NEW YORK: HCLTech Ltd., India’s third-largest software services exporter, raised its full-year sales forecast after quarterly revenue from advanced artificial intelligence solutions crossed $100 million, signaling a new phase of monetization for the technology.
The company now expects constant-currency services revenue to grow 4% to 5% in the fiscal year through March 2026, up from its previous outlook. It retained its overall revenue and operating margin guidance.
For the quarter ended Sept. 30, revenue climbed 4.6% year-on-year in constant currency to $3.6 billion, with new bookings hitting a record $2.5 billion without a single large deal.
“Our AI strategy is no longer just a vision; it is now a measurable driver of growth,” Chief Executive Officer C. Vijayakumar said in a statement. “We are transitioning into an AI monetization phase.”
The results from the Noida-based company underscore how Indian IT firms are beginning to capitalize on the global rush to adopt AI, moving beyond pilot projects to large-scale implementations. HCLTech’s performance, driven by deals with clients in telecommunications, manufacturing and financial services, suggests corporate spending on technology is stabilizing after a period of uncertainty.
Financial and Operational Highlights
Digital revenue, which includes AI and cloud-based services, surged 15% from a year earlier and now makes up 42% of the total services revenue. The company’s software division maintained a steady pace with annual recurring revenue of $1.06 billion.
Geographically, Europe was a strong performer with 7.6% growth, while the “Rest of the World” category, which includes markets like Australia, led with 17.9% growth. Growth in the key United States market was more muted at 2.4%.
Chief Financial Officer Shiv Walia highlighted the company’s improved capital efficiency, with a last-twelve-month return on invested capital rising 290 basis points to 38.6%. The company also declared a dividend of ₹12 per share.
In a sign of cautious optimism, HCLTech added 5,196 freshers during the quarter, bringing the total for the first half of the fiscal year to 7,180. Attrition continued to moderate, falling to 12.6%.
AI Deals Drive Momentum
The quarter was marked by several significant AI contract wins, showcasing the breadth of HCLTech’s offerings. A UK financial services firm selected the company to modernize its digital banking platforms using AI to automate software development. In a different application, a public transport authority in Australia chose HCLTech to implement a computer-vision AI system to enhance safety across its waterways.
In a notable win, a leading US telecom company partnered with HCLTech to launch an NVIDIA-powered AI lab, where HCLTech will deploy advanced models like Llama 405B to accelerate the client’s AI experimentation.
“This superior revenue growth is accompanied by enhanced profitability and solid cash generation,” CFO Walia said.