HCLTech Q2 YoY revenue up 2.2% to $3.7 billion, narrows FY27 guidance

Mumbai: HCLTech’s dollar revenue rose to $3.7 billion in the September quarter, up 2% sequentially and 2.2% year on year. In constant currency terms, revenue grew 2.3% sequentially and 2.6% year on year. EBIT margin expanded 131 basis points sequentially and 71 basis points year on year to 18.2%.The company’s services business grew 3% sequentially, generating more than $100 million in incremental revenue. About $50 million came from advanced AI and the remaining $50 million from the core business, where HCLTech is gaining market share through AI-driven services.HCLTech narrowed its FY27 company revenue growth guidance to 2.5%-4% in constant currency terms from the 1%-4% announced in Q1. Services revenue growth guidance was revised to 3%-4% from the earlier range of 1.5%-4.5%.CEO C Vijayakumar said the company retained the midpoint of both guidance ranges despite narrowing them, reflecting caution about extrapolating recent improvements in demand amid a volatile business environment.“Although we saw demand improve towards the end of the first quarter, we remained cautious because the business environment has been volatile over the past two years. We did not want to extrapolate recent positive developments too aggressively,” Vijayakumar said.He said client conversations had been encouraging, with enterprises focused on scaling AI adoption and delivering measurable business outcomes. Clients were also seeking ways to extend AI-driven productivity gains across software development and IT operations, where benefits demonstrated in smaller projects had proved harder to replicate across entire organisations.Vijayakumar said it was too early to call an industry-wide inflection point, though HCLTech expected FY27 to be better than the current year. The company will review its guidance after the third quarter. Its data centre investments are expected to contribute meaningfully from the second half of FY28, given the long gestation period of such projects.Advanced AI revenue, which includes AI factories, physical AI, agentic AI and AI advisory services, reached $219 million in the quarter, equivalent to an annualised run rate of about $876 million. It grew 28.4% sequentially and 78% year on year in constant currency terms.“Advanced AI should deliver higher margins than our existing business,” Vijayakumar said, adding that the company would reinvest gains to strengthen its AI capabilities and gain market share.CFO Shiv Walia said HCLTech retained its EBIT margin guidance of 17.5%-18.5% despite acquisition-related costs. “Despite these costs, we retained the margin range by absorbing the impact,” he said, referring to amortisation and transition services costs.HCLTech’s global workforce stood at about 2.3 lakh at the end of the Sept quarter, after increasing by 6,450 employees during the period. This represented quarterly growth of 2.9% and annualised headcount growth of 1.6%.The company added 6,136 freshers during the quarter, about 1,000 more than in the year-ago period. Around 15% were in its elite engineer category. HCLTech expects to hire about 10,000 freshers for the full year.On the US govt’s suspension of permanent labour certification processing, HCLTech CHRO Ramachandran Sundararajan said: “The number of PERM applications we have filed over the past couple of years has been very small. Therefore, we do not expect the suspension to have any material impact on our workforce plans or client engagements.”You use AI every day. Now get your AI Quotient. Take the AIQ test.