HCLTech Q1 Highlights: Net profit rises 20% on record AI booking; headcount declines by 3,292 employees

HCLTech's EBIT margin expanded to 16.9% during the quarter, improving by 39 basis points sequentially and 56 basis points from a year ago despite restructuring costs.

“Excluding the impact of restructuring costs, EBIT margin and Net Income margin stood at 17.5% and 13.8%, respectively,” Shiv Walia, Chief Financial Officer of HCLtech said.

" We remain focused on further improving capital efficiency and are pleased to report LTM ROIC of 40.7% for the company, up 257 bps YoY, and 47.8% for the Services business, up 260 bps YoY,” Walia added.

Read more: HCLTech Q1FY27: 5 key highlights from record $2.4 billion deal wins to sharp drop in headcount 

HCL Tech reported aits EBIT margin for the June quarter at 16.9% rising 56 basis points YoY and 39 basis points QoQ. Here's a snapshot of the company's financial statement

Sequentially the company's employee count saw a sharp decline as it fell 1.4% translating into a decline of 3,292 at 223,889 reported in Q1FY26 from 227,181 reported in Q4FY26.

For the quarter ended June 30, 2026 the company's total people count stood at 223,889 against 223,151 reported in Q1FY26. This translates into a net decline 151 employees YoY

However, sequentially the headcount has declined by 3,292 employees compared to Q4FY26

In Q1FY27 the company added 1,056 freshers lower than 1,984 added in Q1FY26. The company's attrition for the last twelve months stood at 12.7%. The company's women employee percentage at 29.6%

“HCLTech delivered a steady Q1 FY27 performance, with revenue growth of 13.9% YoY, EBIT growth of 18.0% YoY and Net Income growth of 20.3% YoY. Excluding the impact of restructuring costs, EBIT margin and Net Income margin stood at 17.5% and 13.8%, respectively. Our cash generation continues to be robust, with OCF/NI at 111%, reflecting the strength and resilience of our business model. We remain focused on further improving capital efficiency and are pleased to report LTM ROIC of 40.7% for the company, up 257 bps YoY, and 47.8% for the Services business, up 260 bps YoY,” said Shiv Walia, Chief Financial Officer of HCLTech.

“We recorded our highest ever Q1 net-new bookings of $2.4Bn and our Advanced AI business grew 10.6% QoQ and 62.1% YoY in constant currency terms. These demonstrate that enterprises are choosing us to lead their AI-led transformation. Combined with the operational efficiencies visible in margin expansion, this momentum gives us the confidence we're positioned to keep outpacing the market over the medium term,” said C Vijayakumar CEO & Managing Director of HCLTech.

Commenting on the financial performance, Roshni Nadar Malhotra Chairperson of HCL Technologies, said, “AI is accelerating the transformation of global enterprises and unlocking new growth vectors for HCLTech. With our differentiated portfolio, we continue to demonstrate our ability to help clients leverage technology to drive their business strategies. We also remain focused on upskilling our people in emerging technologies and are embedding AI across the organization.”

The company derived majority of its revenue from its IT and business segment. Here's the revenue reported for its segments and growth for Q1FY27:

IT and Business services revenue: Rs 26,049 crore, up 16% YoY

Engineering and R&D services revenue: Rs 5,690 crore , up 10% YoY

HCL Software revenue: Rs 2,840 crore, up 4% YoY

On a sequential basis, HCL Tech's consolidated revenue advanced nearly 2% from Rs 33,981 crore reported in Q4FY26. The company's net profit increased by 3% from Rs 4,488 crore reported in the trailing quarter.

HCL Tech's consolidated net profit for April-June quarter was posted at Rs 4,624 crore, jumping over 20% from Rs 3,843 crore reported in the same quarter last year.

The IT major reported its consolidated revenue from for Q1FY27 at Rs 34,579 crore rising nearly 14% year-on-year from Rs 30,349 crore reported in Q1FY26.

The board has fixed the record date of July 17, 2026 to ascertain shareholder eligibility for dividend pay-out, and the payment date of the said interim dividend shall be July 27, 2026.

The company's board has announced an interim dividend of Rs 12 per share for Q1FY27.

" The Board of Directors has declared an Interim Dividend of Rs. 12/- per equity share of Rs. 2/- each of the Company for the Financial Year 2026-27.," HCL Tech said in its exchange filing.

BNP Paribas expects HCLTech to report a weak first quarter, with services revenue likely to decline 1.5% quarter-on-quarter (QoQ) in constant currency due to stronger-than-usual seasonal weakness. The brokerage also expects the software business to contract 5% QoQ on seasonal trends. "On the overall, we expect revenue to decline by 1.8% QoQ."

On profitability, BNP Paribas expects the services EBIT margin to decline around 50 basis points (bps) to 15.7%, while the software business margin is likely to expand by about 150 bps on seasonal factors.

Overall, the brokerage expects HCLTech's EBIT margin to improve around 20 bps QoQ to 16.7%, supported by favourable cross-currency movements, although gains may be partly offset by client productivity pass-throughs.

Deven Choksey Research expects HCLTech to report a weak Q1FY27, with US dollar revenue likely to decline around 2% quarter-on-quarter (QoQ) to about USD 3.61 billion, below the Street's expectation of a 0.6%-1.2% constant currency decline.

