HCLTech tops Q1 estimates as AI bookings lift Indian IT
HCLTech beat first-quarter profit and revenue expectations on Monday, joining larger rival TCS in signalling a potential earnings recovery for India's $315 billion IT sector despite persistent client spending cuts.
HCLTech reported a 20.3% jump in first-quarter net profit to 46.24 billion rupees, surpassing analyst estimates of 45.12 billion rupees. Consolidated revenue rose 13.94% year-on-year to 345.79 billion rupees, edging out expectations of 343.5 billion rupees.
A significant portion of the top-line growth stemmed from currency fluctuations rather than purely organic expansion. The Indian rupee depreciated by roughly 9% against the US dollar during the quarter, inflating the value of foreign-currency billings. Stripping out this exchange-rate impact, constant currency revenue grew a more modest 2.6%.
The underlying operational metrics provided a more optimistic read on the company's pipeline. New bookings surged to $2.4 billion, up sharply from $1.9 billion in the prior quarter and $1.8 billion a year earlier. Revenue from advanced AI services, including agentic AI and AI engineering, climbed to $171 million from $155 million sequentially.
These results arrive at a testing time for India's IT services industry. Analysts have recently trimmed forecasts for the sector as global clients tighten budgets on non-essential technology and weigh the potential for advanced AI to disrupt traditional software services models.
HCLTech's ability to grow its AI-specific revenue and secure robust new contracts suggests it is navigating these headwinds effectively. Growth was concentrated in financial services, technology and retail segments. The earnings beat follows a similar surprise last week from Tata Consultancy Services. Together, the results offer investors tentative evidence that the worst of the sector's earnings slowdown may be passing, particularly for firms with established enterprise clients.
