HCLTech Reports Strong 3.7% Revenue Growth in Q1 FY26 Amid Market Dynamics

HCLTech Achieves Impressive Revenue Growth in Q1 FY26



HCLTech, a prominent global technology player, has reported a robust revenue growth of 3.7% year-over-year in the first quarter of the fiscal year 2026, demonstrating its strong market presence. The company’s financial performance for the quarter ending June 30, 2025, highlighted its resilience and adaptability in an evolving business landscape.

Financial Overview


In Q1 FY26, HCLTech recorded a total revenue of $3.55 billion, reflecting a 5.4% increase from the previous year when translated to USD. The constant currency growth indicates that the company maintained a steady pace amid fluctuating market conditions. The EBIT margin for this period stood at a notable 16.3%, primarily influenced by new investments and a slight decrease in utilization.

The digital services sector, a crucial growth driver for HCLTech, surged by 15.2% in constant currency terms, contributing to a substantial 41.6% of overall service revenue. Engineering and R&D services also indicated strong performance, marking an 11.8% increase compared to the previous year. HCLSoftware’s annual recurring revenue reached $1.06 billion, reflecting a 1.3% growth in constant currency.

The company’s order book remained vibrant and varied, with new contract signings totaling $1.8 billion in the quarter, displaying robust demand from multiple sectors.

Strategic Improvements


HCLTech also declared a dividend of ₹12 per share, marking the 90th consecutive dividend payment in its financial history. The company adjusted its growth forecast for FY26 upwards to 3.0% - 5.0%, coupled with an enhancement in its EBIT margin expectation to 17.0% - 18.0%.

C Vijayakumar, the CEO and Managing Director of HCLTech, expressed satisfaction with the company’s performance, stating that the revenue growth reflects a successful service business strategy, bolstered by a 4.5% growth year-over-year at constant currency. HCLTech’s operational edge is strengthened by a robust pipeline and a steady demand environment.

Market Segmentation Growth


When analyzing industry-specific growth, HCLTech saw notable increases in technology services, with a staggering 13.7% growth in constant currency. The telecommunications, media, publishing, and entertainment sectors followed closely with a 13.0% increase. Retail and consumer goods saw an 8.2% rise, while financial services recorded a 6.8% growth.

Geographically, the Global Rest region delivered the strongest performance with a notable 15.0% growth in constant currency, while Europe showed promising results at 9.6%.

Workforce Expansion


During this quarter, HCLTech expanded its workforce by hiring 1,984 new employees, maintaining a lower attrition rate of 12.8%, which is considerably below the industry average. This strategic hiring aligns with the company’s commitment to driving innovation and expanding its service capabilities.

Cash Flow and Capital Efficiency


The quarterly cash generation reflects a healthy financial model, with an operating cash flow to net income ratio of 129% and a free cash flow to net income ratio standing at 121%. This robust cash flow is indicative of HCLTech's underlying business strength. The company's long-term return on invested capital (ROIC) improved by 353 basis points year-over-year to 38.1%, while the services segment reached an ROIC of 45.2%.

Noteworthy Contracts


In Q1 FY26, HCLTech has strengthened its reputation as a trusted partner for numerous global enterprises. Significant contracts concluded include:
  • - A leading U.S. hospital chain selecting HCLTech for modernizing its IT operations and enhancing patient outcomes through innovative solutions.
  • - A global payment provider collaborating with HCLTech to accelerate digital transformation across its operations and improve customer experiences.
  • - A U.S. consumer goods firm expanding its strategic partnership with HCLTech for the implementation of SAP S/4HANA.
  • - A major sports federation partnering with HCLTech to develop a GenAI-based platform for enhancing live sports commentary through AI-driven insights.

Recognitions and Achievements


HCLTech was acknowledged among Asia’s leading executives in the 2025 Extel Ranking, achieving multiple top placements in various categories within the technology, IT services, and software sectors. C Vijayakumar was recognized as the best CEO, while Shiv Walia was honored as the top CFO across multiple categories. HCLTech's chairwoman, Roshni Nadar Malhotra, received accolades for her leadership at an annual gala hosted by the American India Foundation. The company also secured the highest honor at the AWS GenAI Premier League Awards 2025 for its contributions to productivity and industry transformation.

HCLTech continues to stand out as a robust player in the technology sector, facilitating growth and innovation through its diverse portfolio and dedicated workforce. As it navigates through the complexities of the market, HCLTech is poised for further successes in the upcoming quarters.

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Topics Business Technology)

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