Results Highlights:
• Revenue from operations up 11.51% YoY and 3.01% QoQ at ₹35,620 Cr (vs. ₹31,942 Cr YoY and ₹34,579 Cr QoQ), with Constant Currency (CC) revenue up 2.6% YoY and 2.3% QoQ.
• EBIT up 17.50% YoY and 10.87% QoQ at₹6,465 Cr (vs. ₹5,502 Cr YoY and ₹5,831 Cr QoQ).
• EBIT Margin stood at 18.15% vs. 17.22% YoY and 16.86% QoQ.
• Profit after Tax up 21.15% YoY and 10.94% QoQ at ₹5,132 Cr (vs. ₹4,236 Cr YoY and ₹4,626 Cr QoQ).
• Newdeal bookings reached $3.3 billion, up 27% YoY and 35% QoQ, marking the second-highest quarterly bookings in HCL Tech’s history and its strongest-ever first-half performance.
• Attrition (LTM) stood at 12.8% vs. 12.7% QoQ and 12.6% YoY.
• IT and Business Services is the top revenue contributor for the company. Financial Services,Manufacturing, Technology & Services, and Life Sciences & Healthcare are the top revenue contributing verticals, accounting for 22.4%, 18.3%, 14.3%, and 13.8%, respectively.
• The USA and Europe are the top geographic revenue contributors at 56.1% and 26.9%,respectively, while India contributes 3.4%.
• Advanced AI revenue scaled to $219 million in Q2 (up 28.4% QoQ and 78% YoY), bringing annualized Advanced AI run-rate revenue to $876 million.
• The Board declared an interim dividend of ₹12.00 per share (Record Date: Oct 16, 2026; Payment: Oct 26, 2026).
Concall Highlights:
• HCL Software ARR reached $1.134 billion, up 7.6% YoY including acquisitions and 2.6% YoY organically, which management considers the true health indicator.
• Software revenue was lower due to fewer multi-year subscription renewals compared to Q2FY26 of $39M from $81M in Q2FY26, impacting upfront revenue recognition despite stable core ARR.
• Launched HCLTech Pulse for mid-market clients ($500M–$5B revenue), established an AI Data Center in Odisha, opened a Gift City center, and launched a ₹185 crore semiconductor lab.
• FY27 total constant currency revenue growth is guided at 2.5% to 4.0% YoY, which now incorporates inorganic contributions.
• FY27 Services constant currency revenue growth is guided at 3.0% to 4.0% YoY. Management expects Services performance to trend slightly above the midpoint.
• FY27 EBIT margin guidance is maintained at 17.5% to 18.5%, balancing operational efficiency gains against ongoing strategic investments in AI capabilities, IP, and talent. And HCL Tech’s desired margin band remains 18.0%–19.0%.
• Management confirmed that the US Department of Labor’s suspension of the PERM program will have no material impact on talent plans or client engagements due to past local hiring.
• AI partnerships with OpenAI and Anthropic are driving rapid pipeline growth around enterprise deployments, enterprise ChatGPT implementations, and custom managed services.
• Management expects initial AI deployments with enterprise clients to lead to long-tail, recurring managed services contracts as platforms scale across broader enterprise workflows.
• In large Advanced AI deals, HCL Tech primary competes with boutique consultancies, specialty semiconductor design firms, or wins single-source engagements driven by ecosystem partner relationships.
• Upfront accounting rules recognize 60%–80% of multi-year contract value in Year 1. A light renewal calendar in FY27 caused revenue drops, but renewals will rebound in FY28/FY29.
• H2services growth reflects normal seasonal patterns; mega deals won recently will not contribute to revenue in Q3/Q4, commencing revenue generation in Q1FY28
Disclosure in pursuance of Section 19 of SEBI (RA) Regulation 2014
InCred Markets Limited (“the Company”), Formerly known as Elite Wealth Limited (The company is Wholly Owned Subsidiary of InCred Capital Financial Services Limited) does/ does not do business with companies covered in its research reports. Investors should be aware that the Company may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.
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Disclosure Appendix
Analyst Certification (For Reports)
Vindhyachal Prasad, InCred Markets Limited, vindhyachal@elitestock.com
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