HCL Infosystems has no ability to invest in new businesses or expand its existing operations, said Chairman Nikhil Sharma. .
The loss making company will continue to contract in the foreseeable future as it focuses on supporting legacy contracts and recovering long-overdue customer dues, he said in the latest annual report.
Financial support from promoters
The company has also continued to rely on financial support from promoter entities to meet its operational and contractual obligations.
HCL Corporation Pvt Ltd and HCL Capital Pvt Ltd have approved support of up to ₹1,500 crore each through guarantees, loans, advances, debentures and other financial instruments.
Strengthens liquidity
HCL Capital has provided ₹355 crore through unlisted unsecured redeemable non-convertible debentures, with the proceeds used to repay earlier loans availed from HCL Corporation.
HCL Corporation’s approved support includes corporate guarantees, liens on fixed deposits and interest-free unsecured loans, while the promoter entities continue to support the company’s obligations linked to its long-term contracts.
Losses widen during FY26
In FY26, HCL Infosystems reported a net loss of ₹33 crore compared with ₹21 crore in the comparable period last year, while revenue from operations declined to ₹22 crore from ₹25 crore.
The Group’s current liabilities exceeded current assets by ₹484 crore as of March 2026, while its net worth remained fully eroded.
Recoveries remain key focus
During FY26, the company continued to focus on reducing future losses and recovering long-overdue receivables from customers through arbitration proceedings. It realised ₹23 crore from customers during the year, although delays in customer acceptance and project completion sign-offs continued to affect collections.
The company received a favourable arbitration award of about ₹103 crore, including interest, against one customer, while the customer’s counter-claim of about ₹73 crore was disallowed by the Arbitral Tribunal, he said.
Arbitration proceedings continue
The customer has challenged the award, and the company continues to pursue recovery through appropriate legal channels. It also signed an MoU with a power project customer for settlement of dues and submitted it to the Arbitral Tribunal for inclusion in a consent award.
The company has initiated arbitration proceedings against several customers to recover outstanding receivables, while continuing to support the execution of long-term contracts.
Legacy contracts add pressure
The losses were primarily attributed to delayed receipts from system integration contracts, historical low-margin contracts and costs related to large litigations at various stages.
The Group continues to have obligations linked to long-term contracts originally forming part of its Hardware Solutions Business, which was transferred to HCL Infotech Ltd under a Scheme of Arrangement. The remaining contracts run up to 2031, requiring continued operational and financial support.
Legal costs remain high
Multiple legal proceedings and legacy issues have resulted in significant costs. Legal expenses, along with manpower and other operational costs, continued to contribute to the Group’s losses during FY26.
The Group operates through a single segment comprising IT support services and has said that its focus will remain on continuity of operations, execution of legacy contracts and recovery of long-pending customer dues.