HCLTech Revenue Misses Estimates as AI Reshapes Indian IT Business Model

HCLTech has narrowly missed revenue expectations for the September quarter as cautious technology spending and the rapid adoption of artificial intelligence begin reshaping how Indian IT companies earn money from clients.

The Noida-headquartered company reported quarterly revenue of ₹35,620 crore, slightly below analysts’ estimate of ₹35,686 crore. However, profit came in stronger than expected and HCLTech also tightened its full-year revenue growth forecast.

FCRF Launches CP-FRM to Build India’s Next Generation of Fraud Risk Professionals

Revenue Misses Estimates, Profit Beats Forecast

HCLTech reported net profit of ₹5,132 crore for the quarter, ahead of analysts’ expectations of ₹4,859 crore.

Its operating margin improved to 18.2%, rising by 80 basis points from the previous quarter. The stronger margin helped offset some of the concern around slower-than-expected revenue.

The company narrowed its full-year revenue growth guidance to 2.5%–4%, compared with its earlier wider forecast.

That gives investors a clearer range for the remainder of the financial year, but also reflects an industry where customers remain selective about discretionary technology spending.

AI Revenue Is Growing Fast

One of the strongest parts of HCLTech’s results was its AI business.

Revenue linked to artificial intelligence increased to $219 million during the quarter, up from $171 million in the previous three months.

The numbers show that companies are spending more on AI implementation, automation and new enterprise systems.

But AI is creating a more complicated problem for traditional IT service providers at the same time.

AI Is Also Changing How Clients Pay IT Companies

For decades, much of the Indian IT outsourcing model depended on companies billing customers according to the number of employees assigned to a project or the amount of work performed.

AI can automate parts of that work.

As a result, some clients are increasingly moving towards outcome-based contracts, where they pay for a completed result rather than the number of engineers or working hours involved.

That means an IT company may be able to complete the same work using fewer employees or in less time.

For clients, this can reduce costs. For companies such as HCLTech, TCS, Infosys and Wipro, it creates pressure to replace older revenue streams with higher-value AI, cloud, cybersecurity and consulting work.

$3.26 Billion in New Deals Provides Support

HCLTech reported new deal wins worth $3.26 billion during the quarter.

A major contributor was a $1.14 billion contract with Mercedes-Benz, giving the company a large long-term revenue opportunity even as smaller discretionary technology projects remain under pressure.

Large contract wins are particularly important during slower periods because they provide greater visibility over future revenue.

The company’s stronger deal pipeline also suggests that corporations are not completely withdrawing technology spending. Instead, budgets are increasingly being concentrated around large transformation projects, cloud infrastructure and AI.

HCLTech Deepens AI Push With Anthropic Deal

Hours before announcing its quarterly results, HCLTech also unveiled a strategic partnership with Anthropic, the company behind the Claude AI models.

HCLTech plans to create a dedicated business unit that will help companies adopt Anthropic’s AI technology. The partnership will focus particularly on enterprise AI agents, security, governance and responsible deployment.

Agentic AI refers to systems that can perform multi-step tasks with greater independence instead of simply responding to individual prompts.

For an IT services company, this creates a new business opportunity. Large organisations increasingly need help connecting these AI systems to their internal software, data and workflows while controlling security and compliance risks.

Indian IT Industry Faces the Same AI Transition

HCLTech is not alone in dealing with this shift.

TCS recently reported its weakest sequential September-quarter revenue growth in three years even as its annualised AI revenue climbed to $3.1 billion. Its management also pointed to continued scrutiny of discretionary technology projects.

The pattern illustrates a broader transition across India’s $300-billion-plus technology services industry.

AI is generating new contracts, but it is also reducing the amount of traditional manual work needed for software development, testing, customer support and other outsourced services.

The companies that benefit most may therefore not simply be those selling the largest number of AI projects. They will need to earn more from each project even when automation means fewer employees are required to deliver it.

What This Means for You

For employees in India’s IT sector, HCLTech’s results show why AI skills are becoming increasingly important.

The technology is not only creating new specialist jobs. It is also changing the economics of existing software and outsourcing work by allowing companies to complete some tasks with smaller teams.

For customers, the shift could mean faster technology projects and lower costs as contracts increasingly focus on results rather than manpower.

For investors, the key question is becoming whether Indian IT companies can grow their AI businesses quickly enough to replace revenue that automation may reduce in traditional services.