HCL Infosystems Limited (HCL-INSYS)
₹9.19 -4.96% last close, 23 Oct
Latest quarterly results (Q4 FY26)
In its latest reported quarter, Q4 FY26, HCL Infosystems' revenue was ₹5.0 Cr (+7.5% year on year, +18.5% on the previous quarter), and net profit ₹-13.0 Cr (a bigger loss than a year earlier); the operating margin was -340.0%.
| Q4 FY26 (₹ Cr) | Value | YoY vs Q4 FY25 | QoQ |
|---|---|---|---|
| Revenue | ₹5.0 | +7.5% | +18.5% |
| Operating profit | ₹-17.0 | loss widened | loss widened |
| Net profit | ₹-13.0 | loss widened | loss widened |
| EPS (₹) | -0.40 | loss widened | loss widened |
| Operating margin | -340.0% | — | — |
HCL-INSYS delivery percentage
NSE end-of-day data for
On Fri, 23 Oct 2026, 73.89% of the HCL-INSYS shares traded on NSE were taken to delivery, against the stock's own 20-session average of 65.38%. That is higher than usual for this stock. Turnover was only ₹30 lakh, so a handful of trades can move this figure.
Delivery in the last 5 sessions: 59.2% · 63.7% · 64.8% · 60.5% · 73.9%
A description of what the exchange published, not a recommendation. Names such as "accumulation" or "long buildup" label a pattern in the numbers. How delivery is analysed
📢 Recent Corporate Announcements
HCL Infosystems' subsidiary, HCL Infotech Limited, received a court ruling from the Principal District Judge, Muzaffarpur, allowing an objection petition by Uttar Bihar Gramin Bank (UBGB). The petition challenged an earlier arbitral award dated October 29, 2019, which had awarded HCL Infotech ~₹13.41 crore plus 18% annual interest and ₹20 lakh in costs. The judge found the tribunal erred regarding the contract termination validity and the 18% interest rate, though claims independent of the termination remain unaffected. The contested ₹13.41 crore claim is significant, representing ~63% of HCL Infosystems' TTM revenue of ₹21.32 crore.
- District Court allowed UBGB's Section 34 objection petition against arbitral award dated 29.10.2019
- Arbitral award had previously allowed claims of approx. ₹13.41 Crore plus 18% interest p.a. and ₹20 lakh costs to HCL Infotech
- Court held tribunal mechanically applied 18% interest and failed to establish invalidity of contract termination dated 11.12.2012
- Original claim of ₹13.41 Cr equals ~63% of FY26 TTM revenue (₹21.32 Cr)
- HCL Infotech plans to challenge the ambiguous judgment before the High Court at Patna
HCL Infosystems has received an Order-in-Appeal from the Additional Commissioner, CGST (Appeals), Noida, imposing a penalty of ₹80.22 Lakhs under Section 74(1) of the CGST Act, 2017. The order stems from a department appeal challenging an earlier Order-in-Original from February 2025, which confirmed a tax demand of ₹80.22 Lakhs on disallowed CENVAT Credit but had dropped penalties. The penalty represents ~3.8% of the company's TTM revenue of ₹21.32 Cr. The company is evaluating legal remedies to challenge the order.
- Additional Commissioner, CGST (Appeals), Noida imposed a penalty of ₹80.22 Lakhs under Section 74(1) of the CGST Act, 2017
- Department appeal partially allowed, modifying the Order-in-Original dated February 01, 2025
- Prior order had confirmed a tax demand of ₹80.22 Lakhs regarding pre-GST CENVAT credit disallowance while dropping interest and penalty
- Order-in-Appeal dated September 15, 2026 was received by the company on September 24, 2026
- Company is currently evaluating available legal remedies to challenge the ruling
HCL Infosystems held its 40th Annual General Meeting on September 16, 2026, attended by 138 members via video conferencing. Resolutions presented included ordinary business such as financial statement adoption and director reappointment, as well as material related-party transactions with promoter entities HCL Capital Pvt Ltd and HCL Corporation Pvt Ltd. The company operates in a downsizing phase with negative net worth of ₹-299 Cr and FY26 losses of ₹32.75 Cr on revenue of ₹21.32 Cr. Formal voting results under Regulation 44(3) will follow separately.
