HCL Tech Q2 FY27 Results: Net Profit Rises 21% to Rs 5,132 Crore, Revenue Up 11.5%

HCL Technologies Limited (HCL Tech) reported an 11.5% YoY rise in consolidated revenue to Rs 35,620 crore in Q2 FY27, while net profit attributable to shareholders grew 21.2% to Rs 5,132 crore. The EBIT margin improved to 18.2%.

New deal bookings reached $3.26 billion, and advanced AI revenue grew 78% YoY in constant currency. The company also revised its FY27 revenue guidance, although weaker HCL Software revenue and lower first-half operating cash flow remain concerns.

This HCL Tech Q2 FY27 results analysis covers financial performance, AI growth, deal wins, margins, dividend, guidance and key risks for investors.

Table of Contents

1. HCL Tech Q2 FY27 Results: Key Highlights
2. HCL Tech Q2 FY27 Financial Performance
3. Why HCL Tech's Revenue and Profit Increased
4. HCL Tech Q2 FY27 Segment-wise Performance
5. HCL Tech Industry-wise Revenue Growth
6. HCL Tech Geographical Revenue Breakdown
7. HCL Tech Advanced AI Revenue and Growth
8. HCL Tech Deal Wins and Client Metrics
9. HCL Software Performance and Annual Recurring Revenue
10. HCL Tech FY27 Revenue and Margin Guidance
11. HCL Tech H1 FY27 Financial Performance
12. HCL Tech Cash Flow, Balance Sheet and Liquidity
13. HCL Tech Employee Headcount, Hiring and Attrition
14. HCL Tech Q2 FY27 Dividend
15. HCL Tech Acquisitions and Strategic Partnerships
16. HCL Tech Competitive Strengths and Key Risks
17. What Investors Should Watch Next
18. Conclusion

HCL Tech Q2 FY27 Results: Key Highlights

HCL Tech delivered sequential growth in revenue, operating profit and net profit during the July-September 2026 quarter. The company also reported higher deal bookings and an improvement in its core services margins.

The major highlights of the HCL Tech Q2 FY27 results were:

• Revenue: Rs 35,620 crore, up 11.5% YoY and 3.0% quarter-on-quarter (QoQ).
• Net profit attributable to shareholders: Rs 5,132 crore, up 21.2% YoY and 11.0% QoQ.
• EBITDA: Rs 7,477 crore, with an EBITDA margin of 21.0%.
• EBIT: Rs 6,465 crore, up approximately 16.5% YoY.
• EBIT margin: 18.2%, improving 131 basis points sequentially.
• Constant-currency revenue growth: 2.6% YoY and 2.3% QoQ.
• Services revenue growth: 4.0% YoY and 3.0% QoQ in constant currency.
• New deal bookings: $3,258 million, up 27% YoY.
• Advanced AI revenue: $219 million, up 78% YoY in constant currency.
• Employee headcount: 2,30,339, following net additions of 6,450 employees.
• Interim dividend: Rs 12 per equity share.
• FY27 revenue guidance: 2.5-4.0% YoY growth in constant currency.

The key HCL Technologies Q2 FY27 results are summarised below.

Particulars	Q2 FY27 Performance
Consolidated revenue	Rs 35,620 crore
Revenue growth YoY	11.5%
Revenue growth YoY (CC)	2.6%
Net profit attributable to shareholders	Rs 5,132 crore
Net profit growth YoY	21.2%
EBIT	Rs 6,465 crore
EBIT margin	18.2%
New deal bookings	$3,258 million
Advanced AI revenue	$219 million
Advanced AI revenue growth YoY (CC)	78.0%
Services revenue growth YoY (CC)	4.0%
Net employee additions	6,450
Interim dividend	Rs 12 per share
FY27 revenue growth guidance (CC)	2.5-4.0%

Note: CC refers to constant currency. YoY refers to year-on-year growth.

The results indicate an improvement in services momentum and profitability. However, the difference between reported rupee revenue growth of 11.5% and constant-currency growth of 2.6% is important when assessing underlying business performance.

To assess HCL Tech's stock performance alongside its revenue growth, margin improvement and earnings, check the HCL Tech share price with its charts and key valuation ratios.

HCL Tech Q2 FY27 Financial Performance

The HCL Technologies Q2 FY27 results show growth across revenue, EBITDA, EBIT and net profit compared with the corresponding quarter of the previous financial year.

Profitability also improved sequentially, as operating earnings increased faster than revenue.

Q2 FY27 vs Q2 FY26: Year-on-Year Comparison

The following table summarises HCL Tech's consolidated financial performance.

Particulars	Q2 FY26	Q2 FY27
Revenue	Rs 31,942 Cr	Rs 35,620 Cr
EBITDA	Rs 6,593 Cr	Rs 7,477 Cr
EBITDA margin	20.6%	21.0%
EBIT	Rs 5,550 Cr	Rs 6,465 Cr
Net profit attributable to shareholders	Rs 4,235 Cr	Rs 5,132 Cr
Net profit margin	13.3%	14.4%
Quarterly diluted EPS	Rs 15.61	Rs 18.93

Revenue increased by Rs 3,678 crore, representing growth of approximately 11.5% YoY. EBITDA grew 13.4%, while EBIT increased 16.5%.

Net profit increased by Rs 897 crore, growing faster than operating profit.

This improvement was supported by operating margin expansion and a reduction in the company's reported tax expense.

Q2 FY27 vs Q1 FY27: Quarter-on-Quarter Comparison

HCL Tech also recorded stronger financial performance compared with the June 2026 quarter.

