HCLTech Reports $876 Million in Annualised Advanced AI Revenue, Up 72% YoY

HCLTech reported $876 million in annualised advanced artificial intelligence (AI) revenue for the July–September 2026 quarter, marking a 72% year-on-year increase, according to Moneycontrol. The company’s advanced AI business generated $219 million during the quarter, with revenue growing 28.4% sequentially and 78% year-on-year in constant-currency terms. The figures highlight the growing contribution of AI-related services to the Indian IT services provider’s business as enterprises invest in automation, AI engineering and technology modernisation.

The AI growth came alongside an improvement in HCLTech’s overall financial performance. Consolidated revenue rose 11.5% year-on-year to ₹35,620 crore, while net profit increased 21.2% to ₹5,132 crore in Q2 FY27. Operating margin expanded to 18.2%, and new deal bookings reached approximately $3.3 billion. However, the company also narrowed its full-year revenue-growth guidance to 2.5%–4% in constant-currency terms, indicating that strong AI demand is developing alongside cautious client spending and pricing pressure on traditional IT services.

Key Takeaways

• Annualised AI revenue: HCLTech reported $876 million in annualised advanced AI revenue in Q2 FY27, up 72% year-on-year as reported by Moneycontrol.
• Quarterly AI revenue: Advanced AI generated $219 million during the quarter, up 28.4% sequentially and 78% year-on-year in constant currency.
• Profit growth: Consolidated net profit increased 21.2% year-on-year to ₹5,132 crore.
• Revenue growth: Revenue rose 11.5% year-on-year to ₹35,620 crore.
• Operating margin: EBIT margin expanded to 18.2%, an increase of 131 basis points quarter-on-quarter.
• Deal bookings: New deal bookings reached approximately $3.3 billion, up 27% year-on-year.
• Major contract: A $1.14 billion deal with Mercedes-Benz was among the company’s reported wins.
• FY27 outlook: HCLTech revised its full-year revenue-growth guidance to 2.5%–4% in constant-currency terms.

HCLTech’s Advanced AI Revenue Reaches $876 Million

HCLTech’s latest results indicate that AI-related services are becoming a more important source of business for the company. The company reported an annualised advanced AI revenue figure of $876 million in Q2 FY27, up 72% year-on-year, according to Moneycontrol.

The term “annualised revenue” requires careful interpretation. HCLTech generated $219 million in advanced AI revenue during the quarter. Multiplying this quarterly amount by four produces the $876 million annualised run rate. It does not mean the company actually earned $876 million from advanced AI services during the July–September quarter or across the preceding 12 months.

The company also reported that quarterly advanced AI revenue increased 28.4% from the previous quarter and 78% year-on-year in constant-currency terms. These growth rates describe the performance of the quarterly revenue stream, whereas the 72% headline growth refers to the annualised figure cited in Moneycontrol’s report.

Advanced AI services cover more than the deployment of standalone chatbots. Enterprise clients may require help integrating AI into existing applications, automating business processes, building AI-enabled software, modernising data infrastructure and introducing AI systems into engineering and operational workflows.

HCLTech has been developing offerings in areas such as AI factories, physical AI, semiconductor design for inferencing, AI-led marketing services and platform-based solutions. These services can involve consulting, engineering, implementation and ongoing support, allowing technology providers to participate in several stages of enterprise AI adoption.

The reported revenue growth suggests that the company’s AI offerings are gaining traction. However, a higher annualised revenue run rate does not independently establish how profitable every AI engagement is, how much revenue is recurring or how much of the growth will be sustained over future quarters.

What Is Driving Demand for HCLTech’s AI Services?

Businesses are increasingly examining how AI can improve productivity, automate repetitive work and support faster software development. The commercial challenge is moving from experimentation to deployments that deliver measurable results within existing technology environments.

Many large organisations operate complex IT systems built over several decades. Introducing AI into these environments can require data preparation, software integration, cybersecurity reviews, governance controls and changes to business processes. IT services providers can help clients manage this work.

HCLTech’s business spans IT and business services, engineering and research and development services, and software products. This breadth allows it to work on AI applications across different industries and technology layers.

Enterprise AI requires more than a model

An enterprise adopting AI typically needs several components:

• Data infrastructure: Systems must make relevant data accessible, consistent and secure.
• Application integration: AI tools must connect with existing business software and workflows.
• Engineering: Companies need applications and systems designed to use AI effectively.
• Security and governance: Organisations must manage access controls, privacy, reliability and compliance.
• Ongoing operations: AI systems need monitoring, maintenance and performance evaluation after deployment.

These requirements create opportunities for IT services firms, although the size of the opportunity depends on client budgets and the ability to demonstrate measurable business benefits.

