HCLTech's Q3 PAT fell 11% at Rs 4,076 crore

HCLTech Q3 Profit Falls 3.8% Sequentially on One-Time Costs; AI Revenue Rises

Bengaluru: HCLTech, India’s third-largest IT services company, reported a 3.75% sequential decline in net profit for the third quarter, impacted by one-time restructuring costs linked to the implementation of a new domestic labour code. Net profit for the quarter stood at Rs 4,076 crore, down 11.2% year-on-year, and below market expectations.

A poll of analysts by ET had forecast an 11.8% quarter-on-quarter increase in profit to Rs 4,736 crore. While earnings missed estimates, revenue exceeded expectations. The company posted revenue growth of 3.8% sequentially to Rs 33,159 crore, beating analyst projections.

HCLTech reported standalone AI revenue of $146 million for the quarter, up from $100 million in the July–September period, underscoring increasing traction in artificial intelligence-led services. Industry leader Tata Consultancy Services (TCS) on Monday reported $1.8 billion in AI services revenue, though it too saw declines in profit on both a year-on-year and sequential basis.

Commenting on the demand environment, C Vijayakumar, chief executive and managing director of HCLTech, said conditions remain largely unchanged from the previous quarter. “The only area which is soft is the auto segment, which we feel is still struggling, but all others, we feel good,” he said.

The company’s operating margin improved by 110 basis points quarter-on-quarter to 18.6%, compared with 17.5% in the previous quarter, but declined from 19.5% a year ago. Despite margin pressures, HCLTech maintained its full-year operating margin guidance of 17–18%.

Vijayakumar said the company is focusing on new pockets of discretionary spending, particularly in areas such as artificial intelligence and semiconductors, as clients continue to selectively invest amid a cautious macroeconomic backdrop.