HCL Tech Q1 Results Preview: Will HCL Beat TCS In Q1FY27? To Announce 2nd Interim Dividend After 2400% Reward

After TCS, the limelight has shifted towards HCL Technologies' Q1 results for FY27, which is scheduled on July 13, 2026. HCL will most likely declare its earnings after market hours. In Q1FY27, HCL is expected to report sequential decline in constant currency revenue, while on the contrary, the EBIT margins are expected to expand owing to INR depreciations. Majority of experts believe that HCL Tech will retain its revenue and operating margins guidance for FY27. Apart from Q1, HCL is also likely to declare second interim dividend for FY27. This will be after HCL's first interim dividend reward to the tune of whopping 2400%.

HCL Technologies Q1 Results Preview:

"We forecast c/c revenue decline of 0.6% and yoy growth of 2.9%. We expect sequential revenue decline of 1.1% in the services business, while the products business will likely report moderate growth of 1% qoq. The decline in the services business is seasonal and is also impacted by ramp-downs in a couple of accounts," said analysts at Kotak Institutional Equities in a note.

Analysts at Equirus Securities and Choice Institutional Equities expect a 0.6% QoQ drop in constant currency revenue. Choice's note said that this will reflect client-specific weakness in Telecom and Manufacturing and seasonal softness in Software. However, resilient BFSI and Hi-tech performance should partly offset these headwinds.

On the other hand, all three experts believe EBIT margins of HCL will expand. Equirus predicts 13 basis points surge in margins on QoQ basis due to forex benefits and the absence of certain restructuring costs related to the Europe segment (worth 65bps in 4QFY26) to be partly compensated by investments and other restructuring costs.

But Kotak believes EBIT margins could expand by 30 basis points QoQ and 65 basis points YoY. They expect moderate restructuring charges, though lower than 122 bps of 4QFY26.

However, Choice believes margin is expected to remain broadly flat at 16.7%, with operational efficiency and favorable FX movements largely offsetting the impact of continued strategic investments.

Additionally, HCL's TCV deals are expected to healthy in the range of $2.2 billion to $2.5 billion.

HCL Technologies Q1 Results Preview: FY27 Guidance

For the FY27 guidance, Kotak's analysts in the note, said, " We expect healthy TCV of deal wins in the $2.2-2.5 bn range. We expect HCLT to retain its overall revenue growth guidance of 1-4% and 1.5-4.5% in the IT services business. The hurdle rate to achieve the lower end and upper end of guidance stands at 0.7-2.7% from 2Q-4QFY27E. We expect HCLT to retain the 17.5-18.5% EBIT margin guidance band."

"We expect HCLT to reiterate its CC Consol US$ Sales and US$ Services Sales growth guidance of 1-4% and 1.5-4.5% respectively for FY27E. We also expect it to reiterate its Consolidated EBITM guidance of 17.5-18.5% for FY27E. We expect healthy TCV win," analysts at Equirus added.

For the full year 2025-26, HCL posted net profit of Rs 17,361 crore, down by 0.2% YoY. While revenue stood at Rs 130,144 crore, registering a growth of 11.2%.

In the previous quarter, the Shiv Nadar-backed company announced revenue growth guidance in the range of 1% to 4% in constant currency for FY27, while services revenue growth is expected between 1.5% to 4.5%. Also, EBIT margins are estimated between 17.5% to 18.5%.

HCL Technologies Q1 Results: What Should Investors Focus On?

According to the three experts, investors should focus on the following:

- Revenue mix and growth from AI-amplified and AI-native services;

- Magnitude of deflation from AI-disrupted services;

- Pricing pressure in the core business and its consequent impact on margins;

- Factors that can lead to an acceleration in growth; (

- Profitability and execution discipline in cost take-out and vendor consolidation deals;

- Ability to generate net-new AI-led revenue pools to offset deflation, especially given the higher exposure to relatively lower AI-hit infrastructure services;

- Demand outlook for ER&D services, P&P, business application, IMS and digital services in 2QFY27E/FY27E & beyond;

- Impact from ongoing macro issues on HCLT growth/margin outlook or on its clients, if any;

- Any update on the acquisition strategy in the medium term, capital allocation policy and deal pipeline/wins;

- Demand commentary and margin outlook;

- AI-led deflation impact and FY27 growth guidance revisions;

- Potential drivers of growth acceleration;

- Execution in cost take-out and vendor consolidation deals;

- AI-led deal pipeline and revenue conversion.

HCL Technologies Second Interim Dividend

The company has said that its board of directors will consider the proposal of second interim dividend for FY27 on July 13, 2026. Earlier, HCL Tech declared first interim dividend of Rs 24 per share(2400%) for FY27, whose record date was April 5, 2026 and payment date was May 5, 2026.

The tech giant has a solid history of delivering hefty dividends to its investors. In the fiscal FY26, the company delivered as much as Rs 60 dividend per share.410

In FY26, the company paid five interim dividends in 2025-26 financial year. The first interim dividend of Rs 6 per share was in January 2025, followed by Rs 18 dividend per share in April 2025. Later on, the company paid three more dividends of Rs 12 each in July 2025, October 2025 and January 2026.

Since May 2003, HCL Tech has paid up to 95 dividends, as per Trendlyne data. Its current dividend yield is at 5.18%, which is strong.

HCL Technologies Share Price Recommendation:

Ahead of Q1 results day, HCL Technologies stock closed higher by 1.14% to Rs 1162.65 apiece on BSE last week on Friday. The market cap stood at Rs 3,15,504.27 crore. The stock's weekly gains were over 2%. This is because of TCS Q1FY27 earnings which was in-line with estimates and that made investors hopeful for other tech players.

The tech sector globally struggles with volatile macro conditions, geopolitical issues, elevated AI-led productivity pass-throughs and continued pressure on discretionary spending. In Q1FY27, rupee depreciation, though, could provide some relief.

Should You Buy HCL Technologies Share?

Equirus and Kotak have assigned 'REDUCE' rating with a target price of Rs 1,415 and Rs 1,120. On the other hand, Choice broker has assigned 'BUY' rating with target price of Rs 1,410.