Abhishek Sinha
HCL Technologies is set to announce its Q2FY26 (July–September 2025) earnings on October 13, with analysts expecting an 8–10% year-on-year (YoY) increase in revenue. However, operating margins may remain under pressure due to ongoing cost challenges and higher investment in GenAI and service restructuring.
In the previous quarter (Q1FY26), HCL Tech — India’s third-largest IT company by market capitalization — posted an 8% YoY growth in revenue, even as net profit slipped nearly 10%. The company had guided for a 3–5% revenue growth in constant currency (CC) and an EBIT margin of 17–18% for FY26.
Analyst Expectations for Q2FY26
Axis Securities projects HCL Tech’s revenue to grow 3% sequentially (QoQ) and 8.3% YoY, led by strength in the BFSI and Hi-Tech verticals. However, the service segment may continue to see softness. The brokerage expects PAT to rise 11.2% QoQ but remain almost flat YoY (0.9%).
Axis also expects operating margins to improve 87 bps QoQ but decline 142 bps YoY, adding that key factors to monitor will include deal TCV, ER&D business updates, and GenAI adoption.
Kotak Institutional Equities estimates a 9.7% YoY and 4.3% QoQ growth in revenue, while adjusted PAT may improve 11.4% QoQ. The firm expects HCL Tech to maintain its 3–5% revenue growth and 17–18% EBIT margin guidance for FY26. Kotak further anticipates deal TCVs worth $2.5–3 billion, with a focus on margin recovery, impact of US tariffs, and cost take-out deals.
Focus Areas This Quarter
Brokerages believe investor focus will be on:
- Deal wins and TCV pipeline
- Margin recovery outlook
- Impact of US trade policies
- Profitability from vendor consolidation
- Trends in GenAI adoption and enterprise AI use cases
Motilal Oswal Financial Services expects 1.7% QoQ growth in constant currency, driven by vendor consolidation gains. Margins are projected to improve 50 basis points, supported by better cost management despite continued investments in GenAI and SG&A.
Motilal believes the BFSI and Hi-Tech segments will perform well, while the manufacturing vertical could face headwinds. It expects HCL Tech to retain its FY26 guidance for 3–5% YoY growth in CC terms.
Outlook
HCL Tech’s Q2 results will be closely watched for updates on:
- Large deal wins
- FY26 guidance reaffirmation
- Enterprise AI and automation opportunities
- Sustainability of margin expansion
As global IT spending remains cautious, analysts say HCL Tech’s execution strategy, cost control, and GenAI readiness will play a pivotal role in shaping its growth trajectory for the rest of FY26.
