major capex planned for FY27, only routine maintenance capex. Strategic order execution over next 3 quarters: The remaining strategic order book (₹1,600 Cr) is expected to be executed over the next three quarters.

Risk read

Key risks include Component supply chain pressure — Surging global AI demand is putting pressure on component prices and supply chains, which could impact margins if not passed through.; Execution delay in strategic orders — Analyst noted that no large order wins or L1 announcements were made in recent quarters, raising concerns about pipeline conversion.; Margin compression from product mix shift — Despite higher base business share, gross margins did not improve sequentially, indicating potential margin pressure from AI segment mix..

Promise ledger

Scorecard data is being built as historical quarters are processed.