HCLTech starts the year strong, but margins a worry

Tale of two companies HCLTech and TCS present two contrasting pictures in each of the parameters

- Jas Bardia

CL Technologies Ltd reported better-than-expected revenue in the June quarter and now sees full-year growth at 3-5% against 2-5% earlier, but the management lowering its full-year profitability by 100 basis points was a sore spot.

On Monday, the country's third-largest information technology (IT) services company reported $3.55 billion revenue for the June quarter, up 1.34% sequentially. The performance exceeded expectations of 37 analysts polled by Bloomberg, who expected HCLTech to report $3.53 billion in revenue. This was its best first quarter in six years.

HCLTech performed better than larger peer Tata Consultancy Services (TCS) in a lumpy first quarter because of its Europe business and expects a stable FY26 despite lingering macroeconomic uncertainty.

TCS ended the first quarter with $7.42 billion in revenue, down 0.59% sequentially.

The company's management sounded confident.