HCL Tech’s asset-light AI play gets bullish calls from brokerages, seen better placed than TCS’ infra-led path

Brokerages turned positive on HCL Technologies Ltd after the company’s Q2 FY26 results, citing its clear focus on integrating artificial intelligence (AI) across services and maintaining an asset-light execution model. Analysts said the company’s approach contrasts with the more capital-intensive AI infrastructure push seen at peers such as TCS.

Shares of HCL Tech rose 1.5 percent to Rs 1,518 on Tuesday, their highest since August 11, as investors responded to the company’s strong deal momentum and AI-driven growth commentary.

HCL Tech’s AI focus finds favour

HCL Tech has signalled that its AI expansion will be led through services rather than heavy investments in infrastructure or proprietary platforms. Its total contract value for Q2 FY26 rose 42 percent sequentially to $2.57 billion, with management highlighting that bookings surpassed $2.5 billion “without reliance on any mega-deal.” The company also raised its services growth guidance to 4-5 percent for FY26 -- the highest among India’s top five IT firms.

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Nomura, which reiterated a Buy call and raised its target price to Rs 1,660, said HCL Tech’s strategy to remain asset-light while embedding AI into its service lines was “a step in the right direction.” Jefferies also maintained its Buy rating, lifting its target to Rs 1,730 from Rs 1,304, noting that the company’s infrastructure services heritage and AI strategy position it to gain market share amid rising global technology spending.

ICICI Securities upgraded the stock to Hold with a target of Rs 1,430, pointing out that HCL Tech is “ahead of peers in disclosing GenAI deals” and more transparent about the non-linear link between revenue growth and headcount. CLSA kept its Outperform call with a Rs 1,660 target, saying AI-led productivity gains could aid margin recovery to 18-19 percent by FY27.

Contrast with TCS’ AI investments

The optimism around HCL Tech’s AI strategy comes just days after TCS unveiled plans to build a 1 GW AI data centre in India -- a move brokerages said marks a shift towards higher capital intensity. While Avendus, Goldman Sachs and CLSA viewed TCS’s AI infrastructure plan as a long-term positive, several others flagged execution risks and near-term pressure on margins.

In contrast, HCL Tech’s model -- built on leveraging client infrastructure, expanding through AI-driven services, and avoiding large capital outlays -- is being seen by analysts as a more measured and potentially higher-return approach in the medium term.

Results snapshot

HCL Tech’s Q2 FY26 revenue rose 10.7 percent year-on-year to Rs 31,942 crore, while net profit grew 10.2 percent sequentially to Rs 4,236 crore. The company retained its full-year revenue growth guidance at 3-5 percent in constant currency and its EBIT margin guidance at 17-18 percent.

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