HCLTech Q1 net profit dips 9.7% y-o-y to ₹3,843 cr amid dollar strength, AI investments

The company also announced it is undergoing a comprehensive restructuring programme impacting both personnel and non-personnel areas
| Photo Credit:
PAWAN KUMAR

HCL Technologies (HCLTech) on Monday reported a 9.7 per cent year-on-year (y-o-y) decline in consolidated net profit at ₹3,843 crore for the first quarter (Q1) ended June. This dip, from ₹4,257 crore in the same period last year, was primarily attributed to several strategic and market-driven factors — a strengthening US dollar, lower operational utilisation, and increased investments in generative artificial intelligence (AI) as well as go-to-market initiatives.

Despite the profit contraction, revenue from operations for the April-June quarter demonstrated robust growth, climbing 8.1 per cent y-o-y to ₹30,349 crore, up from ₹28,057 crore in Q1 FY25. The company also announced it is undergoing a comprehensive restructuring programme impacting both personnel and non-personnel areas. This initiative will incur a one-time cost, which has been factored into the company’s revenue growth guidance of 3-5 per cent for FY26.

Roshni Nadar Malhotra, Chairperson, HCLTech, underscored the strategic imperative of AI, stating: “AI has become integral to business growth of global enterprises. HCLTech’s capabilities and strategic partnerships ensure our AI-led solutions are practical, comprehensive and significant value creators to our clients. We also remain intensely focused on the ethical deployment of AI and maximising its positive social impact.”

C Vijayakumar, Chief Executive Officer and Managing Director, HCLTech, reaffirmed the company’s accelerated investments in generative AI. He acknowledged that some anticipated large deals, originally expected to close in Q1, have now shifted to Q2, clarifying that this delay is not linked to macroeconomic factors.

Discussing the financial performance, Vijayakumar explained: “Our operating margin came at 16.3 per cent, impacted by lower utilisation and additional Gen AI and GTM (go-to-market) investments. Our AI propositions are resonating well with our clients, and have been augmented further by our partnership with OpenAI. Our pipeline continues to grow as the demand environment was stable during the quarter.”

He further asserted HCLTech’s strong market position, noting: “As the only service provider positioned as ‘Customer’s Choice’ in all 6 Gartner Voice of Customer Quadrant evaluations related to IT services, the company is well-positioned to grow in the AI era.”

As of June 30, HCLTech’s total headcount stood at 223,151 people, an increase from 219,401 in June 2024.

Interim dividend

In a related development, the company’s board has declared an interim dividend of ₹12 per equity share of ₹2 each for FY26. The record date for this dividend payment is July 18, 2025, with the payment scheduled for July 28, 2025.

Shares of HCLTech closed at ₹1,619.95 apiece on the BSE on Monday, reflecting a 1.04 per cent decline from the previous close.

Published on July 14, 2025