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Informist, Saturday, Apr. 18, 2026

 

By Shakshi Jain

 

NEW DELHI – HCL Technologies Ltd. is expected to report a moderate sequential decline in its adjusted net profit for the March quarter, despite a marginal rise in revenue, owing to the seasonal weakness in its higher-margin software business, wage hikes, and restructuring costs. The company's revenue for the quarter is expected to rise slightly in rupee terms due to depreciation of the home currency against the dollar, brokerages said. In constant currency terms, analysts anticipate a moderate decline in the company's revenue from the trailing quarter's high base.

 

If analysts' consensus estimates hold, it would be a second consecutive quarter of sequential decline in the company's bottom line, with the fall in the March quarter steeper than in the trailing quarter. At the same time, the sequential rise in top line for the March quarter would be the slowest in three quarters.

 

HCL Tech's consolidated net profit for the March quarter is expected to decline over 6% to INR 47.23 billion from the net profit reported for the December quarter, excluding exceptional items. This is according to the average of estimates from 18 brokerages. On a year-on-year basis, the company's bottom line is expected to rise nearly 10%. The highest net profit estimate for the March quarter is INR 49.2 billion from Dolat Capital Market Pvt. Ltd. and the lowest is INR 45.71 billion from ICICI Securities Ltd.

 

The Noida-based firm's consolidated revenue for the reporting quarter is expected to rise 1.6% sequentially and almost 14% on year to INR 344.24 billion, according to the average of estimates. The highest top line estimate is INR 351.05 billion from Dolat Capital Market and the lowest is INR 339.73 billion from Nirmal Bang Equities Pvt. Ltd.

 

For the December quarter, HCL Tech had reported a consolidated net profit of INR 40.76 billion on revenue of INR 338.72 billion. In the absence of the one-time cost reported for the trailing quarter on account of the new labour codes, its bottom line would have been about INR 50.32 billion, the change in tax notwithstanding. For the year-ago March quarter, the company had reported a consolidated net profit of INR 43.07 billion on revenue of INR 302.46 billion.

 

Brokerages expect the company to report a sequential decline in contribution from the products & platforms segment, which comprises the HCL Tech Software Division, while revenues from the services business are expected to grow sequentially for the March quarter. "We expect growth of 1.2% q-q in services and 10% q-q decline in products," Nomura Financial Advisory and Securities (India) Pvt. Ltd. said.

 

Indsec Securities and Finance Ltd. and Motilal Oswal Financial Services Ltd. said the hi-tech and banking, financial services, and insurance segments are likely to have performed well in the March quarter, while manufacturing and engineering research and development verticals saw some pressure. ICICI Securities said the contribution from the smaller acquisitions completed in the March quarter is likely to be non-material. 

 

Overall, brokerages expect the company to report a decline of anywhere between 0.3% to 2% in constant currency revenue for the March quarter, as opposed to growth of 4.2% reported for the trailing three months.

 

In dollar terms, the company is expected to post revenue of $3.75 billion for the March quarter, as per the average of the estimates from 14 brokerages. This is slightly lower than the $3.79 billion reported for the December quarter.

 

DEALS, MARGIN

The company is likely to report a total contract value in the range of $2 billion to $2.5 billion as there were no mega deals signed during the quarter, Nirmal Bang Equities said. "In 3Q (Oct-Dec), TCV (total contract value) was $3 billion as one mega deal of ~ $500 million was signed."

 

In the December quarter, HCL Tech had announced a mega deal with a global apparel retailer to serve as its long-term artificial intelligence-led technology partner. The total contract value of the deal was $473 million. 

 

The company's earnings before interest and tax margin for the March quarter is expected to contract by 110 basis points sequentially to 17.7%, according to the average of estimates from 13 brokerages. "There will be an impact of ~70-80 bps from the restructuring expenses, which have been part of every quarter in FY26," brokerage Nirmal Bang said.

 

ICICI Securities said benefits from operational efficiencies and depreciation of the rupee are likely to limit margin contraction for the quarter under review.

 

A majority of the brokerages expect the company to guide for 3-6% growth in its constant currency revenue for FY27 alongside an EBIT margin of 17.5% to 18.5%. Nomura pegged a constant currency revenue growth guidance of 2-5% while Kotak Securities Ltd. estimated a narrower band of 3-5%.  

 

"For FY27, absence of employee restructuring costs (~50bps) would be a margin tailwind, which could be offset by headwinds from large deal ramp-up," ICICI Securities said.

 

HCL Tech will announce its March quarter earnings on Tuesday. Investors await the management's commentary on demand and deal pipeline, likely price deflation due to artificial intelligence, movement in AI-driven revenues, possible continuation of restructuring costs in the new financial year, the conflict in West Asia, and the overall outlook for FY27. 

 

On Friday, shares of HCL Tech ended 0.5% lower at INR 1,442.30 on the National Stock Exchange. The stock is down 13.5% since the company reported its December quarter earnings. It is down almost 9% from its 52-week high of INR 1,780.1, recorded on Feb. 3.

 

Of the 18 research reports on the company available with Informist, nine have a 'buy' recommendation on the stock while seven have a 'hold' call and two have a 'sell' recommendation. The average target price of the 'buy' recommendations is INR 1,854 and that of the 'hold' recommendations is INR 1,691. This is almost 29% and over 17% higher than the current market price, respectively.

 

Following are the Jan-Mar earnings estimates, in INR billion, for HCL Technologies from 18 brokerages, in descending order of net profit estimates:

 

Brokerage firm	Net sales	Net profit	Revenue ($)	EBIT margin (%)
Dolat Capital Market Pvt Ltd	351.05	49.20	3.79	17.9
HDFC Securities Ltd	344.16	48.50	3.77	18.3
Prabhudas Lilladher Pvt Ltd	340.30	48.30	3.73	17.8
Nomura Equity Research	346.91	48.21	3.80	17.6
Kotak Securities Ltd	346.00	48.08	3.75	17.7
Nirmal Bang Equities Pvt Ltd	339.73	48.03		18
Centrum Broking Ltd	345.20	47.72		18
Motilal Oswal Financial Services Ltd	343.46	47.47
Emkay Global Financial Services Ltd	344.90	47.22	3.75
IDBI Capital Market Services Ltd	342.05	46.86	3.74	17.5
Anand Rathi Share and Stock Brokers Ltd	346.60	46.74	3.79	17.7
JM Financial Institutional Securities Pvt Ltd	344.41	46.70	3.76
Equirus Securities Pvt Ltd	347.42	46.68	3.75	17.3
Indsec Securities and Finance Ltd	339.90	46.50	3.66	17.4
Nuvama Wealth Management Ltd	342.04	46.37	3.75	17.2
Elara Securities (India) Pvt Ltd	341.74	45.96	3.76
YES Securities (India) Ltd	342.83	45.89
ICICI Securities Ltd	347.66	45.71	3.77	17.9
Average	344.24	47.23	3.75	17.72

 

End

 

US$1 = INR 92.93

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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