Particulars	Q1 FY27	Q2 FY27
Revenue	Rs 34,579 Cr	Rs 35,620 Cr
EBITDA	Rs 6,870 Cr	Rs 7,477 Cr
EBIT	Rs 5,831 Cr	Rs 6,465 Cr
EBIT margin	16.9%	18.2%
Net profit attributable to shareholders	Rs 4,624 Cr	Rs 5,132 Cr
Net profit margin	13.4%	14.4%
Quarterly diluted EPS	Rs 17.06	Rs 18.93

Revenue increased by approximately 3.0% QoQ, while EBIT grew around 10.9% and net profit increased by 11.0%.

The stronger growth in operating profit relative to revenue indicates improved profitability during the quarter.

Want to understand how HCL Tech's financial performance changed between Q1 and Q2 FY27? Read the HCL Tech Q1 FY27 Results Analysis to compare earlier revenue trends, profitability, AI growth and management's outlook.

HCL Tech Earnings Per Share: Quarterly vs Trailing EPS

HCL Tech's reported earnings per share require an important distinction.

The company's investor presentation highlights diluted EPS of Rs 70.22. However, this represents trailing-12-month (LTM) diluted EPS, not the earnings generated during Q2 FY27 alone.

The statutory consolidated results report:

• Q2 FY27 diluted EPS: Rs 18.93.

• H1 FY27 diluted EPS: Rs 35.98.

• LTM diluted EPS, excluding the FY26 labour-code impact: Rs 70.22.

• LTM diluted EPS, including that impact: Rs 67.56.

The difference in trailing EPS relates to a one-time impact of the New Labour Codes recognised during FY26.

Investors calculating valuation ratios should distinguish quarterly earnings from trailing annual earnings and use a consistent adjusted or reported earnings basis.

Why HCL Tech's Revenue and Profit Increased

HCL Tech's September-quarter performance benefited from services growth, favourable currency translation, improved operating efficiency and a lower reported tax expense.

However, these factors affected revenue and profitability differently.

Revenue Growth in Rupees, US Dollars and Constant Currency

HCL Tech generates a substantial portion of its revenue from international markets. Consequently, changes in exchange rates influence its reported rupee revenue.

The different revenue growth measures are summarised below.

Q2 FY27 Revenue and Growth Performance

Revenue Metric	Q2 FY27 Performance
Revenue in INR	Rs 35,620 Cr
INR revenue growth (YoY)	11.5%
Revenue in USD	$3,724 Mn
USD revenue growth (YoY)	2.2%
Constant-currency revenue growth (YoY)	2.6%
Services revenue in USD	$3,442 Mn
Services revenue growth (YoY, CC)	4.0%

CC refers to constant currency.

The company's reported average USD-INR exchange rate increased from Rs 87.63 in Q2 FY26 to Rs 95.72 in Q2 FY27.

A weaker rupee increased the translated value of international revenue when reported in Indian currency.

Therefore, the 11.5% increase in rupee revenue should not be interpreted as equivalent to underlying business growth.

Constant-currency growth removes the effects of currency movements and provides a more comparable measure of operating performance.

The important distinction for investors is that HCL Tech's consolidated business grew 2.6% YoY in constant currency, while its Services business grew 4.0%.

Operating Margin Improved to 18.2%

HCL Tech's consolidated EBIT margin increased from 16.9% in Q1 FY27 to 18.2% in Q2 FY27.

The company benefited from lower employee and selling expenses relative to revenue, although certain other costs increased.

Q1 FY27 Operating Costs and Margins

Cost Metric	Q1 FY27
Employee expenses/revenue	56.9%
Outsourcing costs/revenue	14.8%
SG&A expenses/revenue	12.0%
R&D expenses/revenue	1.6%
EBIT margin	16.9%

Q2 FY27 Operating Costs and Margins

Cost Metric	Q2 FY27
Employee expenses/revenue	55.6%
Outsourcing costs/revenue	15.0%
SG&A expenses/revenue	11.5%
R&D expenses/revenue	1.9%
EBIT margin	18.2%

Employee expenses increased from Rs 19,692 crore to Rs 19,828 crore sequentially, a relatively modest increase compared with revenue growth.

Selling, general and administrative expenses declined as a proportion of revenue, providing further support to operating profitability.

However, outsourcing costs and research and development expenditure increased relative to revenue.

The overall improvement indicates that expense efficiency and revenue growth more than offset these increases.

Restructuring Costs Affected Reported Profitability

HCL Tech disclosed that restructuring costs reduced its Q2 FY27 EBIT margin by 84 basis points.

The reported EBIT margin of 18.2% includes these costs.

Adding back the disclosed impact gives an indicative EBIT margin of approximately 19.0%.

Similarly, restructuring costs affected the company's reported net income margin by 62 basis points.

Investors should distinguish:

• Reported EBIT margin: 18.2%, including restructuring costs.

• Indicative EBIT margin excluding the restructuring impact: Approximately 19.0%.

The adjusted calculation helps assess operating performance before these expenses but is not a substitute for the reported financial result.

Investors should also monitor whether restructuring expenses continue in subsequent quarters.

Lower Tax Expense Supported Net Profit Growth

HCL Tech's reported consolidated tax expense declined despite higher profit before tax.

The company's tax expense decreased from Rs 1,466 crore in Q2 FY26 to Rs 1,335 crore in Q2 FY27.

Its effective tax rate, calculated using statutory profit-before-tax and tax figures, declined from approximately 25.7% to 20.6%.

This reduction supported stronger net profit growth relative to EBIT growth.

However, a lower effective tax rate in one quarter does not necessarily indicate a permanent reduction in the company's future tax burden.

What Drove the Increase in Net Profit?

