HCLTech Surpasses $15 Billion Revenue Milestone, Eyes AI-Led Growth

HCLTech on Friday announced a strong financial quarter, pushing its annualized revenue past the $15 billion mark for the first time. The IT services giant reported quarterly revenue of $3.79 billion, with consolidated revenue reaching ₹33,872 crore, a 13.3% year-on-year increase. This performance was underpinned by a strategic focus on artificial intelligence and automation, alongside a robust engineering services segment.

Life Sciences Softness Persists

CEO and managing director C Vijayakumar acknowledged continued weakness in the life sciences and healthcare vertical, primarily in the U.S. He noted that the sector, which experienced a post-Covid boom, is now moderating due to pressure on healthcare spending. However, Vijayakumar anticipates this slowdown will stabilize over the next two quarters.

Doubling Down on AI and Engineering

Despite headwinds in traditional verticals and uneven global tech spending, HCLTech is aggressively investing in what it identifies as future growth drivers: advanced AI, engineering-led services, and large-scale digital transformation. Vijayakumar highlighted the company's "AA vision"—an AI and automation-led strategy—anchored in deep engineering capabilities and AI-first offerings. Revenue from advanced AI services, encompassing physical AI, robotics, AI factory solutions, and custom silicon engineering, grew nearly 20% sequentially to approximately $148 million.

Engineering and R&D services were a standout, reporting 10.8% year-on-year growth. Net new bookings reached $3 billion for the quarter, including a significant five-year strategic engagement worth $475 million for AI-led technology modernization. The company also secured a large win from a U.S. insurance firm to modernize its application and data landscape using its GenAI-led platform.

Strategic Acquisitions Bolster Offerings

HCLTech is set to acquire Hewlett Packard Enterprise's (HPE) Telco Solutions business. This move is designed to strengthen its presence in telecom engineering services and expand its client base in a market valued at $300 billion. The acquisition aligns with the rising investments in AI-enabling infrastructure such as networks, edge computing, and data centers. Last year's acquisition of HPE's Communications Technology Group has already shown growth exceeding the company's overall rate.

Guidance Raised, Analyst Optimism

Buoyed by strong execution and bookings, HCLTech raised its full-year services growth guidance to 4.75–5.25% in constant currency, while maintaining its EBIT margin band of 17–18%. Operating margin for the quarter stood at 18.6%. Shubham Rathore, principal analyst at Gartner, commented that HCLTech's performance mirrors broader enterprise IT spending trends, particularly in AI and cloud services, underscoring its ability to deliver value amid macroeconomic pressures.

Talent and Attrition

Total headcount stood at 226,379, with the company adding 2,852 freshers this quarter, bringing total fresher additions for the fiscal year to over 10,000. Attrition in IT services improved to 12.4%, a development described as a positive sign for the company. HCLTech also noted a growing focus on hiring specialized "elite engineers."