HCLTech Q1 Profit Down 10%, Revenue up 8.2% on Stable Demand The attrition rate, on a last twelve-month basis, remained flat at 12.8 per cent on an annual basis and marginally declined from 13 per cent in the preceding three months.
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HCLTech on Monday forecast a revenue growth guidance of 3-5 per cent in constant currency for FY26 on the back of a promising demand environment. The Noida-based IT services major HCLTech reported a net profit of INR 3,843 crore for the first quarter ended June, down nearly 10 per cent from a year ago.
The revenue for the June quarter was up 8.2 per cent in constant currency from the year-ago period to INR 30,349 crore, in a seasonally soft quarter. The revenue in dollar terms declined 0.8 per cent sequentially in constant currency to USD 3.54 billion while the total contract value (TCV) of deals for the first quarter stood at USD 1.81 billion.
"We had healthy revenue growth of 3.7% YoY supported by good performance in our Services business with 4.5% YoY growth in constant currency. Our operating margin came at 16.3%, impacted by lower utilization and additional Gen AI and GTM investments. Our AI propositions are resonating well with our clients and have been augmented further by our partnership with Open AI. Our pipeline continues to grow as the demand environment was stable during the quarter," said C. Vijayakumar, CEO & Managing Director, HCLTech.
"The environment remained stable and didn't deteriorate as expected in the earlier quarters," Vijayakumar told in a media earnings call. "We continue to win more deals in the digital and engineering space."
The Indian IT services industry has been facing challenges over the past few quarters due to continued caution around discretionary spending, delayed decision-making, and tighter project scrutiny weighing on deal ramp-ups and execution.
Operating margins for the June quarter narrowed to 16.3 per cent from 17.1 per cent in the corresponding quarter of the previous year and 17.9 per cent in preceding three months.
The attrition rate, on a last twelve-month basis, remained flat at 12.8 per cent on an annual basis and marginally declined from 13 per cent in the preceding three months. It reported a net headcount decline of 269 employees taking the total strength to 223,151 employees as of the June quarter.
"HCLTech experienced muted constant currency growth in Q2 2025, as cautious client spending and economic uncertainty slowed new business investments globally, particularly in North America and Europe. Despite margin pressures and modest revenue gains due to market volatility and tighter discretionary budgets, HCLTech maintained steady growth, supported by strong deal wins and ongoing investments in AI, GenAI, and digital transformation," said Biswajit Maity, Senior Principal Analyst at Gartner.
"They increased their focus on AI, with offerings resonating with clients and positioning the company for growth, further supported by partnerships like OpenAI. The company's focus on workplace innovation, contractual delivery commitments, and sustainable, cloud-based solutions continues to reinforce its reputation as a reliable IT partner, helping clients navigate change and achieve long-term transformation objectives," added Maity.
HCLTech declared its results on Monday after markets hours. Ahead of the results, shares of the company closed down 1.41 per cent at INR 1,614 on the BSE.
