Key Points:
- HCLTech Q3 earnings are under investor watch for FY26 guidance signals amid a seasonally weak quarter and cautious enterprise spending.
- Analysts expect ~2% sequential growth, led by BFSI, while discretionary demand remains muted.
- Deal momentum and progress in AI monetization will be key drivers of management commentary and stock reaction.
HCL Technologies reports December-quarter earnings on Monday, with HCLTech Q3 earnings in focus as investors watch whether the IT major tweaks its FY26 revenue guidance amid a seasonally weak quarter, muted demand, and cautious enterprise spending.
HCL Technologies Ltd., India’s third-largest IT services exporter, is set to release its third-quarter FY26 results later Monday, putting its shares firmly in focus alongside peer Tata Consultancy Services.
Analysts say the December quarter is typically soft for the sector because of furloughs and holidays, limiting the scope for upside surprises despite stable deal activity. Most expect modest sequential growth and guarded commentary on near-term demand.
Seasonally Weak Quarter Limits Growth Upside
The December quarter is widely seen as the weakest of the year for Indian IT firms, as client furloughs in the U.S. and Europe slow project execution and revenue recognition, impacting HCLTech Q3 earnings.
“Q3 tends to be impacted by holidays and furloughs, and this year is no different,” said an analyst tracking large-cap IT services companies, who asked not to be named because they are not authorized to speak publicly. “Demand outside essential services remains selective.”
Banking, financial services and insurance, or BFSI, continues to be the relative bright spot, analysts said, even as discretionary spending in other verticals remains constrained by macroeconomic uncertainty.
BFSI typically absorbs furlough impacts better than other segments, giving it an outsized influence on quarterly topline performance. Still, analysts said the overall environment remains challenging, with clients prioritizing cost optimization over large transformation programs.
Analysts Expect Modest Sequential Growth
HCLTech is expected to post about 2% quarter-on-quarter growth in constant currency terms in HCLTech Q3 earnings, driven by a seasonally stronger performance in its Products and Platforms business, according to market estimates.
Some recovery is also anticipated in retail, consumer packaged goods and healthcare, though analysts cautioned that the rebound is uneven and fragile.
Key issues investors will track alongside HCLTech Q3 earnings include deal momentum, the size and quality of the deal pipeline, employee attrition and hiring trends, and the company’s progress in monetizing artificial intelligence projects.
“The focus will be less on the reported numbers and more on management commentary around FY26 guidance and demand trends across geographies,” another analyst said.
In the September quarter, HCLTech revised its services revenue growth guidance in constant currency to 4% to 5% for FY26, while retaining its overall revenue and margin outlook.
Deals, AI Strategy Shape Outlook
In December 2025, HCLTech announced it would acquire the Telco Solutions business of Hewlett Packard Enterprise for up to $160 million in an all-cash deal, including $15 million in incentives linked to FY25 performance.
The acquisition is aimed at strengthening HCLTech’s engineering, AI-led and cloud-native offerings for global telecom clients, the company said in a regulatory filing.
During the same month, HCLTech expanded its digital transformation partnership with Aurobay Technologies to support operations in Sweden and China, covering SAP, Siemens Teamcenter PLM and integration services.
HCLTech also joined the Microsoft Discovery platform, an agentic AI initiative designed to accelerate research in areas such as drug discovery, materials science and semiconductor design.
“Our artificial intelligence strategy is built on vertical lines and intellectual property spread across services and software,” said C. Vijayakumar, HCLTech’s managing director and chief executive officer. “We are moving from AI pilots to AI monetization.”
In the second quarter, HCLTech reported flat net income of ₹4,235 crore from a year earlier, while revenue rose 10.7% to ₹31,492 crore, supported by financial services and technology verticals.
For now, investors are weighing whether steady execution and selective deal wins reflected in HCLTech Q3 earnings will be enough for the company to maintain or adjust its FY26 guidance in a slowing global IT spending environment.
