HCL Technologies Q1 FY27 Results (NSE: HCLTECH)
Signal: Steady quarter
The read
Revenue growth accelerated to 13.9% YoY, the fastest in six quarters, driven by a strong 16% YoY increase in IT & Business Services. PAT grew 20.3% YoY, outpacing revenue, while OPM held flat at 20%. The ITBS segment showed strong operational leverage (segment profit +30% YoY), but ER&D and Software margins contracted. Interim dividend of ₹12 per share declared. Jaspersoft acquisition closed on 1 July 2026, to be consolidated next quarter.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹34,579 Cr | 13.9% | 1.8% |
| EBIT | ₹6,192 Cr | 14.7% | |
| Net profit | ₹4,624 Cr | 20.3% | |
| EPS | ₹17.09 | 20.5% | |
| EBIT margin | 20% |
P&L walk
Revenue growth accelerated to 13.9% YoY, the highest in six quarters, driven by IT & Business Services (+16% YoY). Operating margin (OPM) stayed flat at 20% YoY as lower depreciation and finance costs offset higher employee cost (+11.9% YoY) and outsourcing costs (+23.4% YoY). PAT grew 20.3% YoY, outpacing revenue, aided by other income decline being less than proportional.
Segments
IT & Business Services revenue grew 16% YoY and segment profit surged 30% YoY, driving the consolidated result; Engineering & R&D revenue grew 10% but profit declined 3% YoY; HCL Software revenue grew 4% but profit fell 17% YoY due to investments in AI and product development.
Key positives
- Revenue growth of 13.9% YoY – highest in 6 quarters, accelerating from 12.3% in Q4FY26.
- IT & Business Services revenue up 16% YoY and segment profit up 30% YoY, showing operational leverage.
- PAT growth of 20.3% YoY, well above revenue growth, aided by lower finance costs and effective tax rate.
- EPS grew 20.5% YoY to ₹17.09, with no dilution.
- Interim dividend of ₹12 per share (yield ~3.6% annualised at CMP).
Key concerns
- Operating margin flat at 20% YoY – no expansion despite revenue acceleration.
- Engineering & R&D segment profit declined 3% YoY, margins under pressure.
- HCL Software segment profit fell 17% YoY, indicating heavy investment phase.
- Employee costs grew 11.9% YoY and outsourcing costs 23.4% YoY, pressuring margins.
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