Its operating revenue, however, was up 1.9 per cent to Rs 927.1 crore for the reported quarter as against Rs 909.5 crore in April-June, 2016.
"June quarter has traditionally been a soft quarter for HGS. In line with this trend, topline in first quarter posted a moderate growth of 6.4 per cent year-on-year in constant currency terms," HGS CEO Partha DeSarkar said.
Revenue growth and margins in rupee terms were muted, mainly due to adverse forex impact of 4.5 per cent from a strong rupee and lower profitability of India domestic business, he added.
"Looking ahead, we see a robust pipeline led by our investments in client-facing activities and technology-led solutions in automation, digital and analytics. As with previous years, we expect second half to be better than the first half (April-September)," he said.
HGS' capex and investments stood at Rs 39.5 crore at the end of June 2017 quarter.
It had 44,877 employees as on June 30, 2017.
The company received about 65 per cent of revenues from the US, 11 per cent from Canada, 8 per cent from the UK and Europe and 16 per cent from India.
"Revenue growth in the first quarter was mainly driven by domestic revenues, aided by a decent 10.3 per cent year-on- year growth from healthcare, with US dollar originating revenues growing 5.2 per cent year-on-year," HGS said in an investor presentation.
The board has declared an interim dividend of Rs 2.5 per share.