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HCLTech reported a mixed set of fourth-quarter results for FY26, with revenue growth falling short of expectations and profit rising only modestly, highlighting continued pressure on global IT spending.
The company posted consolidated revenue of ₹33,981 crore ($3.63 billion), up about 12.3% year-on-year, but slightly below analyst estimates. Net profit rose 4.2% to ₹4,488 crore, also missing market expectations.
The softer-than-expected performance was driven by restrained discretionary spending by clients, particularly in key overseas markets, along with weakness in segments such as telecom and Europe.
HCLTech also reported a decline in new deal bookings to $1.94 billion during the quarter, compared with $3 billion in the previous quarter, indicating slower deal momentum amid macroeconomic uncertainty.
CEO C Vijayakumar said the business environment remains “highly fluid,” with limited visibility on recovery in enterprise tech spending. The company also flagged project scale-downs from two clients in the Americas, which could shave around 0.5% off annual growth.
Looking ahead, HCLTech guided for fiscal 2027 revenue growth of around 1%–4%, below analyst expectations, reinforcing concerns about prolonged softness in discretionary IT budgets.
Despite the broader slowdown, the company’s AI-led services emerged as a key growth driver. Revenue from advanced AI offerings—such as agentic AI and AI engineering—grew sharply to an annualised run rate of about $620 million, reflecting rising enterprise interest in next-generation automation and AI adoption.
The results mirror wider trends across India’s IT services sector, where companies including Infosys, Tata Consultancy Services and Wipro have also flagged cautious client spending, longer deal cycles, and macroeconomic headwinds.
While AI-driven demand is gaining traction, analysts say it is not yet large enough to offset weakness in traditional services, leaving the sector in a transitional phase as enterprises rebalance spending toward efficiency and automation.
The company posted consolidated revenue of ₹33,981 crore ($3.63 billion), up about 12.3% year-on-year, but slightly below analyst estimates. Net profit rose 4.2% to ₹4,488 crore, also missing market expectations.
The softer-than-expected performance was driven by restrained discretionary spending by clients, particularly in key overseas markets, along with weakness in segments such as telecom and Europe.
HCLTech also reported a decline in new deal bookings to $1.94 billion during the quarter, compared with $3 billion in the previous quarter, indicating slower deal momentum amid macroeconomic uncertainty.
CEO C Vijayakumar said the business environment remains “highly fluid,” with limited visibility on recovery in enterprise tech spending. The company also flagged project scale-downs from two clients in the Americas, which could shave around 0.5% off annual growth.
Looking ahead, HCLTech guided for fiscal 2027 revenue growth of around 1%–4%, below analyst expectations, reinforcing concerns about prolonged softness in discretionary IT budgets.
Despite the broader slowdown, the company’s AI-led services emerged as a key growth driver. Revenue from advanced AI offerings—such as agentic AI and AI engineering—grew sharply to an annualised run rate of about $620 million, reflecting rising enterprise interest in next-generation automation and AI adoption.
The results mirror wider trends across India’s IT services sector, where companies including Infosys, Tata Consultancy Services and Wipro have also flagged cautious client spending, longer deal cycles, and macroeconomic headwinds.
While AI-driven demand is gaining traction, analysts say it is not yet large enough to offset weakness in traditional services, leaving the sector in a transitional phase as enterprises rebalance spending toward efficiency and automation.
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