Three developments explain much of HCL Tech's Q2 FY27 profit improvement:

1. Higher revenue: Consolidated revenue increased by Rs 3,678 crore YoY.

2. Better operating profitability: EBIT increased 16.5%, with improvements in cost efficiency.

3. Lower tax expense: The reported effective tax rate declined significantly compared with Q2 FY26.

Together, these factors helped net profit attributable to shareholders increase 21.2% YoY.

HCL Tech Q2 FY27 Segment-wise Performance

HCL Tech operates through three major business segments: IT and Business Services, Engineering and R&D Services, and HCL Software.

Their performance was uneven during Q2 FY27, with growth in services partly offset by a decline in software revenue.

Segment-wise Revenue Breakdown

IT and Business Services remained the largest contributor to consolidated revenue.

Q2 FY27 Segment-wise Revenue

Segment	Q2 FY27 External Revenue
IT and Business Services	Rs 26,938 Cr
Engineering and R&D Services	Rs 5,973 Cr
HCL Software	Rs 2,709 Cr
Total	Rs 35,620 Cr

Q2 FY27 Segment-wise Revenue Growth

Segment	YoY CC Growth
IT and Business Services	4.4%
Engineering and R&D Services	2.1%
HCL Software	-11.2%
Total	2.6%

Note: Rupee revenue figures represent sales to external customers. The constant-currency segment growth rates follow HCL Tech's investor disclosures, which incorporate the company's segment reporting and inter-segment accounting.

1. IT and Business Services

IT and Business Services is HCL Tech's largest business segment, covering enterprise applications, infrastructure, cloud services, digital transformation and related technology services.

During Q2 FY27, the segment reported:

• External revenue of Rs 26,938 crore.
• YoY constant-currency growth of 4.4%.
• QoQ constant-currency growth of 2.7%.
• EBIT margin of 18.6%, compared with 17.0% in Q1 FY27.

The segment contributed approximately 75.6% of consolidated external revenue.

Its EBIT margin improved by 160 basis points sequentially and 229 basis points compared with Q2 FY26.

This margin expansion was important because IT and Business Services represents the largest portion of HCL Tech's business.

Improving profitability in this segment can therefore have a meaningful influence on consolidated operating margins.

2. Engineering and R&D Services

HCL Tech's Engineering and R&D Services business provides product engineering, embedded systems, research and specialised technology development services.

The segment recorded:

• External revenue of Rs 5,973 crore.
• YoY constant-currency growth of 2.1%.
• QoQ constant-currency growth of 4.1%.
• EBIT margin of 15.2%.

Sequential revenue growth improved during the quarter. However, profitability remained under pressure.

The segment's EBIT margin declined from 17.5% in Q2 FY26 and 15.6% in Q1 FY27 to 15.2% in Q2 FY27.

The decline indicates that revenue recovery has not yet translated into a comparable improvement in profitability.

Investors should monitor whether the segment can sustain revenue growth while improving margins.

3. HCL Software

HCL Software develops and commercialises enterprise software products used across automation, data management, cybersecurity and digital operations.

During Q2 FY27, the business reported:

• External revenue of Rs 2,709 crore.
• Revenue decline of 11.2% YoY in constant currency.
• Revenue decline of 5.8% QoQ in constant currency.
• EBIT margin of 20.1%, compared with 17.6% in Q1 FY27.

Although the software segment reported a sequential improvement in operating margin, its revenue performance remained weak.

The Q2 FY27 EBIT margin was also substantially below the 26.5% reported in Q2 FY26.

HCL Tech's segment presentation shows HCL Software contributing 7.9% of revenue before inter-segment eliminations. Its share of consolidated revenue from external customers was approximately 7.6%.

For investors, the key issue is whether improved subscription-related metrics can eventually support more consistent software revenue growth.

HCL Tech Industry-wise Revenue Growth

HCL Tech serves multiple industries, including financial services, manufacturing, technology, healthcare, telecommunications and retail.

Industry-level performance varied significantly during Q2 FY27.

The following figures relate specifically to HCL Tech's Services business.

Industry-wise Revenue Mix and Growth

The following tables show the revenue contribution of each industry vertical and its year-on-year constant-currency growth.

Q2 FY27 Industry-wise Revenue Mix

Industry Vertical	Revenue Mix
Financial Services	22.4%
Manufacturing	18.3%
Technology & Services	14.3%
Life Sciences & Healthcare	13.8%
Telecom, Media & Entertainment	12.0%
Retail & CPG	10.5%
Public Services	8.8%

Q2 FY27 Industry-wise Revenue Growth

Industry Vertical	YoY CC Growth
Financial Services	7.1%
Manufacturing	3.9%
Technology & Services	5.9%
Life Sciences & Healthcare	-2.1%
Telecom, Media & Entertainment	-2.1%
Retail & CPG	14.0%
Public Services	1.2%

Source: HCL Tech Q2 FY27 Investor Release. Revenue mix and growth are for the Services business.

Financial Services Remained the Largest Vertical

Financial Services contributed 22.4% of services revenue and grew 7.1% YoY in constant currency.

The segment includes technology services for financial institutions and related enterprises.

Technology modernisation, cloud adoption, data platforms and AI-related services represent areas of demand within this industry.

Given its significant revenue contribution, the performance of Financial Services remains an important factor in HCL Tech's services growth.

Retail and CPG Recorded the Fastest Growth

Retail and Consumer Packaged Goods recorded 14.0% YoY constant-currency growth, the highest among the company's disclosed industry verticals.

The segment accounted for 10.5% of services revenue.

This growth provided support to overall services performance and helped diversify growth beyond HCL Tech's larger financial services and manufacturing exposures.

