HCL Tech dishes out optimistic commentary for FY26

HCL Technologies, the country’s third largest IT exporter, has projected a more optimistic view of the expected growth in the current fiscal year (FY26) compared with peers. While its full year revenue guidance of 2-5% growth at constant currency (CC) leaves a bigger gap for a manoeuvre, considering a tighter guidance range of 3-5% issued at the beginning of the previous fiscal year and which was later compressed further to 4.5-5% growth, it is still higher than the guidance of 0-3% growth given by Infosys, the bigger peer.

This indicates HCLTech expects to deliver a higher top line growth for FY26 than the top peers including TCS, Infosys, and Wipro. It has been able to stay ahead of the pack for two straight years to FY25. It reported 5.4% and 4.3% growth in reported revenue in dollar terms for FY24 and FY25 respectively while growth for the peers remained at around 4% or lower in each of the two years. In addition, the company has retained the operating margin (EBIT margin) band at 18-19%, same as for the previous year. That means it does not wish to deliver growth by compromising on profitability.

What makes HCLTech so confident at a time when the sector is facing headwinds in the form of delayed project ramp ups and slower decision making by clients amid tariff related uncertainties? During a media call after declaring the quarterly result on Tuesday, C Vijayakumar, CEO and MD, stated that the strong deal pipeline and inclusion of both, discretionary and routine, run the show projects in its portfolio should be able to help in meeting the revenue guidance. In the March 2025 quarter, it reported new deal wins with total contract value (TCV) worth $2,995 million, highest in six quarters. This was despite the cancellation of a large project due to macroeconomic uncertainties.

Moreover, 95% of the renewal projects had an incremental revenue component. Which means, while clients look for cheaper ways of technology implementation, HCLTech seeks for a higher wallet share from them. The company has been mining the existing clients more. The share of top five and top 10 clients in revenue increased to 12.7% and 20.2% in the March quarter from 10.4% and 18.8% a year ago. Also, the number of clients across majority of the TCV buckets have remained either stable or improved.

HCLTech continued to add net employees for the second consecutive quarter on a sequential basis, taking the total headcount to 2,23,420. The attrition rate fell marginally by 20 basis points to 13% from the previous quarter. For FY26, it plans to consider hiring on a quarterly basis given the difficult business scenario. Given the optimistic full year guidance and sustained deal momentum, the company is well placed to report better revenue growth than peers for FY26.