This article first appeared on GuruFocus .
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Total Revenue:$3,650 million, a decline of 0.5% QoQ and growth of 2.6% YoY.
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Operating Margin:16.9%, an improvement of 39 basis points QoQ and 56 basis points YoY.
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Net New TCV Bookings:$2.4 billion, highest ever Q1 bookings.
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Net Income:$488 million, representing 13.4% of revenue.
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Services Revenue:$351 million, a decline of 0.7% QoQ and growth of 3.5% YoY.
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HCL Software Revenue:$33 million, growth of 2.2% QoQ and a decline of 5.3% YoY.
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Annual Recurring Revenue (HCL Software):$1.063 billion, a 2% increase YoY.
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Employee Count:223,889, a decrease of 3,292 compared to the previous quarter.
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Attrition Rate:12.7% on an LTM basis.
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Free Cash Flow:$1.98 billion over the last 12 months.
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Operating Cash Flow:$2.14 billion over the last 12 months.
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Gross Cash:$2.86 billion as of June 30, 2026.
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Net Cash:$2.84 billion as of June 30, 2026.
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Return on Invested Capital (ROIC):40.7%, up 257 basis points YoY.
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EPS Growth:Normalized diluted EPS growth of 4.5% QoQ and 6.9% YoY.
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Dividend:Interim dividend of INR12 per share for the quarter.
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Warning! GuruFocus has detected 4 Warning Signs with BOM:532281.
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Release Date: July 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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HCL Technologies Ltd ( BOM:532281 ) reported a significant increase in advanced AI revenue, with a 10.3% QoQ and 62.1% YoY growth.
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The company achieved its highest ever Q1 bookings with net new TCV bookings of $2.4 billion, excluding a mega deal signed in early July.
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HCL Technologies Ltd ( BOM:532281 ) completed the acquisition of JasperSoft, enhancing its data management portfolio with a visualization layer.
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The company reported a 3.3% year-over-year increase in revenue per employee, marking consistent growth over the last five quarters.
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HCL Technologies Ltd ( BOM:532281 ) maintained a strong balance sheet with gross cash of $2.86 billion and net cash of $2.84 billion as of June 30, 2026.
Negative Points
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The company's revenue declined by 0.5% sequentially, and its services business declined by 0.7% sequentially in constant currency.
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HCL Software revenue declined by 5.3% year-on-year, despite a 2.2% sequential growth.
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The company experienced a decrease in its workforce, with a reduction of 3,292 employees compared to the previous quarter.
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The Engineering and R&D Services segment saw a 3.7% sequential decline.
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HCL Technologies Ltd ( BOM:532281 ) faced challenges in the telecom and high-tech sectors, impacting its R&D segment.
Q & A Highlights
Q: With a strong $2.4 billion deal win and a mega deal announced in July, why hasn't HCL Technologies increased its guidance? A: C. Kumar, CEO, explained that while the bookings are strong, the guidance band is broader, and it's only the first quarter. The mega deal's transition will start in a couple of months, with a steady state expected by April 2027, impacting revenue negligibly this financial year.
Q: Can you provide more details on the data center investment, particularly the cost and strategy? A: C. Kumar stated that the INR3,500 crore investment represents a fraction of the 50-megawatt capacity plan. The approach will be disciplined, with funding potentially through partners, OEM vendors, and committed client capacity. The investment will not impact the balance sheet in a single year.
Q: How do token costs affect AI adoption and revenue, and what is the outlook for these costs? A: C. Kumar noted that token costs have become significant as AI adoption scales. While token costs might drop, overall consumption will rise. The tiered approach with smaller models and zero-trust architecture is becoming prevalent, offering meaningful services revenue opportunities.
Q: How does HCL view the AI data center business in terms of customer demand and market opportunity? A: Shiv Walia, CFO, highlighted that clients are interested in open models due to limitations of closed models. HCL's strategy focuses on full-stack AI services, deploying efficient SLM-led models, and generating more enterprise value per megawatt than raw hyperscale capacity.
Q: What is the outlook for the BFSI and healthcare verticals, and what factors are influencing their performance? A: C. Kumar mentioned strong momentum in BFSI due to AI-native approaches and data analytics traction. In healthcare, regulatory work completion and stress in the US market have impacted growth, but regular business continues with some headwinds.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