Healthcare and Telecommunications Remained Weak

Two major verticals reported negative growth:

• Life Sciences and Healthcare: Revenue declined 2.1% YoY in constant currency.

• Telecommunications, Media, Publishing and Entertainment: Revenue also declined 2.1% YoY in constant currency.

The performance of these businesses indicates that client demand remained uneven across industries.

Although total services revenue improved, some industries continued to experience slower technology spending or project execution.

Investors should monitor whether these verticals return to growth in the coming quarters.

HCL Tech Geographical Revenue Breakdown

HCL Tech generates most of its revenue from overseas markets, particularly the United States and Europe.

Geographical performance is therefore important for understanding demand trends, currency exposure and future growth opportunities.

Geography-wise Revenue Mix

The following tables show the geographical revenue contribution and year-on-year constant-currency growth for HCL Tech's Services business.

Q2 FY27 Geography-wise Revenue Mix

Geography	Revenue Mix
USA	56.1%
Europe	26.9%
Rest of the World	13.6%
India	3.4%

Q2 FY27 Geography-wise Revenue Growth

Geography	YoY CC Growth
USA	3.5%
Europe	-0.3%
Rest of the World	11.4%
India	21.8%

Revenue mix and growth are for HCL Tech Services.

United States

The United States remained HCL Tech's largest market, contributing 56.1% of services revenue.

Revenue from the region increased 3.5% YoY in constant currency.

Given its contribution, changes in US enterprise technology spending, project budgets and outsourcing demand can materially influence the company's overall performance.

Europe

Europe accounted for 26.9% of services revenue.

Revenue from the region declined 0.3% YoY in constant currency.

The contraction indicates relatively weaker regional growth compared with the United States.

Because Europe remains HCL Tech's second-largest geographical market, its recovery is important for broader services growth.

India and Rest of the World

India recorded 21.8% YoY constant-currency growth, making it the fastest-growing geography during Q2 FY27.

However, India accounted for only 3.4% of services revenue.

The Rest of the World segment contributed 13.6% of revenue and grew 11.4% YoY in constant currency.

These markets provide additional growth opportunities, although their smaller revenue contributions mean they cannot independently offset a significant slowdown in larger overseas markets.

HCL Tech Advanced AI Revenue and Growth

Advanced AI was one of the fastest-growing areas of HCL Tech's business during Q2 FY27.

The company reported strong sequential and year-on-year growth in revenue generated from its advanced AI offerings.

Advanced AI Revenue Performance

Metric	Q2 FY27
Advanced AI revenue	$219 Mn
QoQ constant-currency growth	28.4%
YoY constant-currency growth	78.0%
Annualised quarterly revenue run-rate	$876 Mn
Approximate share of group USD revenue	5.9%

Advanced AI revenue increased 78% YoY and 28.4% QoQ in constant currency.

The company reported an annualised revenue run-rate of $876 million, calculated by multiplying quarterly advanced AI revenue of $219 million by four.

However, this figure does not represent contracted annual recurring revenue or guaranteed future sales.

What Is Driving HCL Tech's AI Business?

HCL Tech is expanding its AI capabilities across enterprise operations, technology infrastructure, engineering and automation.

Its disclosed advanced AI engagements include:

• AI infrastructure: Developing and operating AI-native infrastructure and AI Factory environments.

• Manufacturing automation: Using the VisionX platform for AI-powered visual quality inspection.

• Enterprise automation: Applying agentic AI to business processes and enterprise operations.

• Engineering transformation: Integrating AI into engineering, manufacturing and supply-chain workflows.

• AI-enabled workplace services: Supporting automation and technology modernisation across enterprise environments.

The growing number of AI-related projects indicates increasing customer engagement with HCL Tech's offerings.

However, advanced AI revenue represented approximately 5.9% of total reported quarterly US dollar revenue.

Its contribution is becoming more meaningful, but it remains relatively small compared with the company's broader services business.

What Does AI Growth Mean for Investors?

The reported AI growth provides evidence that HCL Tech is generating revenue from advanced AI services rather than relying solely on technology announcements or partnerships.

However, three factors remain important:

1. Whether AI revenue continues growing at a sustainable rate.

2. Whether AI engagements generate additional revenue across existing enterprise relationships.

3. Whether AI-related services support profitability and consolidated revenue growth.

The long-term financial importance of advanced AI will depend on its ability to contribute to larger, repeatable revenue streams and operating earnings.

HCL Tech Deal Wins and Client Metrics

New contract bookings are an important indicator of potential future revenue opportunities for IT services companies.

HCL Tech reported a significant increase in deal bookings during Q2 FY27.

New Deal Bookings

The company reported new deal wins with a total contract value of $3,258 million.

Metric	Value
Q1 FY27 deal bookings	$2,407 Mn
Q2 FY27 deal bookings	$3,258 Mn
H1 FY27 combined bookings	$5,665 Mn
Q2 FY27 YoY bookings growth	27%

Combined deal bookings reached approximately $5.67 billion in H1 FY27.

Management described first-half bookings as a record for the company.

The increase suggests stronger contract signing activity and provides potential revenue opportunities over future periods.

However, total contract value is not equivalent to immediate revenue.

Revenue recognition depends on contract duration, execution schedules, customer requirements and commercial terms.

Major Deal Wins During Q2 FY27

Several disclosed contracts focused on enterprise AI, technology modernisation and infrastructure services.

• AI Factory: A US-based AI-native company selected HCL Tech as a strategic partner for its AI Factory, involving infrastructure, networking, cybersecurity and AI platforms.

• AI-native cloud infrastructure: A US-based neocloud provider selected HCL Tech to build and scale AI-native infrastructure capabilities.

