HCLTech Q1 Results: Posts earnings beat, retains FY27 guidance; headcount falls by 3,300

HCLTechnologies retained its FY27 guidance after reporting June-quarter earnings that beat CNBC-TV18 estimates on profit, revenue and margins after market hours on Monday, July 13.

The IT major continues to expect constant currency revenue growth of 1%-4% and an EBIT margin of 17.5%-18.5% for FY27.

Consolidated net profit rose 20.3% year-on-year to ₹4,624 crore, higher than the CNBC-TV18 poll estimate of ₹4,588 crore. Revenue from operations increased 14% to ₹34,579 crore, above the poll estimate of ₹34,338 crore.

Dollar revenue came in at $3.65 billion, compared with the CNBC-TV18 poll estimate of $3.633 billion. Constant currency revenue declined 0.5% sequentially, versus the poll estimate of a 1.1% decline.

Revenue from operations rose 14% year-on-year to ₹34,579 crore from ₹30,349 crore a year earlier. In dollar terms, revenue declined 0.9% sequentially to $3.65 billion, compared with Street expectations of a 1.3% decline, while constant currency revenue fell 0.5% quarter-on-quarter, against estimates of a 1% decline.

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EBIT stood at ₹5,831 crore, ahead of the CNBC-TV18 poll estimate of ₹5,782 crore, while the EBIT margin expanded to 16.86% from 16.5% in the March quarter and was marginally above the poll estimate of 16.8%.

Segment-wise, revenue from the company's IT and Business Services business rose to ₹26,049 crore from ₹22,454 crore a year ago. Engineering and R&D Services revenue increased to ₹5,690 crore from ₹5,174 crore, while HCL Software revenue grew to ₹2,840 crore from ₹2,721 crore.

The company reported its highest-ever first-quarter net new bookings, with total contract value (TCV) of $2.41 billion, compared with $1.94 billion in the March quarter.

HCLTech said its Advanced AI business continued to gain momentum, with revenue growing 10.6% quarter-on-quarter and 62.1% year-on-year in constant currency terms.

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Employee attrition on a last-twelve-month basis stood at 12.7%, compared with 12.5% in the March quarter. Headcount declined by 3,292 employees sequentially to 223,889.

The board declared an interim dividend of ₹12 per equity share for FY27. The record date has been fixed as July 17, while the dividend will be paid on July 27. The company also completed the acquisition of Jaspersoft, a business unit of Cloud Software Group, on July 1 following regulatory approvals.

Shares of HCL Technologies ended 5.15% higher at ₹1,224 ahead of the earnings announcement. The stock has declined 25% so far this year.