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Informist, Friday, Jan. 9, 2026

 

By Shakshi Jain

 

NEW DELHI – HCL Technologies Ltd. is expected to turn in a sector-beating performance in the December quarter with a double-digit sequential rise in its consolidated bottom line, driven by a higher contribution from the more profitable software business and the depreciation of the rupee. This is after accounting for restructuring costs, annual salary increments, and seasonal furloughs. The company's top line is expected to grow in the low single digits, driven by the ramp-up of large services deals in select verticals and higher sales in the products business.

 

HCL Technologies' consolidated bottom line for the December quarter is expected to rise by more than 12% sequentially to INR 47.49 billion, according to the average of estimates from 17 brokerages. This would mean a year-on-year rise of 3.5%. The highest estimate for net profit is INR 50.7 billion by Prabhudas Lilladher Pvt. Ltd. and the lowest is INR 44.87 billion by Nirmal Bang Equities Pvt. Ltd.

 

The company's consolidated top line for the December quarter is likely to rise 3.9% sequentially and 11% on year to INR 331.86 billion, according to the average of estimates. The highest estimate for revenue is INR 334.91 billion by Dolat Capital Market Pvt. Ltd. and the lowest is INR 327.84 billion by Sharekhan Ltd.

 

HCL Technologies' expected revenue growth in the December quarter was likely helped by the ramp-up of deals in the high-tech and banking, financial services, and insurance sectors, according to brokerages. They have a dim view of the performance of the manufacturing, engineering, and research and development sectors in the December quarter. Elara Capital expects some recovery in the retail, consumer packaged goods, and healthcare segments for the reporting quarter.

 

HCL Technologies also experiences positive seasonality in its software business during the December quarter, driven by a surge in annual enterprise software contract renewals and license sales, which typically peak toward the end of the calendar year.

 

In dollar terms, the company's revenue for the reporting quarter is expected to be $3.72 billion, based on the average of estimates from 13 brokerages. The estimates are in a narrow range, with the lowest at $3.70 billion by Indsec Securities and Finance Ltd. and the highest at $3.75 billion by Nomura Financial Advisory and Securities (India) Pvt. Ltd.

 

HSBC Securities and Capital Markets (India) Pvt. Ltd. said it does not expect a notable sequential change in the company's services revenue in dollar terms and expects an around 20% increase in its products revenue for the December quarter.

 

Brokerages expect the company to report sequential growth of 1.0% to 3.4% in constant-currency revenue for the December quarter. Some analysts pegged an adverse impact of 20 basis points on revenue for the reporting quarter due to currency fluctuations.

 

Most brokerages expect the company to report aggregate deal wins in line with the guided run rate of $2 billion-$2.5 billion for the December quarter. Nomura expects HCL Technologies' net new deal wins for the December quarter to exceed $2.5 billion due to the closure of a large deal.

 

In the September quarter, the company won new deals worth $2.57 billion without any mega deals.

 

Analysts are unanimous on the view that the company will likely retain its earnings before interest and tax margin guidance for 2025-26 (Apr-Mar) at 17-18%. A majority of analysts also expect the company to keep the FY26 constant currency revenue growth guidance of 3-5% unchanged, as discretionary spending of clients is believed to have largely been the same in the December quarter on a sequential basis.

 

Among those who differ, Kotak Securities Ltd. expects HCL Technologies to narrow its revenue growth guidance to 3.5-4.5%, while Emkay Global expects it at 4-4.5% and Nuvama at 4-5%. For the services segment, analysts expect FY26 constant-currency revenue growth guidance to remain unchanged at 4-5%.

 

OPERATIONAL OPTICS

 

HCL Technologies is expected to report earnings before interest, tax, depreciation, and amortisation of INR 71.98 billion for the December quarter, according to the average of estimates from five brokerages. The EBITDA estimates range from a low of INR 69.70 billion by DR Choksey FinServ Pvt. Ltd. to a high of INR 73.79 billion by YES Securities (India) Ltd.

 

The company's EBIT margin is expected to increase by 60 basis points to 18.1% for the reporting quarter, according to the average of estimates from 12 brokerages. This is likely due to a higher revenue contribution from the products business and the depreciation of the rupee, partially offset by the hit from furloughs, restructuring costs, and wage hikes.

 

In the September quarter, the company's EBIT margin had expanded 120 basis points to 17.5%. This included a 55-basis-point impact from restructuring costs, the company had said.

 

HCL Technologies had reported a consolidated net profit of INR 42.35 billion for the September quarter on revenues of INR 319.42 billion. In the year-ago quarter, the company had reported a consolidated net profit of INR 45.91 billion on revenues of INR 298.90 billion.

 

HCL Technologies will announce its December quarter earnings Monday. Investors will watch for management commentary on AI revenue guidance, the deal pipeline and ramp-ups, hiring plans, demand trends across verticals, and the pace of deal closures. The company's outlook on clients' discretionary spending in 2026, large deal wins, updates on generative AI projects, progress on deploying its AI Force platform, and the expected revenue or margin impact of recent acquisitions will also be in focus.

 

Friday, shares of HCL Technologies ended 0.9% higher at INR 1,661.40 on the National Stock Exchange. The stock is up over 11% since the company reported its results for the September quarter on Oct. 13. The stock is down 17.4% from its 52-week high of INR 2,012.2, recorded on Jan. 13 last year.

 

Among the 22 research recommendations on HCL Technologies available with Informist, 15 have a "buy" recommendation on the stock, while six have a "hold" and one has a "sell" recommendation. The average target price of the "buy" recommendations is INR 1,792 and that of the "hold" is INR 1,632. This is 7.9% higher and 1.8% lower than the current market price, respectively.

 

Following are the Oct-Dec earnings estimates for HCL Technologies from 17 brokerages in descending order of the estimate of net profit in INR million:

 

Broking Firm	Net Sales (in INR mln)	Net Profit (in INR mln)	Revenue (mln $)	?IT margin
Prabhudas Lilladher Pvt Ltd	333,500	50,700	3,743.50	18.5
HDFC Securities Ltd	329,810	49,150	3,706.00	17.9
IDBI Capital Market Services Ltd	330,190	48,373	3,710.00	18
Kotak Securities Ltd	333,381	48,359	3,737.00	18.5
Emkay Global Financial Services Ltd	333,350	48,226
HSBC Global Research	332,901	48,052	3,724.00	18.6
Nomura Equity Research	333,961	47,942	3,752.00	18.2
JM Financial Institutional Securities Pvt Ltd	333,217	47,939
Motilal Oswal Financial Services Ltd	331,000	47,900	3,718.00	18.1
Nuvama Wealth Management Ltd	331,555	47,893	3,725.00	18.4
Indsec Securities and Finance Ltd	331,000	47,100	3,700.00	18.2
Sharekhan Ltd	327,843	46,853	3,704.00	18.4
DRChoksey FinServ Pvt Ltd	330,802	46,463
YES Securities (India) Ltd	334,050	46,042
Elara Securities (India) Pvt Ltd	330,802	46,039	3,717.00
Dolat Capital Market Pvt Ltd	334,911	45,455	3,750.00	17
Nirmal Bang Equities Pvt Ltd	329,293	44,873	3,719.00	17.5
Average	331,856.82	47,491.71	3,723.50	18.11

 

End

 

US$1 = INR 90.16

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

 

Edited by Saji George Titus

 

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