• Manufacturing: A European manufacturer selected HCL Tech's VisionX platform for AI-powered visual inspection and quality assurance.

• Retail: A US-based retail chain selected HCL Tech to modernise network operations across more than 1,350 stores, distribution centres and corporate offices.

• Enterprise transformation: A European FMCG company selected HCL Tech for AI-led modernisation of applications, cloud, networks, digital workplace and cybersecurity operations.

These engagements demonstrate demand across different technology spending categories.

For investors, the important factor is how efficiently new contracts convert into recognised revenue and operating profit.

HCL Tech Client Metrics

HCL Tech also reported an increase in several large-client categories during the quarter.

The following tables compare client numbers in June and September 2026.

June 2026 Client Metrics

Client Category	June 2026
$100 Mn+ clients	23
$50 Mn+ clients	60
$20 Mn+ clients	155
$10 Mn+ clients	286
$5 Mn+ clients	431
$1 Mn+ clients	987

September 2026 Client Metrics

Client Category	September 2026
$100 Mn+ clients	23
$50 Mn+ clients	62
$20 Mn+ clients	161
$10 Mn+ clients	291
$5 Mn+ clients	433
$1 Mn+ clients	981

Client categories are based on trailing-12-month revenue.

The number of clients generating at least $50 million annually increased from 60 to 62.

Clients in the $20 million-plus category increased from 155 to 161, while the $10 million-plus category grew from 286 to 291.

However, the number of $1 million-plus clients declined from 987 to 981 sequentially.

Client Concentration

HCL Tech reported a reduction in revenue concentration among its largest customers.

The top 10 clients accounted for 18.4% of revenue on an LTM basis, compared with 18.7% in June 2026.

This indicates a modest improvement in revenue diversification across major customers.

Although a larger base of high-value clients can support revenue stability, contract renewals and client spending patterns remain important to future performance.

HCL Software Performance and Annual Recurring Revenue

HCL Software reported mixed operating trends during Q2 FY27.

While segment revenue declined, annual recurring revenue increased, indicating a difference between current recognised revenue and the annualised value of recurring software obligations.

HCL Software Revenue and ARR

Metric	Q2 FY27
Software segment revenue	$294 Mn
Annual recurring revenue (ARR)	$1,134 Mn
ARR YoY constant-currency growth	7.8%
Software EBIT margin	20.1%

The $294 million software segment revenue figure includes inter-segment revenue and therefore differs from revenue earned from external customers in the statutory consolidated results.

HCL Software's ARR increased from $1,063 million in June 2026 to $1,134 million in September 2026.

The business also reported $15 million of Jaspersoft revenue during Q2 FY27.

What Is ARR and Why Does It Matter?

Annual recurring revenue represents the annualised value of active term subscriptions, software support obligations and Software-as-a-Service contracts under HCL Software's reporting methodology.

It is an operating measure rather than a forecast of future revenue.

ARR excludes certain non-recurring components, including upfront perpetual licence revenue and professional services.

Therefore, growth in ARR does not necessarily translate into equivalent growth in total software revenue during the same period.

Why HCL Software Remains an Important Monitoring Area

Despite ARR increasing 7.8% YoY in constant currency, HCL Software's overall revenue declined 11.2%.

Its EBIT margin also remained below the corresponding quarter of the previous financial year.

The difference between recurring revenue growth and total segment revenue performance indicates that investors need to examine the software business beyond a single metric.

The key developments to monitor are:

• Recovery in recognised software revenue.
• Continued growth in ARR.
• Revenue contribution from acquired software products.
• Sustainability of segment operating margins.
• Changes in the mix of recurring and non-recurring revenue.

Improving ARR may support future revenue visibility, but sustained improvement in recognised revenue and profitability remains necessary.

HCL Tech FY27 Revenue and Margin Guidance

HCL Tech revised its FY27 revenue growth guidance following its September-quarter performance.

The company increased the lower end of its consolidated and services revenue growth expectations while retaining the upper end of consolidated revenue guidance.

Revised FY27 Guidance

The following tables compare HCL Tech's earlier and revised FY27 revenue growth and EBIT margin guidance.

Earlier FY27 Guidance

Metric	Earlier Guidance
Company revenue growth (CC)	1.0-4.0%
Services revenue growth (CC)	1.5-4.5%
EBIT margin	17.5-18.5%

Revised FY27 Guidance

Metric	Revised Guidance
Company revenue growth (CC)	2.5-4.0%
Services revenue growth (CC)	3.0-4.0%
EBIT margin	17.5-18.5%

What Changed in the Guidance?

HCL Tech raised the lower end of its consolidated constant-currency revenue growth guidance from 1.0% to 2.5%.

The upper end remained unchanged at 4.0%.

For the Services business, the company:

• Increased the lower end of revenue growth guidance from 1.5% to 3.0%.
• Reduced the upper end from 4.5% to 4.0%.
• Retained its consolidated EBIT margin guidance of 17.5-18.5%.

The revised guidance narrows the expected revenue growth range.

This suggests improved visibility around management's expected full-year performance.

However, the revision should not be interpreted as an increase in the maximum growth rate expected for FY27.

What Does the Guidance Mean for Investors?

Management expects positive full-year constant-currency revenue growth, with Services continuing to contribute to operating performance.

The unchanged EBIT margin guidance indicates that the company continues to target profitability within its previously communicated range.

Investors should monitor:

• Revenue conversion from recently secured deals.
• Performance of the Services business.
• Recovery in HCL Software revenue.
• Margin sustainability after restructuring expenses.
• Growth trends in major overseas markets.

