HCLTech has released its financial results for the second quarter ending in September, reporting a steady uptick in revenue even as the company adopts a more cautious outlook for the remainder of the fiscal year. According to the company's disclosure, its dollar revenue climbed to $3.7 billion during the quarter. This represents a 2% sequential increase and a 2.2% growth compared to the same period in the previous year. When measured in constant currency terms, the revenue growth appears slightly more robust, showing a 2.3% sequential rise and a 2.6% increase year-on-year.
A notable highlight of the quarter was the performance of the company’s services business, which expanded by 3% sequentially. This segment successfully generated more than $100 million in incremental revenue, with leadership attributing half of this gain—approximately $50 million—to advancements in artificial intelligence. The remaining $50 million in incremental revenue was derived from the company’s core business operations, where management noted that HCLTech is effectively gaining market share through its portfolio of AI-driven service offerings.
Profitability metrics also showed positive movement during the period. The company reported that its EBIT (earnings before interest and taxes) margin expanded by 131 basis points sequentially. On a year-on-year basis, the EBIT margin saw an improvement of 71 basis points, reaching 18.2% for the quarter. These gains in margin performance suggest a disciplined approach to operational costs amidst ongoing competitive pressures in the technology services sector.
Looking ahead to the full fiscal year, HCLTech has decided to narrow its guidance for FY27. The company now expects constant currency revenue growth to land between 2.5% and 4%, a adjustment from the wider 1%–4% range that was initially announced during the first quarter. Similarly, the guidance for services revenue growth has been revised to a range of 3%–4%, narrowing down from the previous expectation of 1.5%–4.5%.
Chief Executive Officer C. Vijayakumar addressed these adjustments, explaining that the company has intentionally retained the midpoint of both guidance ranges. He noted that these revised projections reflect a sense of caution regarding the broader business climate. According to the CEO, while there have been visible improvements in demand, the company is hesitant to extrapolate these recent trends too far into the future given the prevailing volatility in the global business environment.
The move to narrow the forecast is seen by market observers as a strategic attempt to provide a more defined trajectory for stakeholders while acknowledging the unpredictability that has characterized the recent market cycle. By narrowing the range rather than shifting the core expectations, HCLTech aims to signal confidence in its fundamental growth drivers, particularly its AI initiatives, while maintaining a buffer against potential external economic shifts.
As HCLTech moves into the subsequent quarters, the focus is expected to remain on scaling its AI-led service capabilities to sustain the momentum seen in the September quarter. With the company successfully capturing market share in both traditional core services and newer AI domains, the management team’s primary objective appears to be balancing aggressive pursuit of new opportunities with a measured approach to long-term financial guidance.
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