HCLTech posts ₹4,235 Cr Q2 profit, to merge variable pay into fixed salaries

HCL Technologies Ltd (HCLTech) reported a consolidated net profit of ₹4,235 crore for the quarter ended September 30, 2025, marking a 10.2% sequential growth over the June quarter’s ₹3,843 crore, though flat on a year-on-year basis. The IT services major posted a 10.6% rise in revenue to ₹31,942 crore from ₹28,862 crore a year earlier, according to its latest exchange filing.

The company’s operating margin improved to 17.5%, expanding by 116 basis points sequentially, supported by efficiency initiatives and a strong recovery plan. Chief Executive Officer and Managing Director C. Vijayakumar stated that while the automotive segment remained under pressure, most other verticals showed solid performance. “Our advanced AI revenue this quarter exceeded the USD 100 million mark, representing about 3% of our total revenue,” he said.

HCLTech secured total bookings worth USD 2.6 billion (₹22,500 crore) during the quarter, its highest ever without any single mega deal. The total contract value of deal wins rose 15.8% year-on-year, with balanced contributions from all geographies and service lines.

The United States continued to be HCLTech’s largest market, contributing 56.2% of total revenue, growing 2.4% sequentially. Europe and India saw stronger momentum, registering 7.6% and 0.6% growth, respectively. HCL Software’s performance remained mixed, with revenue down 3.7% YoY, but subscription, support, and professional services rising 8% YoY on a constant currency basis. Annual recurring revenue from HCLSoftware increased slightly to USD 1.06 billion (₹9,300 crore).

Vijayakumar emphasized the company’s intent to develop proprietary intellectual property in AI, a key area of future growth. He also commented on the recent H1B visa fee revisions in the U.S., noting that HCLTech has been proactively reducing visa dependency by strengthening its global delivery model. “We intend to increase local hiring and training to enhance localization,” he said.

In a significant move impacting its workforce of 2,26,440 employees, HCLTech announced the merger of all variable pay into fixed salaries, effective from October 2025. Chief People Officer Ram Sundararajan confirmed that annual salary increments will also take effect from October. “The decision to shift variable pay to fixed pay aims to simplify compensation and provide income stability to employees,” he said.

The company reported 3,489 net employee additions during the quarter, including 5,196 freshers, signaling robust hiring momentum. Sundararajan added that HCLTech is on track to exceed its fresher hiring targets for the year, having already achieved 92% of last year’s total intake in the first half of FY26. Attrition levels improved marginally, declining to 12.6% from 12.9% in the same quarter last year, reflecting improved employee retention efforts.

FY26 Outlook : HCLTech maintained its revenue growth guidance of 3–5% for FY26 on a constant currency basis, while raising its services revenue growth projection to 4–5% from the earlier 3–5% range. The company said it expects continued margin improvement through operational efficiency, cost optimization, and AI-driven automation across delivery functions.