The remaining two quarters of FY27 will be important for determining whether HCL Tech achieves its revised guidance.

HCL Tech H1 FY27 Financial Performance

HCL Tech's half-year financial results provide a broader view of business performance beyond the September quarter.

The company reported higher revenue, operating earnings and net profit during the six months ended 30 September 2026.

H1 FY27 vs H1 FY26 Financial Results

The following tables compare HCL Tech's consolidated financial performance for H1 FY26 and H1 FY27.

H1 FY26 Consolidated Financial Performance

Particulars	H1 FY26
Revenue	Rs 62,291 Cr
EBIT	Rs 10,492 Cr
Consolidated profit after tax	Rs 8,080 Cr
Diluted EPS	Rs 29.78

H1 FY27 Consolidated Financial Performance

Particulars	H1 FY27
Revenue	Rs 70,199 Cr
EBIT	Rs 12,296 Cr
Consolidated profit after tax	Rs 9,758 Cr
Diluted EPS	Rs 35.98

Source: Consolidated Ind AS financial results for the six months ended 30 September 2026 and 2025.

During H1 FY27:

• Revenue increased approximately 12.7% YoY.
• EBIT increased approximately 17.2% YoY.
• Consolidated profit after tax increased approximately 20.8% YoY.
• Diluted EPS increased from Rs 29.78 to Rs 35.98.

The company's earnings growth exceeded revenue growth during the first half of FY27.

This indicates an improvement in profitability over the six months.

A distinction is that consolidated profit after tax includes non-controlling interests, where applicable. H1 FY27 profit attributable specifically to HCL Tech shareholders was Rs 9,756 crore.

Consolidated vs Standalone Financial Results

HCL Tech's standalone Q2 FY27 financial results reported:

• Revenue of Rs 15,445 crore.
• Profit after tax of Rs 4,302 crore.

Standalone profit declined sequentially from Rs 7,025 crore in Q1 FY27.

The June-quarter standalone results included substantially higher other income, influencing the sequential comparison.

For analysing the overall HCL Tech group, consolidated financial results provide a more representative picture because they include the performance of subsidiaries and overseas operations.

HCL Tech Cash Flow, Balance Sheet and Liquidity

HCL Tech maintained a substantial net cash position at the end of September 2026.

However, first-half operating cash flow declined compared with the previous year, despite growth in reported profit.

This makes cash conversion an important aspect of the Q2 FY27 results analysis.

Operating Cash Flow Performance

The following tables compare HCL Tech's operating cash flow and capital expenditure during H1 FY26 and H1 FY27.

H1 FY26 Operating Cash Flow

Metric	H1 FY26
Operating cash flow	Rs 9,608 Cr
Purchase of PPE and intangibles	Rs 784 Cr

H1 FY27 Operating Cash Flow

Metric	H1 FY27
Operating cash flow	Rs 7,750 Cr
Purchase of PPE and intangibles	Rs 999 Cr

HCL Tech's operating cash flow declined approximately 19.3% YoY in H1 FY27.

Meanwhile, expenditure on property, plant, equipment and intangible assets increased.

The decline in operating cash generation despite higher reported earnings indicates a need to monitor working-capital movements and cash conversion.

Q2 FY27 Operating and Free Cash Flow

For the September quarter alone, HCL Tech reported:

• Operating cash flow: Rs 4,758 crore.

• Free cash flow: Rs 4,128 crore.

• Capital expenditure on property, plant, equipment and intangibles: Rs 630 crore.

Free cash flow was calculated after deducting the stated capital expenditure from operating cash flow.

The company also reported an LTM free-cash-flow-to-net-income ratio of 87% under its reporting methodology, excluding the specified FY26 labour-code impact.

Although quarterly cash generation remained positive, the decline in first-half operating cash flow requires monitoring.

HCL Tech Net Cash Position

The company's balance sheet remained net cash positive as of 30 September 2026.

The following tables compare HCL Tech's cash balances, borrowings and net cash position as of 31 March 2026 and 30 September 2026.

Net Cash Position as of 31 March 2026

Metric	31 Mar 2026
Cash and cash equivalents	Rs 8,265 Cr
Gross cash	Rs 33,447 Cr
Borrowings	Rs 159 Cr
Net cash	Rs 33,288 Cr

Net Cash Position as of 30 September 2026

Metric	30 Sep 2026
Cash and cash equivalents	Rs 10,046 Cr
Gross cash	Rs 25,457 Cr
Borrowings	Rs 954 Cr
Net cash	Rs 24,503 Cr

HCL Tech's reported net cash declined by Rs 8,785 crore between March and September 2026.

The company continued to maintain more cash and treasury investments than reported borrowings.

However, its liquidity position reduced during the period.

HCL Tech's reported net cash definition deducts borrowings from gross cash but does not deduct lease liabilities.

The statutory cash-flow statement also reflects substantial cash deployment during H1 FY27, including dividend payments and acquisitions.

Working Capital and Receivables

Unbilled receivables increased from Rs 7,956 crore in March 2026 to Rs 9,420 crore in September 2026.

Meanwhile, days sales outstanding increased from 56 days in September 2025 to 58 days in September 2026.

However, this represented an improvement from 59 days in June 2026.

Higher receivables can delay the conversion of reported revenue into cash.

Investors should therefore monitor whether receivables and unbilled revenue convert into cash as the business expands.

Return on Invested Capital

HCL Tech reported trailing-12-month return on invested capital (ROIC) of 41.2% in September 2026, compared with 40.7% in June 2026.

The Services business reported ROIC of 49.4%.

These company-reported measures exclude the specified one-time FY26 labour-code impact.

