Investors on Dalal Street have been closely monitoring the spate of IT companies September 2025 quarterly results that have been released this week. The above development comes at a time when stocks like HCL Tech and Tech Mahindra have been hovering above their 52-week lows for nearly six months.
A Tale of Two Quarters: HCL Tech Pulls Ahead
Tech Mahindra on late Tuesday evening reported a 1.6% quarter-on-quarter growth in revenues in constant currency terms to Rs 13,949.9 crore in the September 2025 quarter.
In the case of Tech Mahindra, its key communications vertical was sluggish, it was 32.7% of revenues in the September 2025 quarter, a decline of 2% q-o-q.
Earlier, HCL Tech has highlighted that its revenue was up 2.4 % quarter-on-quarter in constant currency terms in the September 2025 quarter to Rs 31, 942 crore.
HCL Tech in the September 2025 quarter benefited from a pick-up in the public services vertical, which includes energy and utilities, logistics and government. This segment accounted for 8.9% of its revenues in the September 2025 quarter vis-à-vis 8.5% in the June 2025 quarter. The Noida-based company benefited also from a pick-up in the life sciences and healthcare segment coupled with the Rest of the World segment – business generated outside US, Europe and India.
And Tech Mahindra’s core operating profit margin improved 100 basis points q-o-q to 15.5 % in the September 2025 quarter.
Similarly, HCL Tech’s core operating profit margin basis points rose 60 points q-o-q to 20.5% in the September 2025 quarter.
Margin improvement for HCL Tech was helped by employee expenses as a percentage of revenues at 57.3% in the September 2025 quarter vis-à-vis 58% in the June 2025 quarter.
At Tech Mahindra also employee expenses as a percentage of revenues was 54.5 % in the September 2025 quarter vis-à-vis 56.2% in the June 2025 quarter.
Meanwhile, HCL Tech net profit rose 10.2% q-o-q to Rs 4,236 crore in the second quarter of FY26. And Tech Mahindra’s net profit rose 6.5 % y-o-y o Rs 1201.7 crore in the September 2025 quarter.
With regard to future growth opportunities, Tech Mahindra TCV (new deal wins) was $ 816 million in the September 2025 vis-à-vis $ 809 million in the June 2025 quarter.
And HCL Tech TCV (new deal wins) was at $2.57 billion in the September 2025 quarter, up 41.8% q-o-q.
The Street will be keeping a close eye on these new deal wins how quickly they will translate into revenue for IT companies over the next few quarters.
The Talent War: Contrasting Headcount Trajectories
Tech Mahindra’s IT head count at the end of the September 2025 quarter was 78,528 employees slightly lower than 79,987 recorded at the end of the June 2025 quarter.
HCL Tech’s head count at the end of the September 2025 quarter was marginally higher at 226,640 vis-à-vis 223,151 at the end of the June 2025 quarter.
AI-related
HCL Tech Advanced AI quarterly revenue crossed $ 100 million (nearly Rs 880) crore in the September 2025 quarter. (not given the corresponding figure for June 2025 quarter)
Tech Mahindra has highlighted that it had 300+ AI Agents at Scale – TechM’s Agentic AI portfolio powers hybrid workforces across industries via-a-vis 200+ AI Agents at Scale at the end of the June2025 quarter.
Globally, AI- is driving growth in the IT sector and Indian investors will also be monitoring AI-revenue growth for Indian IT service companies.
Guidance Divergence: A Glimpse into FY26
HCL Tech has marginally raised its growth guidance – it expects its services revenue growth to be between 4-5 % y-o-y in constant currency during FY26 vis-à-vis its forecast at the end of the June 2025 quarter of 3-5 % in constant currency terms for FY26.
Tech Mahindra has not provided a specific growth outlook.
Valuations and Investors on Dalal Street
Tech Mahindra results were declared after Tuesday trading got over, and the stock closed on Tuesday 1.2% higher at Rs 1,468.2. It is hovering above its 52-week low of Rs 1,209.7 that was reached on 7 April 2025. Tech Mahindra trades at a P/E of 28 times estimated consolidated FY26 earnings.
HCL Tech results were declared after the close of Monday trade and on Tuesday, the stock was broadly flat at Rs 1,495. HCL Tech stock trades just above its 52-week low of Rs 1,304 that was reached on 7 April 2025. HCL Tech trades at a P/E of 24 times estimated consolidated FY 26 earnings.
Investors on Dalal Street are still waiting for clearer signs of a sustained strong pick-up in IT spending, given the cuts in interest rates by the Federal Reserve. However, the current US government shutdown and tariff war of the Trump administration has made that difficult to predict.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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