HCL Technologies Q1 Results: PAT Down 10% YoY, ₹12 Dividend Declared

HCL Technologies reported its Q1 FY26 results with a 10% YoY decline in consolidated PAT to ₹3,843 crore and declared an interim dividend of ₹12 per share. Here’s a detailed analysis

Introduction

HCL Technologies, one of India’s top IT service providers, released its quarterly results for Q1 FY26 on July 13, 2025. The results indicate a decline in profits amidst a cautious global IT demand environment.

HCL Tech Q1 FY26 Highlights

Consolidated Financial Performance

Net Profit (PAT): ₹3,843 crore (down 10% YoY)
Revenue: ₹26,297 crore (up 3.3% YoY)
EBIT Margin: 16.7%, slightly below analysts’ estimates

The dip in PAT came despite a moderate rise in revenues, reflecting increased operational costs and currency impact.

Segment-Wise Performance

IT Services: Continued strong traction with large clients but growth slowed in Europe.
Engineering & R&D Services: Saw a sequential dip due to delayed decision-making by clients.
Products & Platforms: Remained steady contributing ~10% of total revenues.

Reasons for PAT Decline

HCL Tech attributed the decline in profit to:

Increased Employee Costs: Ongoing wage hikes and fresher onboarding.
Higher SG&A Expenses: Marketing and travel costs rose as client engagements resumed globally.
Currency Headwinds: Impact from a strong rupee against key client currencies.

Dividend Announcement and Record Date

The board declared an interim dividend of ₹12 per equity share.

Record Date: July 20, 2025
Ex-Dividend Date: July 19, 2025
This continues HCL’s robust dividend payout policy, providing attractive returns to long-term shareholders.

HCL Tech Share Price Reaction

Post-results, HCL Tech share price opened flat at ₹1,430 on NSE, reflecting:

Investor concerns on profit growth
Confidence from sustained dividend announcements

Analysts maintain a “Hold” rating with a price target of ₹1,480 citing near-term margin pressures but strong long-term digital pipeline.

Future Outlook for HCL Technologies

Despite Q1 profit decline, management remains positive:

FY26 Guidance Retained: Revenue growth of 3-5% in constant currency terms.
Strong Deal Pipeline: New large deals signed in banking and healthcare sectors.
AI & Cloud Strategy: Continued investments in AI-led solutions and Cloud migration services.

The company aims to stabilise margins by optimising costs while increasing automation in delivery.

FAQs

1. What is HCL Technologies’ Q1 FY26 net profit?

HCL Tech reported a consolidated net profit of ₹3,843 crore, down 10% YoY.

2. What dividend did HCL announce in Q1 FY26?

The company declared an interim dividend of ₹12 per equity share with a record date of July 20, 2025.

3. Why did HCL Tech’s profit decline this quarter?

Due to higher employee costs, increased operational expenses, and currency headwinds despite moderate revenue growth.

4. What is the FY26 guidance for HCL Technologies?

HCL Tech retained its revenue growth guidance of 3-5% for FY26 in constant currency terms.

Helpful Resources

Conclusion

HCL Technologies’ Q1 FY26 results indicate a cautious start to the financial year. While profit margins were impacted, the robust deal pipeline and ₹12 dividend declaration reflect the company’s confidence in sustaining growth amid global macroeconomic headwinds.