- 40th AGM held on September 16, 2026, from 10:30 AM to 11:40 AM IST
- Total of 138 members attended the meeting through VC/OAVM
- Shareholders voted on 5 resolutions including material related-party transactions with promoter entities HCL Capital and HCL Corporation
- Remote e-voting was conducted from September 13 to September 15, 2026
HCL Infosystems Limited conducted its 40th Annual General Meeting (AGM) on September 16, 2026, via video conferencing with 138 members attending. Key agenda items put to vote included the adoption of audited financial statements for FY26 and approval for material related-party transactions with promoter entities HCL Capital Private Limited and HCL Corporation Private Limited. Remote e-voting was held from September 13 to September 15, 2026, alongside voting during the meeting. The statutory and secretarial audit reports contained no qualifications or adverse observations.
- 40th AGM held on September 16, 2026, with 138 members attending via VC/OAVM
- Approval sought for material related-party transactions with promoter entities HCL Capital and HCL Corporation
- Remote e-voting window was open from September 13, 2026 (9:00 AM) to September 15, 2026 (5:00 PM)
- Remuneration approval tabled for Mr. Gaurav Bhalla, Manager of the company
HCL Infosystems has announced the schedule for its 40th Annual General Meeting (AGM), set to take place via video conferencing on September 16, 2026. The company is dispatching web-links for the FY25-26 Annual Report and AGM Notice to shareholders whose email IDs are not registered. The cut-off date to establish voting eligibility is September 9, 2026, with remote e-voting taking place between September 13 and September 15, 2026. The company remains in a downscaled state with FY26 revenues of Rs 21.32 Cr and a net loss of Rs 32.75 Cr.
- 40th AGM scheduled for Wednesday, September 16, 2026, at 10:30 A.M. IST via VC/OAVM
- Cut-off date for e-voting and participating in the AGM set for Wednesday, September 09, 2026
- Remote e-voting begins Sunday, September 13, 2026 (9:00 A.M.) and concludes Tuesday, September 15, 2026 (5:00 P.M.)
- FY25-26 Annual Report and Notice web-links dispatched to unregistered email shareholders per SEBI Reg 36(1)(b)
HCL Infosystems Limited has released the notice for its 40th Annual General Meeting (AGM) scheduled for September 16, 2026. Key agenda items include seeking shareholder approval for material related-party transactions to avail financial support of up to ₹1,500 crore from HCL Capital Private Limited and up to ₹500 crore from HCL Corporation Private Limited. These enabling limits provide liquidity backing as the company navigates a negative net worth of ₹-299 crore and ongoing operating losses. Shareholders will also vote on managerial remuneration for Manager Gaurav Bhalla for FY27.
- 40th AGM scheduled for September 16, 2026, via video conferencing with e-voting cut-off on September 9, 2026
- Shareholder approval sought for promoter financial support up to ₹1,500 crore from HCL Capital Private Limited
- Shareholder approval sought for promoter financial support up to ₹500 crore from HCL Corporation Private Limited
- Special resolution proposed for payment of minimum remuneration to Manager Mr. Gaurav Bhalla from July 1, 2026 to June 30, 2027
HCL Infosystems has received a favorable order from CESTAT, Allahabad, setting aside a 2018 tax demand of ₹16.67 Crores plus interest and penalties. The dispute concerned the applicability of service tax under reverse charge on royalties paid outside India. This relief is highly material given the company's TTM revenue of only ₹21 Cr and its current negative net worth of ₹299 Cr. While the Department may appeal to a higher forum, this order significantly reduces immediate contingent liability risks.
- CESTAT set aside a tax demand of ₹16.67 Crores along with applicable interest and equivalent penalty.
- The order overturns a previous demand from the Commissioner of CGST, Noida, dated October 31, 2018.
- The relief amount of ₹16.67 Cr represents approximately 79% of the company's TTM revenue of ₹21 Cr.
- The litigation involved service tax applicability on royalty payments made outside India under the reverse charge mechanism.
HCL Infosystems has received a favorable order from CESTAT, Allahabad, which set aside a service tax demand of ₹22.85 Crores plus interest and penalties. This demand, originally issued in July 2017, was related to the taxability of multiple services. The relief is highly significant as the amount exceeds the company's total TTM revenue of ₹21 Crores. While the Department may still appeal to a higher forum, this ruling provides substantial relief to the company's stressed balance sheet.
