HCL Technologies on Monday reported a 9.7% year-on-year drop in consolidated net profit for the first quarter of FY26 to Rs 3,843 crore, impacted by higher expenses and a one-time hit from a client bankruptcy. The company, however, raised the lower end of its revenue growth outlook for the full fiscal, citing a stable demand environment and expectations of stronger deal bookings in the coming quarters.The IT services major had posted a net profit of Rs 4,257 crore in the corresponding quarter last year, according to a regulatory filing.Revenue from operations rose 8.1% to Rs 30,349 crore, compared with Rs 28,057 crore in the same quarter of FY25, PTI reported. Growth was led by technology and services (13.7%), telecom and media (13%), retail and CPG (8.2%), and financial services (6.8%).“We had healthy revenue growth of 3.7% YoY supported by good performance in our Services business with 4.5% YoY growth in constant currency. Our operating margin came at 16.3%, impacted by lower utilisation and additional Gen AI and GTM investments,” HCLTech CEO and MD C Vijayakumar said during the earnings call.He said the company’s AI offerings are resonating well with clients and have been further strengthened through a partnership with OpenAI. The company is also investing in an AI-driven data lifecycle management platform, he added.The first quarter saw a 10.7% sequential fall in net profit, while revenue rose marginally by 0.3%. Total expenses grew 9.2%, driven by higher employee benefit costs, outsourcing and finance costs.Vijayakumar announced plans for a restructuring programme focused on “both the people and non-people side,” aimed at improving structural agility in the AI era. The plan includes optimisation of unutilised facilities, mostly outside India, and talent ramp downs in some overseas geographies. “On the restructuring program, our objective is to get back to our 18% to 19% margins. There will be incremental costs involved in achieving this. That is also the reason we have taken our guidance to be a little lower this year,” he explained.The company experienced a 20 basis point one-time impact due to a client bankruptcy during the quarter. In addition, a large financial services consolidation deal was not included in the Q1 total contract value (TCV), while two other large deals faced procedural delays and are now expected to reflect in Q2.Following a better-than-expected Q1 performance, HCLTech has revised its constant currency revenue growth guidance for FY26 to 3–5%, from the earlier 2–5%.“The growth guidance is motivated by a better performance in Q1, and the company is optimistic of meeting the guidance, supported by superior revenue growth and positive booking expectations from the upcoming quarters,” Vijayakumar said.The company’s headcount stood at 223,151 at the end of the quarter, down 269 employees sequentially. It added 1,984 freshers during the quarter.Chief People Officer Ram Sundarajan said fresher intake in Q2 will be significantly higher year-on-year and focused more on specialisation rather than volume. “The percentage of freshers that we are now bringing on board through specialisation is gradually increasing,” he said, adding that elite cadre freshers in services earn up to three times the regular pay, and in software, up to four times.The company’s board declared an interim dividend of Rs 12 per share for FY26. The record date for the dividend is July 18, 2025, and the payment date is July 28, 2025.Shares of HCLTech closed 1.04% lower at Rs 1,619.95 on the BSE. The Q1 results were announced after market hours.
