HCLTech's bet on artificial intelligence is beginning to show up in its revenue mix. The company reported a 62.1% year-on-year jump in its Advanced AI business in Q1 FY27, even as traditional IT services continued to face pricing pressure from AI-driven automation.
The Noida-based IT services company said its Advanced AI revenue reached $171 million during the first quarter of the current fiscal year, up 10.6% sequentially in constant currency, taking the annualised run rate to $688 million.
"Our intent is to benefit disproportionately from AI-native and AI-amplified opportunities, which together represent the fastest-growing pool of enterprise spending," chief executive C Vijayakumar said in a press conference after announcing the company's results.
He said HCLTech's strategy is to grow faster in emerging AI services while innovating rapidly enough in traditional IT outsourcing to stay ahead of the deflationary curve created by AI-driven productivity gains.
"In AI-disrupted services, we intend to innovate faster than the market to stay ahead of the deflationary curve rather than be defined by it," Vijayakumar said.
His comments come at a time when India's IT services industry is facing challenges as AI-led productivity improvements reduce effort, compress contract values, and reshape traditional outsourcing economics.
HCLTech reported a 20.3% year-on-year increase in consolidated net profit to ₹4,626 crore, while revenue rose 13.9% year-on-year to ₹34,579 crore during the quarter ended June 30. In constant currency, revenue grew 2.6% from a year earlier but declined 0.5% sequentially, reflecting the seasonally weak first quarter.
Vijayakumar said the June quarter is typically softer because of planned productivity commitments in several large managed services contracts, but described the overall performance as resilient.
The company also posted its highest-ever first-quarter net new bookings of $2.4 billion. The deal pipeline, Vijayakumar said, remains healthy for the company and noted that it increasingly reflects a split between AI-native work, AI-enabled transformation programmes and conventional services that are being automated.
He said AI-native and AI-enabled services continued to grow while traditional commoditised work was increasingly being automated.
Acquisitions Game
As part of its AI strategy, HCLTech recently completed the acquisition of Jaspersoft, adding data visualisation capabilities to its software portfolio and strengthening its enterprise data stack.
The company also highlighted its $151-million strategic investment in Sarvam AI, saying the partnership would help it build sovereign AI capabilities spanning foundation models, enterprise platforms and managed services tailored for India.
Data Centre Investment
The company also announced plans to enter the AI infrastructure business by investing up to ₹3,500 crore in AI-ready data centres, betting that sovereign AI requirements and rising GPU demand will create a new growth engine beyond traditional IT services.
"We believe AI-ready data centres and full-stack AI infrastructure will become a new growth vector for HCLTech," Vijayakumar said.
Despite continued macro uncertainty, HCLTech retained its FY27 guidance of 1-4% constant currency revenue growth.
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