HCL Technologies Ltd has defied the gloom hanging over the global IT industry. In the July–September 2025 quarter, the Noida-based tech giant delivered its strongest second-quarter performance in five years, setting itself apart from peers struggling with tightening budgets and shifting market priorities. But what truly distinguishes this quarter is a first-of-its-kind milestone: HCLTech became India’s first big five IT firm to officially report revenue from artificial intelligence (AI).
With a sequential revenue growth of 2.8%, the company clocked $3.64 billion—comfortably beating Bloomberg’s analyst consensus of $3.54 billion. Net profit surged 8% to $486 million, signaling a renewed operating strength and sharper execution discipline.
The AI Breakthrough
The standout moment in HCLTech’s Q2 came from its foray into AI monetization. The company reported $100 million in revenue directly attributable to AI services—an achievement that puts it in rare company. Until now, Accenture was the only large global outsourcer to openly break out AI-driven revenue, reporting $2.7 billion from the segment. While HCLTech’s AI revenue is still a fraction of that, it marks a significant step forward for India’s IT industry, which has largely been cautious about quantifying returns from AI projects.
Unlike Tata Consultancy Services (TCS), which is investing heavily in AI data centres to fuel future growth, HCLTech is taking a more software- and platform-centric route. The company’s AI strategy is built on intellectual property and product-led solutions, mirroring Accenture’s approach of embedding intelligence into enterprise systems rather than investing in hardware infrastructure.
Riding the Wave of Financial Services and American Growth
A closer look at HCLTech’s quarterly numbers reveals where its strength came from. The banking and financial services segment contributed a fourth of its incremental $99 million in new revenue, indicating resilience in one of the most volatile client sectors. Geographically, the Americas continued to dominate HCLTech’s revenue mix, accounting for over half of its business and driving much of the quarter’s sequential growth.
Despite the strong performance, CEO C Vijayakumar struck a balanced tone in his post-earnings commentary. “The overall demand environment is more or less similar to what we saw in the last quarter,” he said, while noting that certain “discretionary spends are becoming mandatory” as enterprises push investments toward AI transformation.
Standing Apart from Peers
HCLTech’s results stand in sharp contrast to the subdued performance of larger peer TCS, which reported a modest 0.6% sequential growth to $7.47 billion. TCS’s cautious tone and heavy data centre investments signal a long-term AI play, while HCLTech is already reaping returns from near-term AI applications.
As TCS’s CEO K. Krithivasan noted, “Lingering uncertainties in the broader economic environment continue to remain a key challenge.” His remarks highlight the divergent strategies across India’s IT majors: while TCS is tightening its grip on costs and pursuing infrastructure-heavy projects, HCLTech is capitalizing on agile AI deployment and faster customer adoption cycles.
Guidance and Market Outlook
Despite the impressive numbers, HCLTech has maintained a cautious outlook for the remainder of the fiscal year. The company kept its overall revenue growth guidance at 3–5% in constant currency but raised its services revenue guidance slightly to 4–5%. The move signals confidence in its core services business while acknowledging continued softness in software demand.
Analysts echoed this sentiment. “Revenue growth was better than our expectation,” said Amit Chandra of HDFC Securities. “The higher services guidance is positive, but the overall tone remains measured.”
Managing Change: Restructuring and Workforce Shifts
While the numbers were impressive, the company’s restructuring story also drew attention. After announcing plans last quarter to streamline operations and shut redundant facilities, HCLTech clarified that workforce reductions were being managed through “regular processes.” Interestingly, it still added 3,489 employees in Q2, taking its total headcount to 226,640—making it an outlier as TCS reduced its workforce by over 19,000 in the same period.
This reflects HCLTech’s dual strategy of optimizing for efficiency while preparing for future demand, especially in AI-led projects requiring specialized talent.
No Data Centre Diversion
One of the most notable takeaways from HCLTech’s post-earnings interaction was its clear stance on not venturing into the data centre business, a move that differentiates it sharply from TCS’s $6-billion infrastructure plan. “We are very focused on building intellectual property and scaling the intelligence layer,” Vijayakumar explained. “There’s a tremendous opportunity to make that layer relevant and scalable for enterprises, and this is where we are investing.”
This reaffirmed focus on IP creation and “agentic AI” solutions underscores HCLTech’s long-term vision of being an innovation-driven, software-centric AI leader, rather than an infrastructure-heavy technology provider.
The Road Ahead
HCLTech’s Q2 results mark a turning point not just for the company but also for the Indian IT sector. Its ability to translate AI buzz into tangible revenue signals a maturity shift in how technology services companies are embracing emerging technologies. While the global macro environment remains uncertain and discretionary tech spending continues to fluctuate, HCLTech’s strategic bets on AI, coupled with disciplined financial management, position it well for sustained growth.
In a market where most players are tightening belts, HCLTech’s story this quarter is one of quiet confidence—a company not chasing the flashiest bets, but consistently executing on a pragmatic vision that blends innovation with profitability.
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