HCL Technologies, India's third-largest IT services firm, unveiled its financial results for the third quarter of fiscal year 2026 (Q3FY26) on January 12, 2026. The company presented a mixed performance, showcasing robust revenue growth but a dip in net profit, influenced by a significant one-time expense.
Top-Line Strength and Profit Pressure
The standout figure was the company's revenue, which came in at ₹33,872 crore for the quarter ended December 2025. This marked a substantial 13.3% increase compared to the same period last year (YoY) and a strong 6% growth sequentially from the previous quarter (QoQ). In constant currency terms, which removes the impact of foreign exchange fluctuations, revenue grew by 4.8% YoY and 4.2% QoQ.
However, the bottom line told a different story. HCL Tech's consolidated net profit for Q3FY26 was ₹4,076 crore, which represents an 11.2% decline from the ₹4,591 crore reported in the year-ago quarter. The company attributed this drop primarily to a one-time cost of ₹956 crore related to new labour code provisions implemented during the quarter.
Operational Performance and AI Momentum
On the operational front, the company showed improvement. Earnings Before Interest and Taxes (EBIT) rose by 8% year-on-year to ₹6,285 crore. Consequently, the EBIT margin expanded to 18.6%, up from 17.2% in the September quarter, indicating a recovery in operational efficiency.
A major highlight of the quarter was the explosive growth in the Advanced AI segment. Revenue from Advanced AI services surged by a remarkable 19.9% quarter-on-quarter in constant currency, reaching $146 million. This underscores the company's strategic focus and success in capturing demand in the high-growth artificial intelligence domain.
Management Commentary and Future Outlook
C. Vijayakumar, CEO and Managing Director of HCL Tech, described it as "another standout quarter on all fronts." He emphasized the strong revenue momentum, which helped the company cross the $15 billion mark in annualized revenues. Vijayakumar also highlighted the exceptional new bookings for the quarter, which stood at $3 billion.
"Our new bookings were exceptionally high at $3 billion. Services revenue grew 1.8% QoQ in constant currency, driven by 19.9% QoQ growth in Advanced AI services," he stated. He further noted the sharp growth in HCL Software revenue, which jumped 28.1% sequentially, aided by seasonality and the Data Intelligence portfolio. The CEO expressed confidence in the company's positioning to meet the evolving AI demands of its global clientele across various industries.
The results reflect a resilient business model where strong revenue growth and a booming AI practice are offsetting the impact of one-time regulatory costs, setting a solid foundation for future quarters.