- CESTAT set aside a tax demand of ₹22.85 Crores along with interest and equivalent penalty.
- The relief amount represents approximately 108.8% of the company's TTM revenue of ₹21 Crores.
- The order reverses a 2017 decision (Order-in-Original No. 04/Commissioner/ST/Noida/2017-18) by the CGST Commissionerate.
- The dispute involved the taxability of multiple services under Section 73 of the Finance Act, 1994.
- The company currently operates with a negative net worth of ₹299 Crores, making this legal win critical for liquidity.
HCL Infosystems reported a weak Q1 FY27 with revenue falling to ₹4.18 Cr from ₹5.28 Cr in the previous quarter, primarily due to the absence of one-time defense project gains. The Loss Before Tax widened to ₹16.68 Cr, significantly impacted by legal and professional expenses of ₹6.02 Cr, which represent 144% of the quarter's revenue. A major liquidity boost came from a ₹26.60 Cr tax refund and the quashing of a ₹14.90 Cr tax demand by the Supreme Court. The company continues its strategy of scaling down operations while focusing on recovering long-overdue receivables through arbitration.
- Revenue for Q1 FY27 stood at ₹417.55 Lakhs, a decline from ₹528.20 Lakhs in the previous quarter.
- Loss Before Tax widened to ₹1668.08 Lakhs compared to a loss of ₹1316.72 Lakhs in Q4 FY26.
- Legal, professional, and consultancy expenses reached ₹601.70 Lakhs, exceeding total quarterly revenue.
- Received a significant tax refund of ₹2,660 Lakhs from Rajasthan VAT authorities related to historical battery sales.
- Supreme Court quashed a long-standing income tax demand of ₹1,490 Lakhs dating back to FY 1997-98.
HCL Infosystems reported a standalone net loss of Rs 16.70 Cr for Q1 FY27, a sharp increase from the Rs 4.28 Cr loss in Q1 FY26. Revenue from operations has effectively dropped to zero as the company continues its strategy of scaling down and exiting legacy businesses. The auditor has issued a 'going concern' warning, highlighting that current liabilities exceed current assets by Rs 449.74 Cr. A significant arbitration award of Rs 102.81 Cr from UIDAI remains unrecognized in the financials as it is currently being challenged in the Delhi High Court.
- Standalone net loss widened to Rs 16.70 Cr in Q1 FY27 compared to Rs 4.28 Cr in the same period last year.
- Current liabilities exceed current assets by Rs 449.74 Cr as of June 30, 2026, indicating severe liquidity pressure.
- Finance costs increased to Rs 6.55 Cr, largely driven by interest on Rs 355 Cr of promoter-issued NCDs.
- Exceptional loss of Rs 8.01 Cr was recorded due to provisions for losses in its subsidiary, HCL Infotech Limited.
- A favorable arbitration award of Rs 102.81 Cr against UIDAI is pending finality due to ongoing litigation in the Delhi High Court.
The Supreme Court has dismissed a Special Leave Petition (SLP) filed by the Income Tax Department against HCL Infosystems, effectively cancelling a ₹14.90 crore tax demand. The dispute dates back to FY 1997-98 regarding the taxability of a ₹60.80 crore compensation received from Hewlett Packard (HP) following the termination of their joint venture. This ruling is highly material as the demand represents approximately 71% of the company's TTM revenue of ₹21 crore. For a company with a negative net worth of ₹299 crore, this resolution removes a significant contingent liability and potential cash outflow.
- Supreme Court dismissed the Income Tax Department's SLP on July 13, 2026, ending a nearly 30-year litigation.
- The ruling eliminates a tax demand of ₹14.90 crore originally raised by the Assessing Officer.
- The dispute involved a ₹60.80 crore compensation received in FY 1997-98 for the termination of a JV with HP.
- The dismissed demand of ₹14.90 crore is equivalent to ~71% of the company's TTM revenue of ₹21 crore.
- The company received the final order on July 15, 2026, confirming the receipt as a non-taxable capital receipt.
HCL Infosystems has filed its quarterly compliance certificate under Regulation 74(5) of SEBI (Depositories and Participants) Regulations, 2018. The filing confirms that for the quarter ended June 30, 2026, all physical share certificates received for dematerialization were processed correctly. The company's Registrar, Alankit Assignments Limited, verified that these securities are listed and that physical certificates were mutilated and cancelled. This is a standard procedural update with no impact on business fundamentals.
