Riding the wave of high confidence in generative AI over the last few quarters, HCLTech saw its profit remain flat in the July-September quarter at ₹4,236 crore, the same as last year.
However, revenue rose 11% year-on-year to ₹31,942 crore, showing that AI is finally delivering positive results for the company. Notably, CEO C Vijayakumar calls it a “standout quarter on every front”, and the numbers reinforce a similar story.
Although net profit remained largely unchanged year-on-year, the company pointed to growing demand for AI-powered solutions. It revealed its advanced AI revenue crossed $100 million for the first time, accounting for approximately 3% of its revenue.
The company’s consolidated revenue rose 5.2% sequentially to ₹31,942 crore from ₹30,349 crore last quarter. In dollar terms, the revenue stood at $3.64 billion, up 5.8% YoY and 2.8% QoQ.
For comparison, HCLTech kicked off FY26 with a 9.7% net profit decline from ₹4,350 crore in Q2 FY24 to ₹3,844 crore in the last one and a revenue growth of 3.7% in the last quarter YoY.
TCS in this quarter grew at only 2.4% YoY and down 2.7% in dollar terms.
Meanwhile, the highlight was the new deal bookings topping $2.6 billion, despite no mega-deals driving that growth. This was because of two deals that carried over from the last quarter to this one.
Sector-Specific Wins
The company secured nine exclusive AI and generative AI deals in Q2 FY26, the same as the last quarter.
On monetising AI, CFO Shiv Walia said HCLTech is exploring multiple models. “We have a certain IP which is getting licensed as part of our regular pricing,” he said. At the same time, outcome-based solutions and value-sharing arrangements, where gains in productivity or velocity are monetised, are also being tested.
He said, considering that the industry is still experimenting, and “clients are also trying different models at this point”, it may take a few quarters for a clearer direction to emerge.
On hyperscaler investments, Vijayakumar said HCLTech sees a significant opportunity through its AI Foundry, playing a significant role in designing and implementing these data centres while generating associated operational revenue. “We’re already working with one of the top 10 players as part of their entire AI factory rollout,” he noted.
On US revenue, he acknowledged that it has declined slightly as a percentage of total revenue but said the mix is influenced by reporting and is not indicative of a trend. “Our bookings are well diversified across the US, Europe, and Asia Pacific,” he added, with strong traction in all regions despite macro volatility.
A US power management firm tapped the company to set up AI labs and enhance operational tech, while in aerospace, HCLTech is building advanced contour scanning software and simulation test beds to optimise manufacturing.
In Australia, a public transport authority adopted its computer vision physical AI solution to improve waterway safety. Moreover, a US telecom company launched an NVIDIA-powered AI Lab with models like Llama 405B and Maverick for rapid experimentation.
In the industrial and mining sectors, it deployed AI-driven robotic inspection platforms and digital twin solutions to automate processes, improve efficiency and integrate smart connectivity with existing infrastructure.
Vijayakumar said the company is “transitioning from AI pilot to AI monetisation”, blending IP with human-in-the-loop capabilities, and expanding AI-led services, including AI engineering.
On partnerships, he noted that collaborations with GPU providers, model and agency platforms are “instrumental in helping us deliver impactful end-to-end AI solutions that drive real business outcomes”.
On the workforce and visas front, Vijayakumar stressed that HCLTech has been reducing its reliance on H-1B visas over the years by strategically strengthening its global delivery model and emphasised plans to boost local hiring and training.
The company added 3,489 employees with 5,196 freshers in the quarter, bringing the total number of employees to 2,26,640. The company said that it will hire more freshers this year.
Walia explained that the company’s restructuring plan covered both people and non-people measures, addressing location and skill mismatches as well as efficiency in acquired businesses. He said these actions had a combined impact on the P&L, helping improve margins and operational efficiency.
The company’s net profit has been fluctuating largely because of large investments in generative AI and agentic AI. The highlight of the last quarter was the multi-year partnership the IT firm announced with OpenAI.
Industry Context and Competition
Indian IT firms have shied away from reporting exact revenue from generative AI deals, claiming that it is now part of all deals. Now, however, HCLTech is displaying optimism by bifurcating the revenue from AI.
For example, Accenture CEO Julie Sweet, in the company’s latest earnings report, said returns from AI investments have been largely “underwhelming”. Despite this, the company’s AI deal bookings doubled to $5.9 billion in the quarter.
This time, TCS has also confidently announced an approximate $6 billion investment for building AI data centres in the country over the course of five years. But the roadmap is too long for the firm. Vijayakumar said HCLTech wouldn’t comment on peers’ moves like building data centres, and that the company remains focused on building intellectual property in AI.
Last year, HCLTech also scaled its AI infrastructure through initiatives like AI Labs, which delivered 500 generative AI projects across 400 clients in FY25.
Operating margins faced some headwinds from lower utilisation rates and rising costs. Yet, the company’s overall financial health has stayed steady, underpinned by a growing pipeline of large deals and a sustained focus on innovation.
With inputs from CP Balasubramanyam
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