HCLTech Q2 FY26 Results: Profit Flat at ₹4,235 Crore, Revenue Rises 10.7% YoY

Noida, October 14, 2025: HCL Technologies Ltd (NSE: HCLTECH, BSE: 532281) posted a flat net profit at ₹4,235 crore in the year to September 30, 2025, with the revenue growing 10.7% year-on-year to ₹31,942 crore. The business of the company grew well, and the margins recovered due to healthy digital and engineering services driven by Artificial Intelligence (AI) demand.

Key Financial Highlights

HCLTech Ltd reported subdued Q2 FY26 performance led by accelerated sequential growth in strategic verticals. Revenue grew 5.2% QoQ to ₹31,942 crore in Q2 FY26 from ₹30,349 crore in Q1 FY26, growth of 10.7% YoY over ₹28,862 crore in Q2 FY25. EBIT grew 12.3% sequentially to ₹5,550 crore and margins rose 110 basis points to 17.4%.

Net earnings increased 10.2% QoQ to ₹4,235 crore but stayed flat on a year-on-year basis. The net margin of 13.3% increased 60 bps QoQ but declined 140 bps year-on-year due to margin normalization amid higher employee costs and deal costs.

The EBIT margin improved to 17.4%, reflecting operational efficiency gains despite a 55-basis-point restructuring cost impact. Revenue growth was propelled by digital and AI services, with “Advanced AI” revenue surpassing $100 million during the quarter.

Segment-Wise Performance

Segment-wise, the biggest contributor at 74.2% of revenues during the period remained IT & Business Services with 2.6% QoQ and 3.8% YoY constant currency (CC) growth. The segment had a healthy EBIT margin of 16.3%.

The Engineering and R&D Services segment also reported healthy growth with 2.2% QoQ and 13.4% YoY growth (CC), driven by strong digital engineering service demand. The segment EBIT margin stood at 17.5%.

HCLSoftware provided 9.1% of revenue and registered a slight 0.5% QoQ growth but 3.7% YoY decline, with margins remaining unchanged at 26.5%. Overall, the company’s total revenue grew 2.4% QoQ and 4.6% YoY in constant currency, maintaining a consolidated EBIT margin of 17.5% for the quarter. ARR of HCLSoftware stood at $1.06 billion, which grew by 0.6% over the previous year. Subscription and support revenues grew 8% over the previous year.

Business Momentum and Bookings

• Total Contract Value (TCV) of $2.57 billion increased 41.8% quarter-on-quarter and 15.8% year-on-year.
• It increased the people in the workforce by 3,489 to 226,640.
• LTM attrition declined to 12.6%, the lowest in recent quarters.
• Return on Invested Capital (ROIC) came in at 38.6%, an increase of 290.

Management Commentary

C. Vijayakumar, the CEO & MD, called the quarter “a standout across all fronts with strong execution and growing demand for AI-enabled solutions.” Moreover, he also referred to new bookings having crossed the $2.5 billion mark without any dependency on any sort of mega-deal, displaying balanced traction with customers.

Roshni Nadar Malhotra, Chairperson, cited repeated investments in new technologies and building talent as the strategic enablers of innovation despite having an unfavorable global environment.

Shiv Walia, CFO, also added, “We continue to be focused on improving capital efficiency with the firm’s LTM ROIC improving to 38.6% and healthy cash generation evidenced by an FCF/Net Income of 125%.”

Outlook

HCLTech reaffirmed FY26 guidance with revenue growth guidance of 3%–5% year-on-year in constant currency terms. The service revenue growth guidance for the year also remains 4% to 5% YoY, with EBIT margin guide unchanged at 17%–18%.

Dividend

The board declared a dividend of ₹12 per equity share, being the company’s 91st consecutive quarterly dividend payout, in line with its philosophy of timely returns to shareholders.

Share Price Response

Share͏s of HCL T͏echnol͏ogies Ltd trad͏e͏d margi͏nally hi͏gher ͏on ͏Tuesday, rising ͏0.͏55͏% to ₹1,502.90 as of 11:4͏4 a͏.m͏. IST, after th͏e company reporte͏d Q2 FY26 resu͏lts. The stock ope͏ned at ₹͏1,515.͏40, touched an ͏intr͏aday hi͏gh o͏f ₹1,5͏35.͏00, and slipped to a low o͏f ₹1,499.00, before stabilising ͏near ₹1,502.͏90. The company’s mark͏et capitalisation stood at ₹4.07 la͏kh c͏rore, with a price-to-earn͏ings (P/͏E) ratio of 24.02 and a divid͏end yield of 3.5͏9%.

REF: https://nsearchives.nseindia.com/corporate/HCLTECH_13102025174757_InvestorRelease_3.pdf

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