HCL Technologies Q4 Results Preview: Net profit may fall 6% QoQ with muted revenue growth, margins to be under pressure

HCL Technologies, India’s third-largest IT services company, is set to announce its Q4 results on Tuesday, April 22. Following the earnings announcements by industry peers Tata Consultancy Services (TCS), Infosys, and Wipro, HCL Technologies will be the next major IT player to report its financial performance for the fourth quarter of FY25.

Ahead of the Q4 results, HCL Technologies share price gained over 4% on Monday. HCL Tech shares jumped as much as 4.23% to an intraday high of ₹1,498.90 apiece on the BSE.

HCL Technologies Q4 Results Expectations

Analysts expect HCL Technologies to report a subdued performance in Q4, weighed down by seasonal weakness, wage hikes, and a decline in the high-margin Products & Platforms (P&P) segment. While Engineering & R&D (ER&D) and manufacturing are likely to remain soft, the BFSI vertical is expected to stay stable, and the Hi-Tech segment may show early signs of a recovery.

HCL Technologies Q4 Revenue

HCL Technologies is projected to report a 1.6% sequential increase in revenue to ₹30,356 crore in Q4FY25, up from ₹29,890 crore in Q3FY25. However, in dollar terms, revenue is expected to decline 0.8% QoQ to $3,505 million, from $3,533 million, according to Kotak Institutional Equities.

The brokerage estimates a 0.7% decline in constant currency (CC) revenue, citing seasonal weakness in the products business, planned scale-downs of mega-deals, and tapering of telecom contracts. Services revenue is expected to grow 0.9% QoQ (0.1% on an organic basis), with approximately 90 basis points of revenue contribution from the CTG acquisition.

Nuvama Institutional Equities forecasts a 0.7% QoQ decline in CC revenue and a 1.3% drop in USD terms. It expects Services revenue to rise 0.5% QoQ, offset by a sharp 15% QoQ decline in the P&P segment, despite two months of contribution from recent acquisitions.

HCL Technologies Q4 Net Profit

Net profit of HCL Technologies in the quarter ended March 2025 is estimated to fall 6.6% to ₹4,288 crore from ₹4,591 crore in the December 2024 quarter, as per Nuvama Equities.

HCL Technologies Q4 EBIT, Margin

The company’s operating performance is likely to face pressure from lower license revenues in the products business, transitional costs from the Verizon deal, and seasonal weakness in P&P.

EBIT is expected to fall 7.7% QoQ to ₹5,370 crore, with EBIT margin contracting 170 basis points to 17.8%, according to Nuvama.

Kotak Institutional Equities projects EBIT at ₹5,516 crore, down 5.5% QoQ, with a margin compression of 136 bps to 18.2%.

HCL Technologies FY26 Guidance

HCL Technologies is expected to guide for revenue growth of 3% – 5% for FY26, including a 100 bps contribution from the CTG acquisition. This implies a compounded quarterly growth rate (CQGR) of 0.5% – 1.3% for the fiscal year. The EBIT margin guidance is likely to remain unchanged in the range of 18–19%, according to Kotak Equities.

Motilal Oswal Financial Services also expects HCL Tech to provide initial FY26 revenue growth guidance in the range of 3% – 5%, with stable operating margins.

HCL Technologies Q4 Results: What to watch out for?

Investors should focus on HCL Tech’s management commentary around deal TCV and demand trends in key verticals such as BFSI, Hi-Tech, and ER&D. Key monitorables include signs of a slowdown in client decision-making, macroeconomic headwinds impacting deal flow, and the modest pace of new deal wins in recent quarters.

Attention will also be on any revenue impact from the Verizon deal anniversary and the outlook for the June quarter, which is seasonally weak. Additionally, the strength of discretionary spending and the operational levers needed to achieve the aspirational EBIT margin band of 19% – 20% will remain critical.

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