According to the latest financial results, Hinduja Global Solutions reported a consolidated net loss of ₹66.26 crore in Q1 FY27, significantly widening from the net loss of ₹46.33 crore recorded in the corresponding quarter of FY26. This represents a substantial deterioration in the company's financial performance compared to the previous year. The company's total income stood at ₹1,201.16 crore while total expenses rose to ₹1,253.93 crore, reflecting the operational challenges faced during the quarter.
The company's sales declined by 0.6% to ₹1,050.36 crore in Q1 FY27, compared to ₹1,056.23 crore in the corresponding quarter of the previous financial year. According to the latest reports, this marginal decline in revenue reflects the challenging operating environment and planned phase-outs of large client engagements that the company undertook during the quarter. Despite the operational headwinds, HGS made steady progress in expanding its client portfolio with 19 new logos in digital CX/tech solutions and eight in HRO/Payroll processing during the quarter, as noted by Global CEO Venkatesh Korla.
The company's operating profit margin (OPM) declined to -3.28% in Q1 FY27, compared to 2.72% in the same quarter of the previous year. Employee benefits expenses increased to ₹630.75 crore from ₹598.89 crore in Q1 FY26, reflecting continued investment in human capital. However, finance costs decreased to ₹45.53 crore from ₹57.89 crore, providing some relief to the bottom line. The company's EBITDA stood at ₹116.3 crore with a 9.7% margin, while PBDT (Profit Before Depreciation and Tax) decreased by 31% to ₹70.78 crore from ₹101.85 crore in the corresponding quarter of the previous year.
A significant development affecting the company is the ongoing General Anti-Avoidance Rule (GAAR) related income-tax proceeding. The Income Tax Department had directed the Deputy Commissioner of Income-tax to disregard the brought-forward losses of the demerged entity, NXT Digital, characterizing the arrangement as impermissible avoidance. This directive could result in a potential tax demand of ₹281.59 crore. However, HGS filed a writ petition before the Hon'ble Bombay High Court on November 7, 2025, and on December 19, 2025, the Court granted an interim stay on the implementation of the GAAR Panel's directive. Based on management's assessment and external legal advice, the company believes its position is tenable and has not recorded any adjustment in the current quarter's financial statements regarding this matter.
Despite the operational challenges, the Board of Directors approved a final dividend of ₹5 per equity share for the financial year 2025-26, subject to shareholder approval at the upcoming Annual General Meeting. The 31st Annual General Meeting (AGM) is scheduled for September 25, 2026, via Video Conferencing, with the register of members closed from September 19-21, 2026. Shareholders holding records as of September 18, 2026, will be eligible for the dividend, payable within 30 days of shareholder approval. Additionally, the Board approved the re-appointment of Mr. Amit Saharia as a Non-Executive Non-Independent Director and the incorporation of a wholly-owned subsidiary, HGS MENA IT Consulting L.L.C., in Dubai to strengthen its Middle East presence.
