BENGALURU: HCLTech on Monday missed street estimates and reported a 9.7% decline in its consolidated net profit at Rs 3,843 crore for the quarter that ended on June 30, compared to Rs 4,257 crore in the same quarter last year. The company's revenue in the first quarter stood at Rs 30,349 crore, up 8.2% y-o-y. The IT services firm also lowered its EBIT margin forecast for FY26 from 18%-19% to 17%-18%. In FY26, the company's revenue growth is expected to be between 3.0% and 5.0% y-o-y in CC.
"Q1 is traditionally a soft quarter for HCLTech. The environment remains stable from an overall perspective with some variations across specific verticals. It also did not deteriorate as feared at the start of the quarter," said C Vijayakumar, CEO & Managing Director, HCLTech, during the Q1 post-earnings press conference.
The company's EBIT stood at Rs 4,942 crore (16.3% of revenue), down 9.2% q-o-q and up 3.1% y-o-y.
He added that margins fell short of expectations as utilisation dropped due to a delay in ramp-up for a specific programme. "We also had a one-time impact from a client bankruptcy," he said, adding that they are committed to accelerating investments in Gen AI.
HCLTech said it is also executing a restructuring programme and that this is for both people and non-people assets. The CEO also mentioned that the restructuring plan is mostly for facilities outside India that they have not been utilising.
"There will be some talent ramp-down, especially in geographies outside India and that will be a part of the restructuring plan. We expect all of this to happen starting from Q2, Q3 and some parts of Q4,” he added during the post-earnings press conference.
The company's total contract value (new deal wins) stood at $1,812 million. As far as verticals are concerned, its technology and services grew 13.7% y-o-y and financial services at 6.8%.
The CEO also said that some large deals expected to close in Q1 have now moved to Q2 and this delay is not linked to external or macro factors and that they are optimistic about conversion.
The company's attrition stood at 12.8% in the June quarter. Its employee headcount reduced by 269 in June quarter, bringing its total workforce to 2,23,151. The company has onboarded 1,984 freshers in the June quarter.