HCLTech’s leadership has said that its AI propositions are helping deepen client relationships and support larger engagements. The company’s reported revenue growth and deal bookings offer evidence of commercial activity, but they do not establish that all AI initiatives across the industry have reached large-scale deployment.

Quarterly Results: Revenue and Profit Both Increase

HCLTech’s AI performance came alongside growth in its consolidated financial results for the September quarter.

Financial metric	Q2 FY27	Reported comparison
Revenue from operations	₹35,620 crore	Up 11.5% YoY
Consolidated net profit	₹5,132 crore	Up 21.2% YoY
EBIT margin	18.2%	Up 131 basis points QoQ
Advanced AI revenue during the quarter	$219 million	Up 28.4% QoQ in constant currency
Annualised advanced AI revenue	$876 million	Up 72% YoY, as reported by Moneycontrol
New deal bookings	Approximately $3.3 billion	Up 27% YoY

Source: HCLTech’s Q2 FY27 results and Moneycontrol’s October 12, 2026, report. Constant-currency comparisons adjust for exchange-rate movements.

The 21.2% increase in net profit was faster than the reported growth in revenue. Profitability was supported by the improvement in operating margin, although the quarter’s reported margin included the impact of restructuring costs.

The company said its EBIT margin rose to 18.2%, an increase of 131 basis points from the previous quarter. One basis point equals 0.01 percentage point. A 131-basis-point improvement therefore represents a 1.31-percentage-point increase in margin.

Management attributed part of the improvement to disciplined execution, a favourable service mix and the contribution from advanced AI revenue. The company also said that AI was improving productivity and helping it deliver better client outcomes.

The margin improvement is relevant because IT services firms are under pressure to show that AI can improve their own operating efficiency as well as generate revenue from new client projects. However, margins can also be influenced by utilisation, employee costs, project mix, currency movements and restructuring expenses.

Deal Bookings Reach Approximately $3.3 Billion

HCLTech recorded approximately $3.3 billion in new deal bookings in Q2 FY27, up 27% year-on-year, according to the company’s results announcement. The bookings were a key indicator of demand for the company’s services and its ability to secure future work.

One of the significant reported wins was a $1.14 billion AI-related deal with Mercedes-Benz. The contract highlights the role that AI and engineering services can play in large enterprise technology programmes.

Deal bookings and revenue are not the same. Bookings represent the value of contracts signed or secured during a period, subject to the company’s reporting methodology. Revenue is recognised as services are delivered or contractual obligations are fulfilled.

A large contract may generate revenue over several years rather than being recognised entirely in the quarter in which it is signed. The timing of project starts, implementation milestones and client spending can therefore influence how quickly bookings translate into reported revenue.

For investors, strong deal bookings can improve visibility into future business activity, but the amount eventually recognised as revenue depends on execution and the terms of the contracts. Bookings alone do not guarantee a particular revenue-growth rate or profit margin.

HCLTech said first-half deal bookings reached a record level. This provides a positive indicator of demand, although the company’s revised annual revenue guidance shows that the conversion of contracts into revenue remains subject to market conditions.

HCLTech Revises FY27 Revenue-Growth Guidance

Despite strong AI growth and deal bookings, HCLTech revised its full-year FY27 revenue-growth guidance to 2.5%–4% in constant-currency terms. The company raised the lower end of its previous range while retaining the upper end.

It retained its EBIT-margin guidance at 17.5%–18.5%.

The guidance reflects a business environment in which enterprises continue to spend on technology but remain selective about discretionary projects. Geopolitical uncertainty, economic conditions and the disruptive effect of AI on traditional pricing models have affected the outlook for the wider Indian IT services industry.

AI creates a two-sided challenge for established technology companies. It can generate new demand for consulting, engineering and implementation services, but it can also make some existing work faster or cheaper to deliver. If clients pay less for tasks that can be automated, service providers must find ways to expand their offerings and capture value from the resulting productivity improvements.

HCLTech’s advanced AI growth is therefore important, but the company must also manage the performance of its traditional services and software businesses.

The revised guidance does not mean that the company expects AI revenue to decline. Rather, it shows that growth in one business area does not automatically determine the performance of the entire company.

AI Could Improve Productivity, but It Also Creates Pricing Pressure

One of the major questions facing Indian IT services firms is how to distribute the economic benefits of AI between providers and customers.

Traditionally, many IT services engagements have relied on billing based on employee hours or the size of a delivery team. AI tools can automate parts of coding, testing, documentation, customer support and other activities, potentially allowing work to be completed with fewer hours.