- Quarterly compliance completed for the period ending June 30, 2026
- Registrar Alankit Assignments Limited issued the confirmation on July 1, 2026
- Physical certificates were mutilated and cancelled following dematerialization
- Depository names have been updated as registered owners in the company records
The Principal Commissioner of Central Goods and Services Tax (CGST), Noida, has filed an appeal in the Allahabad High Court against a previous favorable order received by HCL Infosystems from CESTAT. The original dispute involves a massive demand of Rs 312.34 Crores plus interest and penalties related to CENVAT credit. This amount is highly material, representing nearly 15 times the company's TTM revenue of Rs 21 Crores. While the matter is currently at the admission stage with no interim orders, the reopening of this litigation adds significant risk to a company already reporting a negative net worth of Rs 299 Crores.
- CGST Department filed an appeal on July 06, 2026, challenging the CESTAT order dated October 17, 2025.
- The original demand involves Rs 312.34 Crores plus interest and an equivalent penalty under CENVAT Credit Rules.
- The disputed amount is approximately 1,487% of the company's TTM revenue of Rs 21 Crores.
- Company currently has a negative net worth of Rs 299 Crores and TTM PAT of Rs -33 Crores.
- No interim order has been passed by the High Court as the matter is at the admission stage.
HCL Infosystems Limited has informed the stock exchanges that its trading window for dealing in company securities will be closed starting July 1, 2026. This action is in compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015, for the quarter ending June 30, 2026. The window will remain closed for all designated and connected persons until 48 hours after the declaration of the unaudited financial results. This is a standard regulatory procedure followed by listed companies before the announcement of quarterly earnings.
- Trading window closure effective from July 1, 2026
- Closure pertains to the financial results for the quarter ending June 30, 2026
- Restriction applies to all Designated Persons and Connected Persons
- Window to reopen 48 hours after the announcement of unaudited financial results
HCL Infosystems reported a decline in FY26 revenue to ₹2,160.86 Lakhs from ₹2,461.27 Lakhs in FY25. The Loss Before Tax (after exceptional items) widened significantly to ₹3,291.45 Lakhs compared to a loss of ₹2,110.92 Lakhs in the previous year. The company continues to struggle with legacy issues, incurring ₹1,712.84 Lakhs in legal expenses, though it secured a favorable ₹10,281 Lakhs arbitration award which is currently under appeal. To sustain operations, the company issued ₹35,500 Lakhs in NCDs to its promoter group at a nominal 0.001% coupon rate.
- Annual revenue decreased by 12.2% YoY to ₹2,160.86 Lakhs in FY26.
- Loss Before Tax (after exceptional items) widened to ₹3,291.45 Lakhs from ₹2,110.92 Lakhs YoY.
- Incurred ₹1,712.84 Lakhs in legal and legacy-related expenses during the financial year.
- Issued ₹35,500 Lakhs of 0.001% NCDs to promoter group entity HCL Capital Private Limited to repay earlier loans.
- Favorable arbitration award of ₹10,281 Lakhs received in the UIDAI case, but the customer has filed an appeal.
Financial Performance
Revenue Growth by Segment
Consolidated revenue declined 23.7% YoY from INR 32.34 Cr in FY24 to INR 24.68 Cr in FY25. In earlier periods (Q3 FY20), Distribution revenue fell 29.2% QoQ to INR 386 Cr, with Enterprise Distribution dropping 16.5% to INR 259 Cr and Consumer Distribution plunging 46% to INR 127 Cr as the company began scaling down these loss-making operations.
Geographic Revenue Split
Not explicitly disclosed in available documents, though the company sold its Singapore subsidiary (HCL Insys Pte. Ltd.) for SGD 57.6 million (INR 303.4 Cr) in 2019 to exit international distribution markets.
Profitability Margins
Net Profit Margin significantly worsened from (49.34%) in FY24 to (85.77%) in FY25. This deterioration is primarily due to negative EBIT and the continued impact of legacy low-margin contracts and high legal expenses.
EBITDA Margin
The company reported a PBILDT loss of INR 51.24 Cr in FY25 compared to a loss of INR 55.33 Cr in FY24. For H1 FY26 (ending Sept 30, 2025), the PBILDT loss stood at INR 27.54 Cr, reflecting persistent operational inefficiencies in the remaining System Integration business.
