HCL Technologies posted a 20.3% year-on-year rise in net profit to ₹4,624 crore for Q1 FY27, beating analyst estimates. Despite record-high deal wins of $2.4 billion, the company's shares fell 1.5% as it reported a slight decline in quarterly revenue on a constant currency basis.
HCL Technologies announced its results for the first quarter of fiscal year 2027 on Tuesday, revealing a mixed performance that led to a 1.50% drop in its share price to ₹1,204.80 on the National Stock Exchange. The company reported a net profit of ₹4,624 crore, marking a 20.3% increase compared to the same period last year. Revenue for the quarter rose by 13.9% to ₹34,579 crore.
Record Deal Wins and AI Expansion
The IT services provider secured its highest-ever quarterly deal wins, with net-new Total Contract Value (TCV) bookings reaching $2.4 billion. A key part of the company’s forward-looking strategy includes a ₹3,500 crore investment to build an artificial intelligence data centre business. This facility is expected to scale up to a capacity of 50 MW, reflecting the company’s push into sovereign AI services. While these bookings suggest strong future demand, investors noted a 0.5% quarter-on-quarter revenue decline on a constant currency basis, which may be contributing to the stock's recent price pressure.
Operational Trends and Guidance
Operational data shows the company is maintaining efficiency in a tight labor market. By the end of June, the company’s total headcount stood at 223,889, reflecting a reduction of 3,292 employees during the quarter. The attrition rate remained at 12.7%, while the firm also reported a decrease in the hiring of fresh graduates. For the full fiscal year 2027, HCL Technologies has kept its guidance unchanged. It expects constant currency revenue growth to remain between 1% and 4%, with Earnings Before Interest and Taxes (EBIT) margins targeted between 17.5% and 18.5%.
Market and Analyst Perspective
Brokerages have offered varied views following the results. Nomura reiterated a 'Buy' rating and raised its target price to ₹1,290, pointing to the company's strong deal momentum and AI strategy as key strengths. Conversely, other firms such as Antique, Capital 360 One, and Systematix maintained 'Hold' ratings, with target prices ranging from ₹1,180 to ₹1,225. These analysts acknowledged the better-than-expected results but noted the broader challenges currently facing the IT services sector.
Investors will likely track the actual execution of the new AI data centre project and whether the company can sustain its deal-winning momentum in the coming quarters. Monitoring the trend in revenue growth on a constant currency basis will also be essential to determine if the company can outpace peers despite the industry-wide pressure on discretionary spending.