The profit after tax (PAT) could remain flattish on a sequential basis amid cautious client spending, with revenue also expected to stay flat quarter-on-quarter.
Estimates from five brokerages—Nomura, HDFC Securities, Nuvama Institutional Equities, Prabhudas Lilladher, and Elara Capital—have been taken into account.
Steady deal momentum and the potential retention of growth guidance offer some support.
HCL Tech’s Q1 expectations across 5 key metrics:
1. PAT: Divergent forecasts with muted QoQ trend
Projections for PAT vary significantly across brokerages. HDFC Securities expects the highest adjusted PAT at Rs 4,351 crore, up 13.7% YoY and 1% QoQ while Nuvama pegs PAT at Rs 4,312 crore (up 1.3% YoY, flat QoQ).Prabhudas Lilladher sees a slightly lower PAT of Rs 4,100 crore, down 1.7% YoY but up 1.7% QoQ.Elara Capital estimates Rs 4,154 crore, down both 2.4% YoY and 3.6% QoQ.
Nomura has not given an explicit PAT figure but highlights margin pressures.
2. Revenue: Broad-based YoY growth; sequentially flat
Revenue estimates for Q1FY26 show a healthy 7.7% – 8.2% YoY growth but a flattish quarter-on-quarter performance due to seasonality in the products business.
Nomura forecasts revenue at Rs 28,057 crore (+7.7% YoY, -0.1% QoQ).
HDFC Securities expects Rs 30,347 crore (+8.2% YoY, +0.3% QoQ).
Nuvama sees Rs 30,219 crore (+7.7% YoY, -0.1% QoQ).
Prabhudas Lilladher puts it at Rs 30,400 crore, the highest estimate (+8.2% YoY, +0.4% QoQ),
Elara Capital projects revenue at Rs 30,246.5 crore (+7.8% YoY, flat QoQ).
3. EBITDA/EBIT: Margin pressure persists sequentially
The Earnings Before Interest and Taxes (EBIT) is expected to grow modestly YoY but decline sequentially due to seasonal headwinds and cost factors.
EBIT projections range between Rs 5,163 crore and Rs 5,356 crore,
EBIT margins are forecast in the 17.1%–17.6% band:
HDFC Securities expects 17.6% (+51 bps YoY, -39 bps QoQ),
Nuvama and Nomura estimate 17.1%, indicating a QoQ decline of 30–90 bps,
Prabhudas Lilladher expects a margin of 17.3% (+20 bps YoY, -70 bps QoQ).
Margin compression remains a concern despite better YoY revenue traction.
4. Deals
Analysts anticipate steady deal wins, albeit with delayed decision cycles. Nomura sees deal wins at $2 – $2.5 billion while Prabhudas Lilladher expects slightly higher at $2.5–3 billion, driven by cost optimisation-led demand.
5. Growth guidance: 2–5% revenue growth band likely to be maintained
Across the board, analysts expect HCL Tech to retain its FY26 guidance:
Revenue growth is seen in the range of 2–5% YoY in constant currency while EBIT margin in the band of 18–19%.
Brokerages note that commentary on BFSI, client discretionary spends, and cost takeout programs will be key to understanding near-term trajectory amid global macro uncertainty.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