The figures indicate efficient use of invested capital under HCL Tech's reporting methodology.

However, investors should assess ROIC alongside free cash flow, acquisition spending and changes in the company's balance sheet.

HCL Tech Employee Headcount, Hiring and Attrition

Employee utilisation, recruitment and staff retention are important indicators for IT services companies because employee expenses represent a significant portion of operating costs.

HCL Tech returned to positive net hiring during Q2 FY27.

Workforce Performance

The following tables compare HCL Tech's employee headcount, hiring, attrition and workforce composition in Q1 FY27 and Q2 FY27.

Q1 FY27 Workforce Performance

Metric	Q1 FY27
Total employees	2,23,889
Net employee additions	-3,292
Freshers added	1,056
LTM attrition	12.7%
Women employees	29.6%

Q2 FY27 Workforce Performance

Metric	Q2 FY27
Total employees	2,30,339
Net employee additions	6,450
Freshers added	6,136
LTM attrition	12.8%
Women employees	30.0%

HCL Tech added a net 6,450 employees during the September quarter after reporting a reduction of 3,292 employees in Q1 FY27.

The company recruited 6,136 freshers during Q2 FY27.

The workforce expansion suggests increased investment in delivery capacity and future business requirements.

However, additional hiring also increases the importance of maintaining employee utilisation and cost efficiency.

Employee Attrition

HCL Tech's trailing-12-month attrition rate increased marginally from 12.7% to 12.8%.

The reported attrition measure excludes involuntary attrition and digital process operations under the company's methodology.

Stable retention can help limit replacement and recruitment costs, although staff productivity and wage expenses remain important operating variables.

Revenue Per Employee

Annualised revenue per employee was $65,400 in Q2 FY27, compared with $65,500 in Q1 FY27.

The metric increased 2.4% YoY but declined approximately 0.1% sequentially.

For investors, the focus should be on whether expanded hiring supports future revenue growth without creating sustained pressure on employee utilisation and margins.

HCL Tech Q2 FY27 Dividend

HCL Tech's board declared an interim dividend of Rs 12 per equity share for FY2026-27.

The dividend was announced alongside the company's financial results on 12 October 2026.

Dividend Details

Particulars	Details
Interim dividend	Rs 12 per share
Face value	Rs 2 per share
Record date	16 October 2026
Payment date	26 October 2026
Announcement date	12 October 2026
Financial year	FY2026-27

The company's consolidated financial results report total interim dividends of Rs 36 per share relating to the first six months of FY27.

The declared dividend reflects continued cash distributions to shareholders.

However, dividend payments should be assessed alongside cash flow, acquisitions, capital expenditure and the company's net cash position.

Investors holding shares should also verify applicable exchange settlement and eligibility requirements for the declared record date.

HCL Tech Acquisitions and Strategic Partnerships

HCL Tech continued investing in enterprise software, engineering capabilities and AI-related services during and around Q2 FY27.

These investments are intended to expand its technology offerings and strengthen customer relationships.

Recent Acquisitions

1. HPE Telco Solutions Business

HCL Tech completed the acquisition of the Telco Solutions business from Hewlett Packard Enterprise in August 2026.

The acquisition expands its telecommunications engineering capabilities and strengthens its offerings in AI-led network technologies.

2. Guardian India Operations

HCL Tech completed the acquisition of Guardian India Operations Private Limited in August 2026.

The transaction supports its relationship with the US-based insurance company and expands capabilities associated with the partnership.

3. Jaspersoft

HCL Software completed its acquisition of Jaspersoft in July 2026.

Jaspersoft provides reporting and analytics technology, expanding HCL Software's data management portfolio.

The acquired business contributed $15 million of revenue during Q2 FY27.

4. Robotiq.ai

HCL Software announced an agreement to acquire Robotiq.ai in September 2026.

The acquisition is intended to strengthen enterprise agentic automation capabilities.

The announcement should not be interpreted as confirmation that the transaction had closed by 30 September 2026.

Anthropic Partnership

On 12 October 2026, HCL Tech announced a Global Premier Partnership with Anthropic.

The collaboration focuses on expanding governed agentic AI adoption across global enterprises.

Major initiatives include:

• Establishing a dedicated Anthropic Business Unit.
• Creating a Centre of Excellence for enterprise AI solutions.
• Developing services using Anthropic's Claude-related capabilities.
• Integrating AI capabilities into selected HCL Software enterprise products.

The partnership was announced after the September quarter ended. Therefore, it should not be treated as a driver of Q2 FY27 reported revenue.

Its potential contribution relates to future technology offerings, client engagements and software capabilities.

What Do These Investments Mean for Investors?

Acquisitions and strategic partnerships may help HCL Tech expand into new technology areas and strengthen its enterprise relationships.

However, the financial benefits depend on several factors:

• Successful integration of acquired businesses.
• Revenue contribution from acquired products and services.
• Retention of customers and specialised employees.
• Operating profitability of expanded businesses.
• Capital allocation and acquisition costs.

Investors should monitor both the strategic contribution and financial returns from these investments.

HCL Tech Competitive Strengths and Key Risks

HCL Tech's Q2 FY27 financial results demonstrate several operating strengths, particularly in services, deal bookings and advanced AI.

However, the results also highlight challenges affecting software revenue, engineering profitability and operating cash flow.

HCL Tech's Competitive Strengths

• Diversified business portfolio: HCL Tech operates across IT services, engineering, research and enterprise software, providing exposure to multiple technology spending categories.

• Large international presence: Its operations across major global markets allow it to serve multinational enterprises and maintain a geographically diversified customer base.

