HCLTech Q3 Results: From FY26 guidance to attrition rate, 5 key takeaways

HCLTech’s Q3 FY26 results (quarter ended December 31, 2025) delivered a classic “strong growth, but profits hit by one-offs” picture: revenue held up better than many expected, guidance got tighter (but still positive), deal wins stayed solid, and employee metrics continued to stabilise—while reported profit took a knock due to an exceptional charge linked to India’s new labour codes.

Below are 5 key takeaways—with the “why it matters” context—based on what the company disclosed and what major outlets highlighted.

1) FY26 guidance: steady growth expectations, but narrower range and margins in focus

One of the biggest headline items from the print is that HCLTech maintained (and effectively tightened) its FY26 growth stance rather than throwing in a cautious downgrade. The company now expects:

• FY26 constant currency (CC) revenue growth: 4%–4.5%
• FY26 services revenue growth (CC): 4.75%–5.25%
• FY26 EBIT margin guidance: 17%–18% (excluding the one-time labour code impact)

Reuters noted that HCLTech narrowed its annual revenue growth forecast (earlier band was broader), and the revised range reflects management’s attempt to be precise about what it can see in the pipeline.

Why this matters

In Indian IT, guidance is not just a number—it’s a signal about demand confidence. Over the last few quarters, enterprise tech spending has been uneven: some clients delay discretionary projects, while others spend selectively on transformation areas like cloud optimisation, cybersecurity, data platforms, and AI enablement. In that environment, a company holding a mid-single-digit CC growth view suggests:

• It’s seeing enough project conversion to keep momentum, and
• It’s not expecting a sharp deterioration in decision-making cycles (even if clients stay cautious).

Also, the margin guidance (17–18%) is crucial because the sector is balancing wage pressure, pricing discipline, utilisation, and delivery mix. Even when revenue grows, margins can swing based on the mix of fixed-price vs. time-and-material contracts, subcontracting costs, ramp-downs, and restructuring.

2) The quarter’s numbers: revenue climbed, but profit fell due to labour code exceptional charge

Topline

For Q3 FY26, HCLTech reported revenue of ₹33,872 crore. The Financial Express summary also pointed to 4.2% quarter-on-quarter CC revenue growth.

Reuters reported consolidated revenue rose 13.3% year-on-year to ₹338.72 billion (₹33,872 crore), beating analyst expectations cited by LSEG.

Profitability

The more dramatic headline: net profit fell 11.2% YoY to ₹4,076 crore.

A key driver was a one-time impact related to India’s new labour codes:

• Reuters quantified it as a ₹9.56 billion (₹956 crore) one-time hit.
• Moneycontrol also reported ₹956 crore as an exceptional item for labour law impact and explained the change in wage definition and compensation structure implications.

Margins

HCLTech’s Q3 EBIT margin came in at 18.6%, and the Financial Express noted this included an 81 bps impact of restructuring costs.

Why this matters

Investors and analysts generally “normalise” profits by adjusting for one-offs, but one-offs still matter because they:

• Affect reported EPS and near-term sentiment
• Indicate compliance or transition costs that may recur across the industry
• Can change how companies structure pay, allowances, and statutory contributions going forward

So the clean way to read Q3 is: core revenue momentum looked healthy, margins recovered to a respectable level, but reported profit got clipped by a regulatory-linked exceptional charge.

3) Deal wins surged: $3.01B TCV shows demand is “selective but real”

HCLTech posted new deal wins with total contract value (TCV) of $3.01 billion. Financial Express highlighted this as:

• 17% sequential increase
• 43.5% YoY increase

It also cited a $473 million, five-year deal with a global apparel retailer, plus multiple AI-led transformation contracts across verticals.

Reuters similarly emphasized that new deal bookings rose to about $3 billion, supporting the company’s FY26 outlook.

Why this matters

In IT services, deal wins are the leading indicator. Revenue is the lagging outcome of earlier wins; therefore, a strong TCV quarter suggests:

• The pipeline is converting, even if client decision cycles remain cautious
• The company is winning “must-do” transformation deals rather than only discretionary projects
• It has better visibility into the next few quarters of execution

Also, deal quality matters: multi-year deals can stabilise revenue but can pressure margins initially (due to transition costs). Conversely, AI-led deals may start small and scale rapidly if pilots move into production.

4) AI and digital: measurable revenue acceleration, not just buzzwords

HCLTech’s results showed AI moving from “theme” to “line item”:

• Advanced AI revenue: $146 million in the quarter
• QoQ growth: 19.9% (constant currency)

Financial Express also reported:

• Digital services revenue grew 17.7% YoY
• Digital accounted for 43.2% of services revenue

Reuters noted the AI-related revenue rose to $146 million from $100 million in the prior quarter (as context for the acceleration).

Why this matters

The global IT industry is in a transition where clients want AI benefits but also want:

• ROI clarity
• safer deployments (governance, security, compliance)
• modern data foundations

That means near-term demand often shows up as:

• data engineering, cloud modernisation, platform building
• model integration and MLOps/LLMOps
• automation in contact centres, compliance workflows, engineering productivity

So when HCLTech reports explicit AI revenue and strong QoQ growth, it suggests it’s not only talking about AI—it’s billing for it, and likely seeing follow-on work in adjacent enablers.

Financial Express also pointed to demand for the company’s AI Force platform and agentic AI/physical AI offerings, indicating HCLTech is trying to productize parts of its AI motion rather than running every project as bespoke consulting.

5) People metrics: headcount flat, attrition down, and cost discipline continues

HCLTech’s workforce and retention indicators were broadly stable:

• Total headcount: 226,379
• Net headcount change: reported as roughly flat (Financial Express mentioned a net reduction of 261; Moneycontrol framed it as 261 net additions—either way, the message is “flat”).
• Freshers added: 2,852 in Q3 FY26
• LTM attrition: 12.4%, down from 13.2% a year earlier

Financial Express also noted employee benefit expense at ₹18,867 crore, about 55.7% of revenue, broadly stable QoQ—an indicator that wage and delivery costs are being kept in check.

Why this matters

Attrition has a direct line to:

• delivery quality and project continuity
• hiring/training costs
• margin stability

When attrition is falling and headcount is flat, it usually implies:

• demand is steady but not overheated
• the company is prioritising utilisation and internal redeployment
• fresher hiring is being used to balance the cost pyramid while lateral hiring stays “muted” (as Financial Express noted)

In other words, HCLTech appears to be running a controlled operating model: hold talent, limit expensive lateral hiring, and keep bench + utilization optimized.

Bonus takeaway: dividends and cash position reinforce shareholder-friendly posture

Financial Express reported HCLTech declared an interim dividend of ₹12 per share, with:

• Record date: January 16, 2026
• Payment date: January 27, 2026
  It also mentioned dividend payout extending to the 92nd consecutive quarter and a gross cash balance of ₹34,306 crore.

Why this matters

A steady dividend track record is a signal of:

• confidence in cash flows
• willingness to return capital even when the environment is uncertain
• balance sheet comfort (especially important when large deal transitions and restructuring may require upfront investments)