HCL Technologies reported robust third-quarter results this week, driven by enterprises accelerating AI adoption from experimental pilots to large-scale operating model overhauls, even as broader IT spending lags.
India’s third-largest IT services provider logged $3.79 billion in revenue for the quarter ended December, up 4.8% year-on-year in constant currency, with net new deal bookings surging 43% to $3 billion (the strongest in four years). Executives framed this as a pivotal shift: clients now prioritize AI-led transformations across applications, data platforms, and infrastructure over traditional discretionary projects.
India’s third-largest IT services provider logged $3.79 billion in revenue for the quarter ended December, up 4.8% year-on-year in constant currency, with net new deal bookings surging 43% to $3 billion (the strongest in four years).
Enterprise AI operating models evolve
CEO C. Vijayakumar highlighted AI’s evolution from point solutions to foundational redesigns. “Last year was about proving value. Now enterprises are reimagining end-to-end business processes,” he said on the earnings call. This demands larger, multi-year deals but yields durable outcomes.
Advanced AI revenues jumped nearly 20% year-on-year, fueled by agentic AI (autonomous systems that handle complex workflows), physical AI for real-world applications, and AI factories. HCLTech revealed these figures publicly for the first time, underscoring AI’s enterprise-scale materiality.
Enterprises are ramping up “day-minus-one” AI prep work: building AI data centers, engineering custom silicon for edge inferencing, and scaling infrastructure ops. These tie into capex budgets, bypassing discretionary constraints, as firms like global tech giants tap HCLTech for hyperscale AI builds via partnerships with Nvidia, Dell, HPE, Cisco, and cloud majors.
Agentic AI fuels major enterprise wins
Custom silicon is emerging as a linchpin for enterprises optimizing AI ROI. “Standard GPUs at the edge are unviable,” Vijayakumar noted, with tailored chips enabling efficient inferencing across industries like manufacturing and retail.
Agentic platforms drove 62% of bookings from applications and engineering services. Highlights included a $473 million, five-year pact with a global apparel retailer for app modernization via HCLTech’s agentic AI Force 2.0, and a U.S. insurer consolidation replacing legacy providers with AI-spanning dev, test, and infra.
These deals spotlight AI’s enterprise impact: accelerating legacy modernization, data lifecycle management, and workflow automation for CIOs navigating hybrid cloud and regulatory pressures.
Data platforms anchor AI growth
HCLTech’s software arm rebounded 28.1% sequentially to $1.07 billion in annual recurring revenue, up 6% year-on-year, on demand for metadata management, governance, and analytics (key for enterprise AI trust and compliance). Acquisitions like JasperSoft and Wibidata enhance this AI-powered stack amid sovereign data mandates.
Enterprises chase AI spend frontiers
Margins held at 18.6% despite restructuring. FY26 services growth guidance rose to 4.75-5.25%. Executives project a leaner cost base post-Q4, with pipelines strong in AI infrastructure and platforms.
Vijayakumar urged focus on “where new spending is happening (AI engineering and modernization).” This strategy positions HCLTech at the heart of enterprise AI pivots, from C-suite strategy to shop-floor execution.