HCL Technologies Q4 Results: How Is the IT Firm Expected to Perform This Quarter?

Synopsis: HCL Technologies is expected to report a steady Q4FY26 performance supported by strong deal wins and growth in AI and services. However, margins may remain under pressure due to wage hikes and costs. Brokerages see stable growth, with demand holding up despite weak discretionary spending.

HCL Technologies will announce its Q4FY26 and full-year FY26 results for the period ended March 31, 2026, on April 21, 2026, after market hours. Following the announcement, the management will host a conference call at 7:30 PM IST to discuss performance and outlook. Here are the estimates from various brokerage reports an investor should consider before the results come in. 

What Are The Expectations?

According to Motilal Oswal, HCL Technologies continues to remain one of the fastest-growing large-cap IT companies, supported by its diversified and resilient portfolio. The brokerage highlighted that services growth stood at around 5 percent year-on-year in constant currency in Q3, and the company has upgraded its FY26 services guidance to 4.75-5.25 percent. This implies a steady growth of around 1.7 percent quarter-on-quarter in Q4 despite seasonal weakness.

The brokerage noted that client conversations around AI have shifted towards enterprise-wide adoption, although implementation remains gradual due to constraints around data, cloud, and internal processes. In the near term, revenue opportunities are expected to be driven more by foundational work rather than full-scale AI deployment. 

While discretionary spending remains subdued, investments continue in AI infrastructure, engineering, and transformation programs, where the company is seeing strong traction. Deal momentum also remains healthy, with net new bookings of around USD 3 billion in Q3, growing 17 percent quarter-on-quarter and 43.5 percent year-on-year, with annual contract value at a four-year high and supports near-term revenue visibility. However, margins in Q4 are expected to remain under pressure due to wage hikes, seasonal weakness in the products business, and continued restructuring and SG&A investments.

According to Prabhudas Lilladher, advanced AI revenue grew 19.9 percent quarter-on-quarter in constant currency, largely driven by short-duration deals, indicating strong deal velocity. The total deal value stood at USD 3 billion, including a USD 473 million deal with a five-year tenure. The brokerage expects service-led growth momentum to continue into FY27 and FY28, supported by strong order wins and a growing AI revenue stream. However, margins are expected to normalize in Q4, with the impact of the new labour code likely to keep profitability in check.

Deven Choksey Research highlighted that Q3FY26 revenue grew 6 percent quarter-on-quarter and 13.3 percent year-on-year, driven by steady demand across core services and strong execution in large transformation programs. Deal momentum remained strong with total contract value of new deal wins, rising 43.5 percent year-on-year and 17 percent quarter-on-quarter. The company added 78 new clients year-on-year, taking the total to 1,887, with strong additions across higher revenue bands. Attrition moderated to 12.4 percent, while investments in AI capabilities and restructuring are expected to continue into Q4.

ICICI Securities also noted that HCL Technologies has upgraded its FY26 consolidated revenue guidance, while services guidance has also been raised. This implies a growth range of -0.2 percent to 1.7 percent quarter-on-quarter for services business in Q4. Deal wins remained strong, providing visibility for FY27 growth. Demand continues to remain healthy in areas such as AI infrastructure, AI engineering, and enterprise transformation. However, the software products segment is expected to remain weak, and margins may see pressure due to wage hikes, furloughs, and restructuring costs, partly offset by better utilisation and currency benefits. 

What Are The Estimates?

In terms of estimates, Motilal Oswal expects revenue of around Rs. 34,000 crore in Q4FY26, implying a growth of about 12.6 percent year-on-year and a marginal increase of around 0.3 percent sequentially. EBITDA is estimated at Rs. 7,000 crore with a margin of 20.58 percent. Profit after tax is expected at Rs. 4,700 crore, reflecting a growth of about 9.3 percent year-on-year and 14.6 percent quarter-on-quarter, with a PAT margin of 13.82 percent.

Prabhudas Lilladher estimates revenue at Rs. 33,600 crore, indicating a growth of about 11.3 percent year-on-year and a decline of around 0.9 percent sequentially. EBITDA is expected at Rs. 7,600 crore with a margin of 22.61 percent. Profit after tax is projected at Rs. 6,000 crore, reflecting a growth of about 39.5 percent year-on-year and 46.3 percent quarter-on-quarter, with a PAT margin of 17.85 percent.

Deven Choksey Research estimates revenue at Rs. 30,782.5 crore, implying a growth of about 1.9 percent year-on-year and a decline of around 9.2 percent sequentially. EBITDA is expected at Rs. 7,235.4 crore with a margin of 23.50 percent. Profit after tax is projected at Rs. 5,584.3 crore, reflecting a growth of about 29.9 percent year-on-year and 36.2 percent quarter-on-quarter, with a PAT margin of 18.14 percent.

ICICI Securities estimates revenue at Rs. 33,596.9 crore, indicating a growth of about 11.2 percent year-on-year and a decline of around 0.9 percent sequentially. EBITDA is expected at Rs. 7,518.4 crore with a margin of 22.37 percent. Profit after tax is projected at Rs. 4,654.3 crore, reflecting a growth of about 8.2 percent year-on-year and 13.5 percent quarter-on-quarter, with a PAT margin of 13.85 percent.

Overall, the outlook for the quarter remains steady, supported by strong deal wins, continued traction in AI and engineering services, and stable execution across core segments, although margin pressures and limited visibility on discretionary spending remain key monitorables.

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