For clients, that can mean faster delivery and lower costs. For service providers, however, it can put pressure on revenue if contracts are priced according to labour input rather than the value delivered.

HCLTech has said that it is embedding AI across existing and new engagements to improve productivity, quality and client outcomes. It has also described AI-led service transformation as a way to win larger engagements and expand its market share.

The company’s challenge is to turn productivity gains into a sustainable business model. That could involve selling more advanced services, taking on broader transformation projects, developing reusable platforms or charging for outcomes rather than simply for labour hours.

There is no guarantee that every productivity improvement will lead to higher profits. Clients may negotiate lower prices, competitors may offer similar services and the cost of developing new AI capabilities can be substantial.

The results therefore need to be assessed through both revenue growth and margin performance. HCLTech’s 18.2% EBIT margin in Q2 FY27 offers a snapshot of its profitability, but future results will show whether it can sustain the improvement as AI changes the economics of IT services.

HCLTech’s Partnership With Anthropic

HCLTech also announced a Global Premier Partnership with AI company Anthropic to accelerate the adoption of agentic AI across global enterprises.

Agentic AI refers to systems designed to perform multi-step tasks with varying degrees of autonomy, rather than responding only to a single user prompt. In enterprise settings, such systems may support software engineering, IT operations, business workflows and other activities, subject to appropriate permissions and human oversight.

The partnership is intended to help clients adopt AI systems with attention to safety, cybersecurity and governance. HCLTech said the collaboration would include a dedicated business unit and a centre of excellence to support enterprise deployments.

HCLTech also plans to integrate Anthropic’s Claude models and Claude Code into its AIForce platform for areas such as IT support, code remediation and digital services. These initiatives could help the company combine AI models with its existing consulting, engineering and technology services.

The partnership is strategically relevant because enterprise clients often need more than access to a model. They need help choosing applications, integrating systems, managing risk and measuring business outcomes.

However, the announcement should not be treated as evidence of a specific revenue contribution from Anthropic. The financial results do not separately disclose how much of the $219 million in quarterly advanced AI revenue came from this partnership.

What the Results Mean for India’s IT Services Industry

HCLTech’s results arrive as Indian IT services companies adapt to a technology cycle in which AI is changing both customer demand and delivery models.

Companies are looking for help deploying AI, modernising applications and managing data. At the same time, they are examining whether AI can reduce the amount of time required for traditional software development and support tasks.

This creates opportunities for companies that can combine technical expertise, industry knowledge, cybersecurity and implementation capabilities. It also creates pressure on firms whose revenue models depend heavily on charging for employee time.

HCLTech’s growth in advanced AI revenue suggests that specialised AI work is becoming a measurable business line. Its deal bookings indicate that clients continue to sign contracts, while its margin improvement suggests that the company has been able to improve profitability during the quarter.

The wider question is whether such performance can be repeated across future quarters. AI revenue growth rates can be high when a business line is expanding from a relatively small base. Investors will need to track absolute revenue, the contribution to overall growth, profitability and the durability of client demand.

The industry’s transition will also depend on how quickly customers move from pilot projects to production deployments. Experimental programmes may generate limited revenue, whereas large-scale implementations can require significant spending on infrastructure, software integration, governance and ongoing support.

The Bigger Picture

HCLTech’s $876 million annualised advanced AI revenue figure illustrates how AI is emerging as a more significant part of India’s IT services business. The company combined strong AI growth with higher quarterly revenue, a 21.2% increase in net profit, improved operating margins and approximately $3.3 billion in new deal bookings. Its partnership with Anthropic adds another route to enterprise AI deployments, particularly in agentic systems and AI-assisted engineering.

The opportunity is not without risks. AI can create demand for new services while reducing the time and price associated with some traditional work. HCLTech must demonstrate that new AI offerings can offset this pressure and translate into sustained revenue and profitability. Its revised FY27 growth guidance reflects the uncertainty that remains even as the advanced AI business expands rapidly.

Looking Ahead

Investors will monitor HCLTech’s advanced AI revenue, new deal bookings, operating margin and the conversion of contracts into reported revenue in the coming quarters. The commercial success of its enterprise AI and Anthropic initiatives will depend on customer adoption, measurable productivity benefits and the ability to deploy systems securely at scale. Continued growth in AI services could support the company’s business mix, but it will need to be assessed alongside traditional IT services and software performance.

For now, HCLTech’s results show that AI is contributing to both revenue opportunities and changes in how the company delivers services. The $876 million annualised figure is an important indicator of momentum, not a guarantee of future revenue. The more meaningful long-term test will be whether the company can sustain AI demand, preserve pricing power and convert productivity gains into durable earnings growth.