HCLTech draws line between ‘Advanced AI’ and buzzword AI as Q3 revenue hits $146 mn

HCLTech CEO and MD C Vijayakumar

• HCLTech's AI revenue reached $146M in Q3FY26, up nearly 20% sequentially.
• Company's total Q3FY26 revenue rose 13.3% YoY to Rs 33,872 crore
• Net profit fell 11% YoY to Rs 4,076 crore; headcount dipped by 261 employees

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HCL Technologies, on January 12, said its artificial intelligence (AI) growth is being driven by what it calls “Advanced AI” rather than the broader, general-purpose AI that much of the industry is currently talking about, as the company reported $146 million in advanced AI revenue for the December quarter of FY26 (Q3FY26).

Speaking at the company’s post-earnings press conference, chief executive officer and managing director C Vijayakumar said HCLTech’s advanced AI revenue includes work across physical AI, robotics, agentic AI, data centres, and intellectual property, and excludes AI that is merely embedded within existing services or data and analytics engagements.

“Advanced AI includes physical AI, robotics, Agentic AI, large-scale data centre professional services, IP, AI factory builds and not the general AI which the industry is calling out,” Vijayakumar said.

Faster than core growth

The advanced AI business grew nearly 20 percent sequentially, even as overall company revenue rose 4.2 percent quarter-on-quarter in constant currency terms. The Noida-headquartered firm’s total revenue for the quarter stood at $3.79 billion, helping the company cross $15 billion in annualised revenue.

A similar trend is visible at Tata Consultancy Services, where AI-led revenue is growing faster than the company’s overall business, even as it follows a different disclosure approach.

The Mumbai-headquartered firm’s AI revenue is now running at an annualised $1.8 billion, growing 17.3 percent sequentially, compared with overall company growth of under 2 percent in the same quarter.

Changing deal structures

AI-led work is also reshaping deal structures, with customers increasingly seeking operating model transformation across software development life cycles and data lifecycle management, Vijayakumar said.

He added that such engagements typically command higher pricing than conventional outsourcing deals.

The company reported $3 billion in net new bookings during the quarter, with AI, agentic systems and physical AI now embedded in a large share of new transactions.

HCLTech also raised its full-year services revenue growth guidance, citing sustained momentum in AI-driven programmes.

"As enterprises prioritise digital transformation and commercial AI adoption, HCLTech’s disciplined execution and strategic investments provide a solid foundation for ongoing leadership and innovation in the sector," according to Shubham Rathore, Principal Analyst at Gartner.

HCLTech's Q3FY26 Performance

Meanwhile, the Vijaykumar-led company's Q3 FY26 net profit declined 11 percent on-year to Rs 4,076 crore. Although consolidated revenue increased 13.3% from a year earlier to Rs 33,872 crore in the quarter ending December 31.

HCL Technologies saw its headcount decline marginally in the December quarter of FY26 (Q3FY26), even as the IT services firm continued to hire fresh graduates amid steady demand conditions.

The company reported a net reduction of 261 employees during the quarter, taking its total employee base to 2,26,379 at the end of Q3FY26, according to a release on January 12.

The sequential dip came despite the company adding 2,852 freshers during the quarter.

The company expects its revenue growth to be between 4-4.5 percent YoY in CC terms. Services revenue growth is expected to be between 4.75 percent and 5.25 percent YoY in CC.