HCLTech Projects Muted FY27 Growth Following Fastest Expansion in Three Years

HCL Technologies Reports Fastest Revenue Growth in Three Years, but Guides for Slower Outlook

HCL Technologies Ltd closed the previous fiscal year (FY26) with its fastest revenue growth in three years, but flagged a slower outlook for the current fiscal year amid an uncertain demand environment. The country's third-largest information technology (IT) services company clocked 5.95% year-on-year (y-o-y) growth in consolidated revenue to $14.66 billion, beating a Bloomberg estimate of $14.1 billion.

Net profit fell 4.05% y-o-y to $1.96 billion, compared to a rise of 7.6% in FY25. Despite the encouraging top line performance, the Noida-headquartered company appeared cautious about the current fiscal year, guiding for revenue growth of 1-4% in constant currency terms, broadly in line with its current constant currency growth of 3.9%. Constant currency does not account for currency fluctuations.

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The company gets a little more than half of its revenue from US-based clients, while about a fourth comes from European clients. Much of its overall revenue growth in FY26 was fuelled by financial institutions, which make up a little more than a fifth of its total revenue. HCLTech's business fundamentals remain strong, but the company is facing two client-specific challenges in the Americas, which will create a headwind of approximately 50 basis points to growth in FY27.

External factors such as the West Asia conflict and the rise of automation tools could further weigh on demand for Indian IT outsourcers, as large global clients prioritise core spending and trim discretionary technology budgets. The company's guidance for FY27 is also lower than its initial outlook for FY26. In April last year, it had guided for full-year revenue growth of 2–5% in constant currency terms.

Revenue from the company's software product business declined 2.8% y-o-y to $1.39 billion. HCLTech reported annualised advanced AI revenue of $620 million, which is classified as revenue from agentic AI, AI factories, and physical AI. Another area of concern was the company's operating margin, which at 17.9% was 110 basis points lower compared to FY25.

The company expects lower profitability going forward. Its management guided for operating margins between 17.5% and 18.5% for the full-year, lower than the 18-19% expectations issued at the start of the last year. HCLTech shares jumped 0.92% on the BSE to ₹1,441.55 on Tuesday. The results were announced after market hours.

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The company increased its headcount by 3,761 to end last year with 227,181 employees. Much like its peers, the management shied away from giving a hiring target, insisting on looking at hiring on a quarterly basis.