Forbes India
HCL Technologies on Tuesday reported a 4.2 percent year-on-year increase in consolidated net profit to Rs4,488 crore for the January-March quarter (Q4 FY26), supported by continued traction in its artificial intelligence (AI)-led offerings.Revenue from operations rose 12.3 percent to Rs33,981 crore in the quarter, while, in dollar terms, it stood at $3.68 billion—up 5.3 percent year-on-year but down 2.9 percent sequentially. In constant currency terms, revenue declined 3.3 percent quarter-on-quarter. The company said in its release that performance was impacted by “lower discretionary spend and delayed decision-making”.For the full year ended March 31, the company reported revenue of Rs130,144 crore, up 11.2 percent year-on-year, while net profit stood at Rs17,361 crore, down 0.2 percent.AI grows, but core business faces deflationHCLTech said its annualised “Advanced AI” revenue crossed $620 million during the March quarter, with $155 million recorded in the quarter itself, up 6.1 percent sequentially in constant currency terms.“Our new AI-led service offerings are getting traction in the market,” Chief Executive Officer and Managing Director C Vijayakumar said in the release.During the post-earnings briefing, Vijayakumar said AI is also beginning to influence deal sizes. “Something that was a $100 million deal could now be an $80 million deal because of the deflation,” he said. He added that demand remains steady but pricing is being reshaped by AI-led efficiencies, which are now embedded across most client engagements.The CEO added that the company now sees its business split across three segments: Traditional services, which are being disrupted by AI; services such as cloud, data and cybersecurity, which are being amplified; and AI-native offerings.Also Read: Wipro’s profit slips 1.9 percent in Q4 FY26; announces Rs15,000 crore buybackBookings hold, growth slowsHCLTech reported a total contract value (TCV) of $1.94 billion in the quarter, bringing its full-year deal wins to $9.3 billion, broadly unchanged from the previous year.“During the quarter, our performance came below our expectations due to softness in certain parts of our business due to lower discretionary spend and delayed decision-making,” Vijayakumar said.For the full year, constant currency revenue growth stood at 3.9 percent, even as bookings remained steady, reflecting the impact of delayed decisions and deal ramp-ups.Other IT firms have reported a similar gap between deal wins and revenue growth. Earlier this month, Tata Consultancy Services reported $2.3 billion in annualised AI revenues alongside a decline in dollar revenue, while Wipro reported flat constant currency growth despite higher large deal bookings (Wipro did not report AI revenue separately).Hiring remains steadyEarnings before interest and tax (EBIT) margin for the March quarter stood at 16.5 percent, down 10.6 percent sequentially but increasing 3.3 percent year-on-year. For the full year, EBIT margin was 17.2 percent. During the quarter, the company added 802 employees, taking its headcount to 227,181.Chief People Officer Ram Sundararajan said hiring will continue to be managed on a rolling basis rather than through fixed annual targets, while fresher hiring is expected to remain broadly in line with the previous year. The company hired 11,744 freshers during the year, compared with about 7,800 in the previous year. Attrition stood at 12.5 percent on a trailing 12-month basis, down from 13 percent a year earlier.FY27 guidanceFor FY27, the tech major expects overall revenue to grow in the range of 1 to 4 percent in constant currency terms. Services revenue is expected to grow between 1.5-4.5 percent.Vijayakumar said the wide guidance band reflects uncertainty in discretionary spending, with the lower end assuming continued softness and the upper end factoring in recovery and stronger deal wins.
Go to News Site