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Informist, Monday, Jul. 13, 2026

 

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--HCL Tech: Deal pipeline healthy, seeing growth in AI-native, amplified svcs 
--CONTEXT: Comments by HCL Tech management in post-earnings press conference 
--HCL Tech: To make INR 35 bln initial investment in AI data centre business 
--HCL Tech: Aims to expand AI data centre business capacity to 50 MW 
--HCL Tech: Expect revenue per employee to grow gradually;no target for now 
--HCL Tech: See depreciation, amortisation cost to revenue ratio inching up 
--HCL Tech: Data centre venture to have partners; funding via debt, equity 
--HCL Tech: Once discretionary spends pick up, engg, R&D to be top driver 
--HCL Tech: Saw strong bookings Q1, see rest of FY27 play out as expected
 

 

MUMBAI/NEW DELHI – With the recent acquisitions, HCL Technologies Ltd. expects its ratio of depreciation and amortisation expenses to revenue to inch up going forward, the management said in a post-earnings press conference Monday. The management did not specify the quantum of increase in the ratio. 

 

"It (depreciation and amortisation expense) will go up compared to what we have right now, because with any acquisition, all the amortisation is going to be there in the P&L (profit and loss statement) for initial couple of years," Shiv Walia, chief financial officer of HCL Tech, said. Depreciation and amortisation expenses spread out the cost of long-term assets over their useful lives. In its latest acquisitions, HCL Tech completed the acquisition of Jaspersoft, formerly a business unit of Cloud Software Group, earlier this month. Last month, it had said it would invest INR 14.27 billion in generative artificial intelligence firm Axonwise Pvt. Ltd., which does business as Sarvam AI, by acquiring 10.5% stake in it. The stake acquisition was expected to be concluded by June-end. A rise in the ratio of depreciation and amortisation to revenue would have the effect of compressing the company's net profit.

 

After reporting a good set of numbers for the June quarter with robust new deal bookings, HCL Tech now expects the rest of the financial year 2026-27 (Apr-Mar) to play out as expected, the management said. During the quarter ended June, the company reported new deal wins of $2.41 billion, marking the highest ever deal booking in Apr-Jun to date. "So that's definitely a very positive indicator. And we continue to have a similar size of qualified pipeline as we had in the beginning of last quarter. So pipeline continues to remain robust," C. Vijayakumar, chief executive officer and managing director, said.

 

While some of the softness in discretionary spending continues to be present, HCL Tech remains positive on the overall outlook with expectations of strong deal bookings in the September quarter as well. So, the company retained its FY27 growth guidance for revenue in constant currency terms at 1–4% and services sales guidance at 1.5-4.5%. The earnings before interest and tax margin guidance for the financial year was retained at 17.5%-18.5%. Once discretionary spending picks up, the company expects the engineering, research, and development service to be among the top growth drivers.

 

"Looking at the broader market on one side, we are seeing strong sustained growth in both AI native and AI amplified services. And on the other side, where AI-disrupted services, which is the more traditional commoditised work, continue to be optimised further as AI-enabled automation takes hold," Vijayakumar said. The management believes the company is well positioned to grow its business further through clear strategies to address each of the segments.

 

After declaring its earnings, the company announced its entry into the full-stack AI market with a strategic investment of up to INR 35 billion to establish AI data centres, with the potential to scale to 50 megawatts of capacity. The initial investment will be financed through a combination of debt and equity and "there could be other partners who will contribute to this as well, which we will announce in due course", the management said.

 

As part of this investment, the company will incorporate a wholly-owned subsidiary to set up AI data centres for an initial investment of INR 1.5 million, with further investment to be made as and when required, it said in a press release. The strategic investment will be made through the new subsidiary and step-down subsidiaries that will be set up for this business, HCL Tech said. 

 

On the company's hiring strategy for FY27, the management sees fresher hiring numbers to be similar to FY26. "Our focus, again, is going to be not so much on numbers. If I have to compromise on numbers, and if that results in increasing the percentage elite engineers that we will hire, that will be our focus," a senior official said. Last year, the company raised entry-level salaries for freshers with specialised skill sets in AI and its adjunct technologies, whom the company calls the "elite cadre" of engineers.

 

"We hire based on demand, and we continue to evolve as an AI solutions company, which means the IP (intellectual property) components and the automation and AI infusion in all our service delivery makes it easier for us to deliver the same work with slightly lesser number of people," the management said. Going forward, it expects revenue per employee to continue to grow, the management said, adding that it does not have a target in mind. 

 

Earlier in the day, the company reported a consolidated net profit of INR 46.24 billion for the June quarter, up more than 3% on quarter and higher than analysts' consensus estimate. Its consolidated revenue for the quarter rose nearly 2% on quarter to INR 345.79 billion, also beating analysts' expectations. Ahead of the earnings announcement, shares of the company closed at INR 1,221.20 on the National Stock Exchange, up nearly 5% from Friday.  End 

 

Reported by Arya S. Biju and Shakshi Jain

Edited by Rajeev Pai

 

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