HCLTech profit rises 20.34% YoY, but stock falls 4.46%
Costs grew slower than revenue, while a lower YoY tax rate supported profit; the initial stock decline was unusually large against its results history.
Filed 13 Jul 2026, 17:41 IST · after market close · HCL Technologies Ltd (HCLTECH)
Key takeaways
- Consolidated revenue grew 13.94% year on year, but expenses grew slightly faster at 13.96%, leaving operating margin almost unchanged at 19.87%.
- Net profit rose 20.34% year on year to Rs 4,626 cr, helped by a 1.66 percentage-point lower tax rate and a 59.81% fall in interest expense.
- HCLTech shares fell 4.46% after the results, far exceeding the stock's 0.77% median absolute move after its last eight results.
Price around the results
Revenue growth held up, with only a modest sequential step-up
Consolidated revenue increased 13.94% year on year and 1.76% sequentially, while operating profit grew 13.84% year on year and 2.35% from Q4FY26. The sequential improvement was supported by expenses growing 1.61%, below revenue growth, which lifted operating margin by 0.12 percentage points to 19.87%. The results were filed after market close on 13 July 2026.
Year-on-year margin was flat as costs kept pace with revenue
The year-on-year margin change was limited to a decline of 0.02 percentage points because expenses grew 13.96%, slightly faster than revenue at 13.94%. Net profit growth was stronger than operating-profit growth because interest expense fell 59.81% and the tax rate declined by 1.66 percentage points year on year. Other income contributed 5.91% of pre-tax profit, so it was a meaningful but not dominant part of reported earnings.
Margin recovered from Q4FY26 but remains below the Q3FY26 level
Operating margin rose from 19.75% in Q4FY26 to 19.87% in Q1FY27 after reaching 21.88% in Q3FY26. This marks a sequential recovery from the previous quarter, but the trend remains weaker than the Q3FY26 peak. HCLTech's margin was 1.19 percentage points above the 18.68% median for the 14 Information Technology peers that had reported.
The market reaction was unusually negative for HCLTech
The stock fell 4.46% on the reaction day, with volume at 2.02 times the reference level, and was down 4.36% on the following day. That was much larger than the 0.77% median absolute move across the last eight results reactions, when the stock rose five times and fell three times. The reaction also overlapped with a corporate action, so the full move cannot be attributed cleanly to the results alone.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹34,579 cr | ₹33,981 cr | +1.76% | +13.94% |
| Other income | ₹361 cr | ₹322 cr | +12.11% | -20.83% |
| Expenses | ₹27,709 cr | ₹27,269 cr | +1.61% | +13.96% |
| Operating profit | ₹6,870 cr | ₹6,712 cr | +2.35% | +13.84% |
| Operating margin (%) | 19.87% | 19.75% | — | — |
| Interest | ₹84 cr | ₹240 cr | -65.00% | -59.81% |
| Depreciation | ₹1,039 cr | ₹1,092 cr | -4.85% | -4.94% |
| Profit before tax | ₹6,108 cr | ₹5,702 cr | +7.12% | +17.71% |
| Tax | ₹1,482 cr | ₹1,212 cr | +22.28% | +10.19% |
| Net profit | ₹4,626 cr | ₹4,490 cr | +3.03% | +20.34% |
| EPS (₹) | ₹17.09 | ₹16.59 | +3.01% | +20.52% |
Operating margin of 19.87% compares with a Information Technology sector median of 18.68% across 14 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.46% | -3.81% |
| Next session | -4.36% | — |
| 5 sessions | +1.50% | +1.59% |
Volume on the results session was 2.02× its 20-day average.
What to watch
- Whether operating margin holds above 19.87% after the sequential recovery from 19.75%.
- Whether the tax rate remains near or below 24.26%, which supported year-on-year net-profit growth.
- Whether sequential revenue growth improves from 1.76% without expenses again outpacing revenue.