India’s third-largest information technology (IT) firm by market capitalisation, HCL Technologies, will report its third-quarter results for the ongoing fiscal alter today (January 12).
HCL Tech is expected to announce a decent set of numbers despite it being a seasonally weak period for IT services companies. However, ahead of the Q3 results today, HCL Technologies shares traded with minor cuts, shedding over 1% to ₹1641.20 on the BSE.
HCL Technologies last month announced that along with the Q3 results announcement, its board will also consider the payment for the fourth interim dividend for the financial year 2025-26.
HCL Tech Q3 preview
Analysts expect HCL Tech results to be steady, with the company likely to outperform several industry peers on revenue and net profit growth, supported by its diversified portfolio spanning IT services, engineering and R&D services, and products and platforms.
Brokerages are pencilling around 11% year-on-year (YoY) growth in revenue in INR terms, led by ER&D and software business seasonality. Meanwhile, profit is seen growing 5-8% YoY.
Kotak Institutional Equities (KIE) said that the ramp-up of large deals won during the quarter and seasonality in the products business would have contributed to the overall revenue growth.
Seema Srivastava, Senior Research Analyst at SMC Global Securities, said that HCL Tech’s diversification will help cushion the impact of volatility in discretionary spending.
“EBIT margins may see moderate improvement, aided by stronger performance across the portfolio amid rising demand for cloud, network, security, and digital workplace services. HCL Tech’s strong positioning in AI-led transformation and enterprise modernisation engagements is expected to remain a key strategic highlight during the quarter,” she added.
KIE forecasts an underlying EBIT margin increase of 100 bps sequentially to 18.5%, after baking in a 70 bps impact of restructuring charges. Axis Securities has forecasted an EBIT margin improvement of 187 bps quarter-on-quarter (QoQ), led by currency tailwinds partially offset by wage hikes.
Key monitorables
KIE further expects the company to narrow the overall revenue growth guidance to 3.5-4.5% (from 3-5% earlier) and revise services revenue growth to 4.5-5.0% (from 4-5%) for FY2026 while retaining the 17-18% EBIT margin guidance.
Key concerns include management updates on deal pipeline strength, execution momentum, and evolving client decision-making trends, especially in the context of seasonal furloughs during the quarter, said Srivastava.
She said that investors will also closely track performance across core verticals such as financial services, technology, and emerging digital segments, along with commentary on operational discipline, talent management, and the company’s ability to sustain growth in a challenging macro environment.
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