Result-Analysis-Elite-Wealth

HCLTech is a global technology company, home to more than 223,000 people across 60 countries, delivering industry-leading capabilities centered around digital, engineering, cloud and AI, powered by a broad portfolio of technology services and products. We work with clients across all major verticals, providing industry solutions for Financial Services, Manufacturing, Life Sciences and Healthcare, Technology and Services, Telecom and Media, Retail and CPG, and Public Services.

Result Analysis:  HCL Technology

 (CMP: Rs. 1,571)

Result Update: Q1FY26

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    Stock Details
    Market Cap. (Cr.) 4,26,737
    Equity (Cr.) 543
    Face Value 2
    52 Wk. high/low 2012/1303
    BSE Code 532281
    NSE Code HCLTECH
    Book Value (Rs) 256.68
    Sector Computer-Software
    Key Ratios
    Debt-equity: 0.08
    ROCE (%): 28.63
    ROE (%): 23.51
    TTM EPS: 62.59
    P/BV: 6.12
    TTM P/E: 25.1

    Result Highlights:

    • The company reported revenue from operations of Rs 30,349 crore in Q1 FY26, reflecting a YoY growth of 8.2% compared to Rs 28,057 crore in Q1 FY25. On a QoQ basis, revenue grew by 0.34% from Rs 30,246 crore in Q4 FY25.
    • The company reported EBIT of Rs 4,942 crore in Q1 FY26, reflecting a YoY increase of 3.1% from Rs 4,795 crore in Q1 FY25. However, on a QoQ basis, EBIT declined by 9.2% from Rs 5,442 crore in Q4 FY25, indicating some operational headwinds during the quarter. EBIT margin stood at 16.3% in Q1FY26, down from 17.1% in Q1 FY25 and 18% in Q4 FY25, reflecting margin pressure on both YoY and QoQ bases.
    • HCL Technologies faced pressure during the quarter, as reflected in its Profit After Tax (PAT), which declined by 9.7% YoY to Rs 3,844 crore in Q1 FY26 from Rs 4,259 crore in Q1 FY25. On a QoQ basis, PAT also declined by 9.8% from Rs 4,309 crore in Q4 FY25.
    • It has reported a Total Contract Value (TCV) of $1,812 million in Q1 FY26, down from $2,995 million in Q4 FY25. For the full year FY25, TCV from new deal wins stood at $9,268 million, indicating a slower start to deal momentum in the current fiscal year.
    • Attrition (LTM) in Q1 FY26 stood at 12.8%, stable on a QoQ basis compared to Q4 FY25. On a YoY basis, attrition also improved slightly from 12.8% in Q1 FY25, indicating effective employee retention measures and a relatively stable workforce environment.
    • The company’s revenue contribution by segment is as follows: Financial Services at 21.6%, Manufacturing at 18.6%, Life Sciences & Healthcare at 14.5%, Technology and Services at 14%, Telecommunications, Media, Publishing & Entertainment at 13.1%, Retail & CPG at 9.7%, and Public Services at 8.5%.
    • HCL Technologies’ revenue by geography is distributed as follows: 56.5% from the USA, 28.3% from Europe, 3.3% from India, and 11.9% from the rest of the world.

    Financial Performance:

    Shareholding Pattern:

    Particulars (In %) Q4FY25 Q4FY24
    Promoters Group 60.82 60.82
    FIIs 19.77 20.16
    DIIs 15.48 14.99
    Public 3.70 3.77
    Others 0.24 0.27

    Management Commentary:

    • The company has declared an interim dividend of Rs 12 per share.
    • For FY26, the company has guided for overall and services revenue growth in the range of 3.0% to 5.0%.
    • For FY26, the company has guided for an EBIT margin of 17.0% to 18.0%, which is lower as last guided, indicating potential margin pressure amid evolving business and cost dynamics.

    Outlook:

    HCL Technologies reported an 8.2% YoY growth in revenue, while QoQ growth remained largely flat. The company witnessed a decline in its bottom line and did not meet market estimates. Total Contract Value (TCV) also declined compared to the previous quarter, indicating a slowdown in deal momentum. On a positive note, attrition remained stable, highlighting strong employee retention. The company revised its EBIT margin guidance downward for FY26 and expects overall revenue and services revenue growth in the range of 3% to 5% .The Company reported an EPS of Rs 14.17 in Q1FY26 and TTM EPS of Rs 62.59 and currently trades at a TTM P/E of 25.1 x and P/B of 6.12 x.

    Results:

    Particulars (In Rs. Cr.) Q1FY26 Q1FY25 Q4FY25 YoY% QoQ% FY25 FY24 YoY%
    Sales 30349 28057 30246 8.2 0.3 117055 109913 6.5
    Other Income 456 1103 449 -58.7 1.6 2485 1495 66.2
    Total Income 30805 29160 30695 5.6 0.4 119540 111408 7.3
    Total Expenditure 24314 22264 23764 9.2 2.3 91551 85715 6.8
    EBIDT 6491 6896 6931 -5.9 -6.3 27989 25693 8.9
    Interest 209 191 156 9.4 34.0 644 553 16.5
    EBDT 6282 6705 6775 -6.3 -7.3 27345 25140 8.8
    Depreciation 1093 998 1040 9.5 5.1 4084 4173 -2.1
    EBT 5189 5707 5735 -9.1 -9.5 23261 20967 10.9
    Tax 1281 1252 1489 2.3 -14.0 5161 4626 11.6
    Deferred Tax 64 196 -63 -67.3 -201.6 701 631 11.1
    PAT 3844 4259 4309 -9.7 -10.8 17399 15710 10.8

    Segmental Revenue

    Segment Revenue (%) Q1FY26 Q1FY25 Q4FY25
    IT and Business Services 22454 20905 22186
    Engineering and R&D Services 5174 4455 5162
    HCL Software 2826 2789 3008
    Inter-Segment -105 -92 -110

    Vertical Revenue

    Vertical Revenue (%) Q1FY26 Q1FY25 Q4FY25
    Financial services 21.6 21 21.1
    Manufacturing 18.6 19.4 18.6
    Lifesciences & Healthcare 14.5 15.9 14.7
    Technology and Services 14 13 13.4
    Telecommunications, Media, Publishing & Entertainment 13.1 12.2 13.9
    Retail & CPG 9.7 9.4 9.7
    Public Services 8.5 9.1 8.6

    Geographical Revenue

    Geography Revenue (%) Q1FY26 Q1FY25 Q4FY25
    America 56.5 59.6 57.4
    Europe 28.3 25.9 27.5
    India 3.3 3.5 3.1
    Rest of the World 11.9 11 12

    Source: Company website and Capital Line

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