• Strong deal booking momentum: New bookings of $3.26 billion in Q2 and approximately $5.67 billion in H1 FY27 provide opportunities for future revenue conversion.

• Expanding advanced AI business: Advanced AI revenue increased 78% YoY in constant currency, demonstrating growing commercial activity in AI-related services.

• Improving core services profitability: IT and Business Services reported an EBIT margin of 18.6%, supporting consolidated operating performance.

• Large-client relationships: The number of clients generating at least $50 million in annual revenue increased to 62, indicating expansion among high-value customer accounts.

• Net cash balance sheet: Reported net cash of Rs 24,503 crore provides financial flexibility, although the balance declined during H1 FY27.

Key Risks Investors Should Monitor

• Moderate underlying revenue growth: Constant-currency revenue increased only 2.6% YoY, significantly below the reported rupee growth rate of 11.5%.

• HCL Software revenue decline: Software revenue contracted 11.2% YoY in constant currency despite increasing annual recurring revenue.

• Engineering margin pressure: Engineering and R&D Services reported a decline in EBIT margin to 15.2%, compared with 17.5% a year earlier.

• Uneven industry and geographical performance: Europe, Life Sciences and Healthcare, and Telecommunications reported negative constant-currency revenue growth.

• Cash-flow conversion: H1 FY27 operating cash flow declined despite higher reported profits, making working-capital management important.

• Acquisition and integration risks: Recently acquired businesses require effective integration, disciplined capital allocation and sustained customer demand.

• Employee and operating costs: Workforce expansion, wage inflation, subcontracting expenses and restructuring costs may affect future margins.

• Global macroeconomic risks: Changes in enterprise technology spending, particularly in the United States and Europe, could influence growth.

• Currency fluctuations: Exchange-rate movements can affect reported revenue, profitability and comparability across periods.

These risks should be evaluated alongside the company's growth opportunities rather than in isolation.

What Investors Should Watch Next

HCL Tech's Q2 FY27 results indicate improving operating momentum, but the sustainability of revenue growth, margins and cash generation will determine future financial performance.

The following factors are particularly important for investors.

Factor	What investors should track
Constant-currency growth	Whether underlying revenue growth accelerates
FY27 guidance	Progress towards 2.5-4.0% company revenue growth
EBIT margin	Sustainability within the 17.5-18.5% guided range
Deal conversion	Revenue generated from new contract wins
Advanced AI	Continued growth and contribution to group revenue
HCL Software	Revenue recovery and ARR conversion
Engineering services	Improvement in segment profitability
Cash flow	Recovery in operating cash conversion
Hiring and utilisation	Workforce productivity and employee costs
Client demand	Technology spending across major overseas markets

Three developments deserve particular attention.

First, underlying revenue growth must be assessed separately from currency movements. The difference between reported rupee revenue growth and constant-currency growth remains significant.

Second, deal bookings and AI-related revenue need to translate into sustained operating performance. Strong contract signings are positive indicators, but their financial contribution depends on execution.

Third, earnings growth needs to be supported by cash generation. The decline in H1 FY27 operating cash flow makes working capital and free cash flow important monitoring indicators.

The next two quarters will provide further clarity on whether HCL Tech can sustain its services growth, improve weaker segments and remain within its full-year profitability guidance.

Conclusion

HCL Tech's Q2 FY27 results reflected higher revenue, stronger profitability and an improvement in core services performance.

Consolidated revenue increased 11.5% YoY to Rs 35,620 crore, while net profit attributable to shareholders rose 21.2% to Rs 5,132 crore. The company's EBIT margin improved to 18.2%, supported by better operating efficiency.

New deal bookings of $3.26 billion, advanced AI revenue growth of 78% and an increase in the lower end of FY27 revenue guidance were important developments.

However, the decline in HCL Software revenue, pressure on Engineering and R&D margins, and weaker first-half operating cash flow indicate that performance remains uneven across the business.

For investors, the sustainability of constant-currency revenue growth, deal conversion, operating margins and cash generation will be more important than headline rupee revenue growth alone.

Frequently Asked Questions

1. What is HCL Tech's net profit in Q2 FY27?

HCL Technologies reported consolidated net profit attributable to shareholders of Rs 5,132 crore in Q2 FY27, up 21.2% YoY from Rs 4,235 crore. Profit increased 11.0% sequentially from Rs 4,624 crore in Q1 FY27.

2. What was HCL Tech's revenue in Q2 FY27?

HCL Tech reported consolidated revenue of Rs 35,620 crore in Q2 FY27, representing 11.5% YoY growth. Revenue increased 3.0% QoQ, while US dollar revenue grew 2.2% YoY to $3,724 million. Constant-currency revenue growth stood at 2.6% YoY.

3. What is HCL Tech's FY27 revenue and margin guidance?

HCL Tech revised its FY27 consolidated revenue growth guidance to 2.5-4.0% YoY in constant currency. Services revenue is expected to grow 3.0-4.0%, while the company's EBIT margin guidance remains unchanged at 17.5-18.5%.

4. What is the HCL Tech Q2 FY27 dividend record date?

HCL Tech declared an interim dividend of Rs 12 per equity share on 12 October 2026. The dividend record date is 16 October 2026, and the scheduled payment date is 26 October 2026.

5. How much did HCL Tech's advanced AI business grow in Q2 FY27?

HCL Tech's advanced AI revenue reached $219 million in Q2 FY27, increasing 78.0% YoY and 28.4% QoQ in constant currency. Its annualised quarterly revenue run-rate was $876 million, equivalent to approximately 5.9% of total quarterly US dollar revenue.

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Financial figures are based on official HCL Tech disclosures, including unaudited consolidated financial results subject to limited review, published on 12 October 2026.