Capital Expenditure
Not disclosed in available documents as the company is in a scale-down phase rather than an expansionary phase.
Credit Rating & Borrowing
CARE Ratings notes 'Adequate' liquidity for HCLI solely due to promoter support. HCLI has no outstanding term loans or fund-based working capital limits, but relies on a Corporate Guarantee of INR 396 Cr and interest-free unsecured loans of INR 355 Cr from HCL Corporation Private Limited (HCLC).
Operational Drivers
Raw Materials
IT Hardware (computers, mobile handsets) and software components for System Integration projects, representing the bulk of direct expenses which were INR 0.07 Cr for standalone operations in Q2 FY26.
Capacity Expansion
No expansion planned; the company is actively scaling down all segments except for existing System Integration (SI) projects and Annual Maintenance Contracts (AMC).
Raw Material Costs
Direct expenses for consolidated operations were INR 1.25 Cr in FY25, representing approximately 5% of total revenue, significantly reduced from previous years due to the cessation of the distribution business.
Manufacturing Efficiency
Not applicable as the company has transitioned to a service-only model (SI and AMC).
Logistics & Distribution
Distribution costs have been largely eliminated following the Board's decision to scale down the Consumer and Enterprise Distribution businesses starting in 2020.
Strategic Growth
Growth Strategy
The company is not pursuing growth but rather a 'limit losses' strategy. This involves scaling down the Enterprise and Consumer Distribution businesses, exiting low-margin contracts, and focusing exclusively on fulfilling existing System Integration projects and AMCs to stabilize the balance sheet.
Products & Services
IT support services, System Integration (SI) solutions, and Annual Maintenance Contracts (AMC).
Brand Portfolio
HCL (owned by the promoter group HCLC).
New Products/Services
No new product launches reported; the strategy is focused on 'no new orders being onboarded' in scaled-down segments.
Market Expansion
None; the company is exiting markets, including the sale of its Singapore operations.
Market Share & Ranking
Not disclosed; the company is currently a minor player following the shutdown of its major distribution segments.
Strategic Alliances
Sale of HCL Insys Pte. Ltd. to PCCW Solutions Limited (Hong Kong) for SGD 57.6 million.
External Factors
Industry Trends
The industry is shifting away from low-margin hardware distribution toward high-value services; HCLI failed to transition profitably and is now scaling down to manage its negative net worth of INR 291 Cr.
Competitive Landscape
Faces intense competition in the System Integration and AMC space from larger, more profitable IT service providers.
Competitive Moat
The primary moat is the 'HCL' brand and the strong financial backing of the HCL Group (HCLC), which holds a significant stake in HCL Technologies (market cap ~INR 4.30 lakh Cr). This provides a 'going concern' cushion despite HCLI's weak standalone financials.
Macro Economic Sensitivity
Highly sensitive to market demand for IT services and the competitive business environment, which were cited as reasons for the 26.3% revenue decline in 2020.
Consumer Behavior
Shift in consumer demand and tough market conditions led to the decision to exit the Consumer Distribution business.
Geopolitical Risks
The sale of the Singapore subsidiary suggests a retreat to domestic operations to mitigate international market risks.
Regulatory & Governance
Industry Regulations
Compliance with IT service standards and labor laws; the company is currently contesting legacy labor litigations related to HR practices.
Taxation Policy Impact
The company faces claims from indirect tax authorities that cannot be foreseen without a time limit, creating potential future liabilities.
Legal Contingencies
Significant pending litigations including an arbitration award involving HCL Infotech Limited (a subsidiary). The financial impact of this award is not yet recognized as parties have the right to challenge it. The company also faces 'legacy litigations in labor cases'.
Risk Analysis
Key Uncertainties
The primary uncertainty is the company's ability to continue as a 'going concern' without perpetual promoter support, given its continuous PBILDT losses and negative net worth of INR 291 Cr.
Geographic Concentration Risk
Concentrated in India following the divestment of international subsidiaries.
Third Party Dependencies
High dependency on HCL Corporation Private Limited (HCLC) for financial survival (INR 751 Cr total support).
Technology Obsolescence Risk
Risk that legacy data stored in older IT applications may become inaccessible due to the loss of specialized skills during organizational downsizing.
Credit & Counterparty Risk
High risk of delayed receivables from long-term contracts, a significant portion of which has already been written off.
