HCL Technologies delivered a mixed but encouraging set of numbers for the December quarter, beating Street expectations on revenue and margins while falling short on profit. The IT major showed clear momentum in business growth, even as net profit disappointed analysts.
For Q3, HCL Tech reported revenue of ₹33,872 crore, up from ₹31,942 crore in the previous quarter. That translates to a 6% quarter-on-quarter growth and a 4.2% rise in constant currency (CC) terms, underlining steady demand across its key markets.
Operating performance also improved meaningfully. EBIT rose to ₹6,285 crore from ₹5,502 crore in Q2, while the EBIT margin expanded to 18.6%, compared with 17.2% in the previous quarter. Both figures came in above market expectations.
However, profit told a different story. Profit after tax (PAT) slipped to ₹4,082 crore, down from ₹4,236 crore in Q2. The number also missed the CNBC-TV18 poll estimate of ₹4,747 crore, making net profit the weak spot in an otherwise solid report card.
HCL Tech Q3 Results
Last Quarter vs This Quarter (QoQ)
(Q2 = Sep 2025 | Q3 = Dec 2025 – Consolidated)
| Metric | Q2 FY26 (Sep 2025) | Q3 FY26 (Dec 2025) | Change |
|---|---|---|---|
| Sales (₹ Cr) | 31,942 | 33,872 | ▲ 6.0% |
| Expenses / Purchases (₹ Cr) | 25,397 | 26,460 | ▲ |
| EBITDA / Operating Profit (₹ Cr) | 6,545 | 7,412 | ▲ |
| Net Profit (₹ Cr) | 4,236 | 4,082 | ▼ 3.6% |
| EPS (₹) | 15.61 | 15.02 | ▼ |
How HCL Tech stacked up against Street estimates
The headline numbers show a clear divergence between operational strength and bottom-line pressure:
- Net Profit: ₹4,076 crore vs CNBC-TV18 poll of ₹4,747 crore
- Revenue: ₹33,872 crore vs estimate of ₹33,360 crore
- EBIT: ₹6,285 crore vs estimate of ₹6,090 crore
- Margin: 18.6% vs estimate of 18.3%
In simple terms, HCL Tech earned more than expected from its core business and ran it more efficiently, but higher costs and other factors dragged down net profit.
Last Year vs This Year (YoY)
(Q3 FY25 = Dec 2024 | Q3 FY26 = Dec 2025 – Consolidated)
| Metric | Q3 FY25 (Dec 2024) | Q3 FY26 (Dec 2025) | YoY Change |
|---|---|---|---|
| Sales (₹ Cr) | 29,890 | 33,872 | ▲ 13.3% |
| Expenses / Purchases (₹ Cr) | 23,030 | 26,460 | ▲ |
| EBITDA / Operating Profit (₹ Cr) | 6,860 | 7,412 | ▲ |
| Net Profit (₹ Cr) | 4,594 | 4,082 | ▼ 11.1% |
| EPS (₹) | 16.92 | 15.02 | ▼ |
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What drove the quarter?
The December quarter reflected improving execution and better cost control at the operating level. The margin expansion suggests that HCL Tech is benefiting from:
- higher utilisation rates
- tighter control over operating expenses
- a better mix of high-value services
Revenue growth in both rupee and constant currency terms indicates that client spending has remained resilient, even as global enterprises stay cautious about technology budgets.
This matters because the IT sector has been navigating a tough environment over the past year. Many global clients have delayed projects, cut discretionary spending, and renegotiated contracts. In that backdrop, HCL Tech’s ability to deliver steady growth stands out.
FY26 guidance offers clarity
Along with the results, HCL Tech updated its outlook for FY26, offering a clearer roadmap for the year ahead.
- Company revenue growth is now expected to be between 4.0% and 4.5%, revised from the earlier range of 3.0%-5.0%.
- Services revenue growth is projected at 4.75%-5.25%, upgraded from 4.0%-5.0%.
- EBIT margin guidance remains at 17.0%-18.0%.
The tighter revenue band reflects management’s confidence in demand visibility. The upward revision in services growth is especially notable, as services form the backbone of HCL Tech’s business.
In a market where many IT firms are still struggling to predict client behavior, this guidance signals relative stability.
How the market may read these results
The reaction to the HCL Tech Q3 results is likely to be nuanced.
On the positive side:
- Revenue beat expectations
- Operating margins improved sharply
- Services growth guidance was upgraded
On the flip side:
- Net profit declined quarter-on-quarter
- Profit missed estimates by a wide margin
This creates a push-and-pull effect. Long-term investors may focus on the strength in revenue, improving efficiency, and clearer guidance. Short-term traders, however, may react to the profit miss and near-term pressure on earnings.
In recent quarters, IT stocks have been highly sensitive to even small deviations from expectations. Against that backdrop, the profit miss could weigh on sentiment in the near term.
What this says about the IT sector
HCL Tech’s results mirror the broader reality of the IT industry:
- Demand has not collapsed, but growth remains measured
- Clients are spending, but selectively
- Cost management is becoming critical
Revenue growth above estimates offers comfort that deal pipelines are still converting. However, the profit decline highlights how tight the operating environment has become.
Other IT majors will now be judged against this benchmark. Markets will look to see whether peers:
- manage to protect profit better
- deliver stronger growth
- or face similar pressures
What investors should watch next
Going forward, a few key factors will shape HCL Tech’s performance:
- commentary on client spending trends
- deal wins and pipeline visibility
- hiring plans and employee costs
- margin trajectory over the next two quarters
The next round of earnings will reveal whether Q3’s profit softness is a temporary phase or part of a broader trend.
For now, HCL Tech appears better placed than many peers, with steady growth, improving margins, and a clearer outlook. Yet, the Q3 numbers are a reminder that even strong IT players are not immune to a slowing global tech cycle.
Disclaimer:
This article is for informational purposes only and does not constitute financial or investment advice. All figures are based on publicly available information at the time of publication. Market data may change without notice. Readers should conduct their own research or consult a certified financial advisor before making any investment decisions. The publisher and author shall not be held responsible for any losses arising from the use of this information.
