HCLTech Reports Robust Year-Over-Year Revenue Growth of 3.7% in Q1 FY2026

HCLTech's Impressive Financial Performance in Q1 FY2026

HCLTech (NSE: HCLTECH), a leading global technology powerhouse, recently announced its financial results for the first quarter of the fiscal year 2026, ending June 30, 2025. During this period, the company witnessed a remarkable revenue growth of 3.7% year-over-year in constant currency, with total revenues reaching an impressive $3.55 billion, marking a 5.4% increase compared to the same quarter last year.

The company's EBIT margin stood at 16.3%, demonstrating effective operational management despite challenges such as reduced utilization rates and increased investments in Generative AI and Go-to-Market initiatives. The firm’s performance was predominantly driven by its digital services segment, which reported a significant 15.2% growth year-over-year, now constituting 41.6% of total service revenues.

C. Vijayakumar, CEO and Managing Director of HCLTech, noted, "We experienced solid revenue growth of 3.7% year-over-year, buoyed by strong performance in our services business, which saw a 4.5% increase in constant currency. Our operational margin was impacted by lower utilization and additional investments in Generative AI and GTM strategies. However, our AI offerings have been well received by clients, further strengthened through our collaboration with OpenAI."

The Engineering and R&D services area also performed robustly, indicating an 11.8% rise year-over-year. Furthermore, the Annual Recurring Revenue (ARR) from HCLSoftware hit $1.06 billion, reflecting a modest increase of 1.3% in constant currency.

Notably, during the quarter, HCLTech secured $1.8 billion in new deals, showcasing the strength and diversity of its operational portfolio. As a testament to its consistent performance, the company announced a quarterly dividend of ₹12 per share, marking the 90th consecutive quarter of dividend payments. For FY2026, HCLTech has also raised its revenue growth forecast to a range of 3.0%-5.0% and adjusted its EBIT margin outlook to 17.0%-18.0%.

In terms of sector performance, technology and services led the charge with a dramatic 13.7% year-on-year growth, closely followed by telecommunications, media, publishing, and entertainment, which grew by 13.0% year-over-year. Retail and consumer goods experienced an 8.2% bump, while financial services organized a 6.8% increase.

Geographically, the highest growth came from the 'Rest of the World' region, noting a 15.0% year-over-year increase, followed by Europe at 9.6%. The company also added 1,984 new employees during this quarter, reflecting its commitment to expanding its workforce, with a low attrition rate of 12.8%, one of the best in the industry.

The company’s strong cash generation capabilities are highlighted by an operating cash flow/net capital ratio of 129% and a free cash flow/net capital ratio of 121%. HCLTech also exhibited a significant improvement in return on invested capital (ROIC), which rose by 353 basis points year-over-year to 38.1%.

This quarter, HCLTech continued its role as a trusted partner for global enterprises, closing several significant contracts. For instance, a major US hospital chain selected HCLTech to modernize its IT operations and enhance patient outcomes through innovative solutions.

Additionally, a global payment technology firm chose HCLTech to accelerate its digital transformation efforts, while a prominent American consumer goods company expanded its collaboration with HCLTech for the implementation of SAP S/4HANA, optimizing operational efficiency and value delivery.

A global sports organization also partnered with HCLTech to develop an AI-driven feedback enhancement platform that transforms live broadcasting through dynamic analysis and real-time contextual insights.

In terms of accolades, HCLTech was recognized among the top-performing executive teams in Asia in the 2025 Extel rankings, with C. Vijayakumar named the top CEO and Shiv Walia earning recognition as the top CFO.

As companies increasingly lean into AI capabilities, HCLTech remains well-positioned for growth in this evolving landscape, thanks to its robust suite of services and commitment to innovation.