HCLTech Reports $3.7B Revenue and 131 bps Margin Expansion

Revenue grew 2.6% YoY to $3,724 million; EBIT margins reached 18.2% with a 131 bps sequential gain.

Reader Takeaway: Strong AI-led deal wins boost growth prospects, though macroeconomic volatility remains a key monitorable for margins.

What just happened

HCL Technologies has released its financial results, posting a revenue of $3,724 million, a 2.6% increase on a year-on-year basis. The company saw a massive surge in new deal bookings, which rose 27% to $3.3 billion. Operating margins (EBIT) showed improvement, climbing 131 basis points sequentially to reach 18.2%. The Board of Directors has declared an interim dividend of INR 12 per share, with a record date set for October 16, 2026.

Why this matters

The results highlight the company's successful pivot toward high-growth areas, particularly Advanced AI, which generated $219 million in revenue—a 78% YoY growth. While the HCLSoftware division reported an 11.2% revenue decline due to renewal timing, the underlying Annualized Run Rate (ARR) actually grew by 7.8%, signaling that the core software business remains healthy despite the temporary dip.

Margin drivers

The EBIT margin expansion was primarily driven by efficiency gains from 'Project Ascend,' which contributed 73 basis points, and enhanced productivity from Advanced AI services. Operating leverage further added 50 basis points, helping the company absorb restructuring costs and the integration expenses related to the HPE Telco Solutions acquisition.

Future outlook and risks

HCLTech has maintained its FY27 revenue growth guidance of 2.5% to 4% at the company level. Management remains cautiously optimistic, citing a fluid macroeconomic environment that continues to influence discretionary IT spending. Key watch points include the normalization of free cash flow after one-time tax payments and the successful integration of newly acquired entities like the Croatia-based Robotiq.ai.