HCLTech's Momentum in FY26: Sustainable Revenue Growth and Booking Strength Signal Long-Term Value

HCLTech's performance in fiscal year 2026 (FY26) has underscored its resilience and strategic agility, positioning the IT services giant as a compelling long-term investment. With a 13.3% year-on-year (YoY) revenue increase to ₹33,872 crore in Q3 FY26 and a 43.5% YoY surge in new deal bookings to $3,006 million, the company has demonstrated a rare combination of top-line growth and operational discipline. These metrics, coupled with strategic bets on AI and robotics, suggest that HCLTech's momentum is not a short-term spike but a foundation for sustained value creation.

Revenue Growth: A Mix of Resilience and Strategic Focus

HCLTech's Q3 FY26 results revealed a 13.3% YoY revenue increase, driven by strong demand in banking and technology verticals according to Q3 results. While net profit dipped 11% YoY to ₹4,076 crore due to margin pressures and restructuring costs, the company's EBIT grew 8% to ₹6,285 crore, maintaining a healthy 18.6% margin. This resilience is partly attributable to disciplined cost management and a focus on high-margin digital services. For instance, Digital CC revenue grew 17.7% YoY, contributing 43.2% of total services revenue.

The company's full-year guidance-4-4.5% constant currency revenue growth and EBIT margins of 17-18%-reflects confidence in its ability to navigate macroeconomic headwinds. This stability is critical for investors, as consistent revenue growth and margin preservation are hallmarks of sustainable business models.

Booking Strength: A Barometer of Future Growth

HCLTech's booking strength in FY26 has been exceptional, with Q3 FY26 new deal wins reaching $3 billion, a 43.5% YoY increase. This momentum has been consistent across quarters: Q2 FY26 saw $2.5 billion in total contract value (TCV), and Q4 FY26 projections indicate further growth, albeit with potential challenges in retail and manufacturing sectors.

The quality of these bookings is equally impressive. Advanced AI services revenue hit $148 million in Q3 FY26, up 19.9% quarter-on-quarter (QoQ), while AI now accounts for 42% of services revenue. This shift toward high-growth, high-margin AI solutions signals a strategic pivot that aligns with global digital transformation trends. For example, HCLTech's AI Force and Agentic AI platforms are being deployed to modernize digital banking and optimize telecom infrastructure, generating measurable efficiency gains for clients.

Strategic Investments: Fueling Long-Term Value

HCLTech's focus on AI and robotics is not merely aspirational-it is a monetization-driven strategy. The company has invested heavily in AI intellectual property (IP), trained over 100,000 users in AI and GenAI technologies, and joined Microsoft's Discovery platform to accelerate innovation in chemistry and semiconductor design. These initiatives are transitioning from pilots to scalable solutions, with AI-led transformation deals projected to deliver 20-50% efficiency improvements for clients.

Moreover, HCLTech's attrition rate has improved to 12.4% in Q3 FY26, down from 13.2% YoY, while its workforce expanded by 2,852 employees. This talent retention and growth strategy ensures the company can meet rising demand for AI and robotics expertise, further solidifying its competitive edge.

Future Outlook: Balancing Caution and Optimism

While HCLTech's Q4 FY26 revenue growth is projected at 2-5% YoY-a narrower range than earlier quarters-this reflects a measured approach to managing macroeconomic uncertainties. The company's ER&D business, however, is expected to see a 75% YoY booking surge, highlighting its ability to capitalize on niche, high-growth areas.

For investors, the key takeaway is that HCLTech's FY26 performance is underpinned by sustainable drivers: consistent booking momentum, strategic alignment with AI and robotics, and operational efficiency. These factors position the company to outperform in a sector where commoditization and margin compression are persistent risks.

Conclusion

HCLTech's FY26 momentum is not a flash in the pan but a reflection of its ability to adapt to evolving market demands while prioritizing innovation and profitability. With AI and robotics poised to become core revenue engines, and booking strength translating into a robust pipeline, the company is well-positioned to deliver long-term value. For investors seeking resilience and growth in the IT sector, HCLTech's strategic execution and financial discipline make it a standout candidate.