The brokerage attributed the weaker performance to discretionary spending cuts by two major US telecom clients, discontinuation of SAP programmes in the manufacturing and retail segments, seasonal weakness in software licence revenue, and delayed deal ramp-ups amid macro uncertainty arising from the West Asia conflict.

Rupee revenue is projected to rise 0.3% sequentially to Rs 34,097.3 crore, supported by the depreciation of the rupee against the US dollar. Deven Choksey also expects EBIT margin to improve by around 23 basis points sequentially to 16.8%, aided by operational efficiencies under Project Ascent and favourable currency movements. However, continued investments in artificial intelligence (AI) and employee restructuring costs are likely to partially offset these gains.

The brokerage estimates adjusted net profit at Rs 4,472.9 crore, down 0.3% sequentially but up 16.4% year-on-year.

HCLTech may raise its FY27 revenue growth guidance to 1.5-4.5% from 1-4% earlier, while the IT services guidance is seen improving to 2-5% from 1.5-4.5%, according to Anand Rathi.

This will be supported by the company's recently signed $1.14 billion, five-year mega deal. Margins are expected to remain under pressure from wage hikes and AI-led productivity pass-throughs, although the roll-off of the restructuring charge booked in the previous quarter could provide some support.

Anand Rathi expects HCLTech to report a subdued Q1FY27, with IT services revenue likely to decline 0.5-0.0% quarter-on-quarter (QoQ) in constant currency, while overall revenue is estimated to fall 1-1.5% QoQ due to seasonal weakness, delays in deal ramp-ups and continued softness in manufacturing, US healthcare and the Middle East.

Axis Securities expects HCLTech to report a mixed set of Q1FY27 results, with revenue likely to grow 3.5% sequentially to Rs 35,184 crore, supported by rupee depreciation. However, growth may be partly offset by headwinds in client-specific accounts and seasonal weakness in the software business.

"EBIT margins are expected to decline by 40 bps QoQ due to restructuring costs and higher investments," Axis Securities noted.

HCL Tech's stock ended Monday's trade on NSE at Rs 1,221.20, up 5%. Over the past one month the IT firm's share price has delivered a return of nearly 9%, while over the past six months it has declined by 27%.

Over the past one year, HCL Tech's stock has fallen by 25%. However, over the past five years it has increased by 24%.

In the previous financial year, hiring was cautious due to AI. However, IT bellwether TCS hired more than 9,000 employees in Q1 FY27, released on July 9. Now, all eyes are on HCLTech to gauge the hiring sentiment among large IT services firms.

In the previous quarter, HCLTech reported a marginal 0.35% sequential increase in headcount, with its total headcount standing at 227,181 employees, up by 802 sequentially from 226,379 in the December quarter. The company's attrition rate in Q4 FY26 stood at 12.5%. On a full-year basis, headcount grew only 1.7%.

"HCL Tech expected to maintain its guidance," said Systematix Institutional Equities.

The brokerage expect HCLTech's constant currency (CC) revenue to decline 0.9% quarter-on-quarter (QoQ), weighed down by seasonal weakness and client-specific issues. Revenue from the HCL Software business is also likely to decline sequentially.

JM Financial expects HCLTech to report a 1.2% quarter-on-quarter (QoQ) decline in constant currency (CC) revenue for Q1FY27. After factoring in a 20 basis points cross-currency headwind, the brokerage estimates revenue to decline 1.4% sequentially in US dollar terms, largely due to seasonal weakness in the services portfolio.

The IT services business is expected to contract 1.5% QoQ in constant currency, while the company is likely to report an order book of around $2.2-2.3 billion during the quarter.

On profitability, JM Financial expects EBIT margin to improve by 40 basis points sequentially, supported by the depreciation of the Indian rupee and the absence of restructuring costs, although operating deleverage is expected to partially offset these gains.

HCLTech reported 4.2% YoY profit growth in the fourth quarter of FY26 at Rs 4,488 crore. Revenue from operations also increased 12.3% YoY at Rs 33,981 crore. Annualized Advanced AI revenues crossed $620 million in Q4. “Our #1 priority in FY27 is to ensure the company is positioned right to take advantage of AI opportunities for multi decade value creation,” CEO and MD, C Vijayakumar, said.

For FY27, HCLTech had provided revenue growth guidance of 1-4% YoY in constant currency terms.

The share price of HCLTech has surged 3.15% in the intraday trade. The stock has gained 7.28% in last one month. On year-to-basis, HCLTech has declined 26.53%.

In the previous quarter (Q4FY26), HCLTech announced a dividend of Rs 24 per share, taking its total dividend for FY26 to Rs 60 per share.

HCLTech in its regulatory filing said the company will also declare 2nd interim dividend along with audited financial results.

“The Board of Directors of the Company is scheduled to be held on July 13 to consider amongst others: 1) Un-audited Financial Results of the Company for the quarter ending June 30. 2) Declaration of 2nd interim dividend for the financial year 2026-27,” HCLTech said.

Greetings! The Q1 earnings season continues, with HCLTech set to announce its Q1FY27 earnings today after TCS announced its Q1 results on July 9.

Follow this live blog for real-time updates on HCLTech’s financial performance, dividend declaration, and key management insights.