HCL Technologies delivered a remarkable earnings beat for Q1 FY27, reporting a 20.32% year-on-year increase in consolidated net profit to ₹4,624 crore compared with ₹3,843 crore in the corresponding quarter last year. The IT major's consolidated revenue from operations rose 13.94% year-on-year and 1.8% quarter-on-quarter to ₹34,579 crore from ₹30,349 crore a year earlier, with revenue in US dollar terms standing at $3.65 billion, up 3.0% YoY but down 0.9% QoQ. Shares of HCL Technologies jumped 5.15% to settle at ₹1,224.00 on the NSE ahead of the earnings announcement, marking a significant recovery from the stock's 25% decline so far this year. The strong market response reflects investor confidence in the company's operational performance and growth trajectory.
HCL Technologies achieved its 'highest ever' Q1 net-new bookings of $2.4 billion, marking a significant increase from $1.936 billion in Q4 FY26, demonstrating strong client demand for AI-led transformation services. C Vijayakumar, CEO and Managing Director, highlighted that the Advanced AI business grew 10.6% sequentially and 62.1% year-on-year in constant currency terms, showcasing the company's leadership position in AI-driven enterprise solutions. Revenue from advanced AI stood at $171 million, up by 62.1% YoY and 10.6% QoQ in constant currency, while HCL won new deals worth $2,047 million during the quarter. As per Business Standard, the company recorded these demonstrate that enterprises are choosing us to lead their AI-led transformation. The robust bookings performance indicates strong momentum in the company's AI portfolio and positions HCL Tech well for sustained growth in the emerging AI services market.
Segment-wise performance showed robust growth across all business verticals. Revenue from the company's IT and Business Services business, which contributed 75.1% of revenue, posted 4.2% YoY constant currency growth. Engineering and R&D Services grew 0.3% YoY, while HCL Software revenue declined 5.3% YoY. Among industry verticals, Public Services recorded the strongest constant currency growth at 12.0%, followed by Retail & CPG (10.1%), Technology & Services (7.3%), Financial Services (5.3%) and Manufacturing (3.7%). Telecommunications, Media, Publishing & Entertainment declined 10.9% YoY in constant currency. Geographically, the United States remained HCLTech's largest market, contributing 56.0% of revenue and growing 2.9% YoY in constant currency, while Europe accounted for 27.6% of revenue and grew 0.1%, and India posted the fastest growth at 16.9% YoY.
EBIT rose 18.0% year-on-year, while the EBIT margin improved to 16.9%, up 39 basis points quarter-on-quarter and 56 basis points year-on-year. Excluding restructuring costs, EBIT margin stood at 17.5%, with net income margin coming in at 13.4% and adjusted net income margin at 13.8%. Free cash flow to net income (LTM basis) stood at 99%, while return on invested capital (ROIC) improved to 40.7%. According to the latest Bloomberg estimates, HCLTech's consolidated revenue is expected to rise 2% quarter-on-quarter to ₹34,326 crore versus ₹33,684 crore, with net profit also projected to increase 2% to ₹4,529 crore versus ₹4,446 crore. Shiv Walia, Chief Financial Officer, noted that EBIT margins expanded by 39 basis points sequentially and surged by 56 basis points year-on-year to 16.9%, with cash generation remaining robust at OCF/NI at 111%. The margin outlook has improved significantly, with EBIT margins expected to expand to 16.97% from 16.48% in the previous quarter.
The board declared an interim dividend of ₹12 per equity share for FY27, marking the 94th consecutive quarter of payouts and demonstrating the company's commitment to returning value to shareholders. The record date is fixed as July 17 with payment scheduled for July 27, ensuring that investors holding shares before this date will be eligible for the dividend. During the March quarter, HCL Technologies announced an interim dividend of ₹24 per equity share, while earlier in January, the company had declared a dividend of ₹12 per share. The company has already declared its first interim dividend of ₹24 per share for FY27, whose record date was April 5, 2026 and payment date was May 5, 2026. The board of directors will consider the proposal of second interim dividend for FY27 on July 13, 2026. These enhanced dividend declarations demonstrate the company's strong cash generation capabilities and consistent quarterly dividend payout policy.
Roshni Nadar Malhotra, Chairperson of HCLTech, noted that AI is accelerating the transformation of global enterprises and unlocking new growth vectors for the company. As per Business Standard, she emphasized that with our differentiated portfolio, we continue to demonstrate our ability to help clients leverage technology to drive their business strategies. C Vijayakumar highlighted that the momentum gives us the confidence that we're positioned to keep outpacing the market over the medium term, combining operational efficiencies with strong AI demand. Shiv Walia, CFO, reported that the company remains focused on further improving capital efficiency and is pleased to report LTM ROIC of 40.7% for the company, up 257 bps YoY, and 47.8% for the Services business, up 260 bps YoY. The company maintained its FY27 guidance of 17.5%-18.5% EBIT margin and 1%-4% constant currency revenue growth. HCL Tech's attrition rate increased marginally to 12.7% compared to 12.5% in the December quarter, while the total headcount reduced to 2.24 lakh from 2.27 lakh in the previous quarter, with 1,056 freshers added in the quarter. These enhanced operational metrics and strategic focus on AI position the company well for sustained growth in the competitive IT services landscape.
