HCL Technologies, a leading IT services company, has delivered a strong quarter with revenue of ₹33,872 crore, net profit of ₹4,076 crore, and margin of 18.6% in the October-December quarter (Q3FY26). CEO and MD C Vijayakumar expressed confidence in the company’s outlook for FY27, citing strong bookings in the second and third quarters, which were 30% higher than the same period last year. This momentum is expected to translate into a meaningful uptick in services revenue in the fourth quarter and the first quarter of the next financial year.
The company’s pipeline visibility and overall business momentum support expectations of a positive outcome in the coming year. However, Vijayakumar noted that any specific guidance would be shared after the April meetings. On the cost and margin front, CFO Shiv Walia said that the impact of the new labor code would remain limited beyond a one-time charge, and the ongoing restructuring exercise is nearing completion. The company expects restructuring costs to cap at around 50 basis points for the full year, paving the way for margins to move back towards the 18-19% band in FY27.
The company has made some acquisitions, including Jaspersoft and HPE, which are expected to contribute at least 1.5% to the overall company’s growth in FY27. Vijayakumar said that the company is not looking at scale acquisitions but rather capability-led or geography-based acquisitions to accelerate its presence. The company is also optimistic about its advanced AI business, which is growing rapidly and currently contributes around 4% to the company’s overall consolidated revenue.
In terms of restructuring, the company has optimized its skills and location mismatch, underperforming acquisitions, and facilities utilization. While the company has had some exits, largely outside India, the numbers are small and not explicitly disclosed. The company aims to complete the restructuring exercise this year and move to the next year with a clean slate, which should help margins return to the 18-19% range.
Overall, HCL Technologies is confident about its outlook for FY27, driven by strong bookings, pipeline visibility, and business momentum. The company is well-positioned to take advantage of the growing demand for IT services, particularly in areas like advanced AI, and is expected to deliver strong performance in the coming year.