HCLTech’s artificial intelligence strategy, as demonstrated in its latest quarterly earnings commentary, underscores a growing divergence in how India’s top IT firms are approaching the AI transition, experts observed. While Tata Consultancy Services (TCS) is taking an infrastructure-first route, committing billions to build domestic AI capacity, HCLTech is opting for an “asset-light” model that leans on proprietary software, differentiated IP and client-side transformation.
“While TCS is making bold, capital-intensive moves to secure a leadership position in AI infrastructure, HCLTech’s approach reflects a more measured, service-led strategy,” analysts from ICICI Securities noted.
TCS’ AI ambitions are anchored in a five-pillar plan designed to make it the “world’s largest AI-led technology services company.” As CEO K Krithivasan outlined during the latest earnings call, this includes internal transformation through the ‘TCS to the Power of AI’ programme, the redesign of all service lines into human-plus-AI models, and embedding AI-led delivery into every client engagement.
The company is also expanding its ecosystem play through a new subsidiary that will build a sovereign AI data centre network with up to 1 GW capacity — a phased investment expected to unfold over five-to-seven years. The project, expected to cost $1 billion for every 150 megawatt capacity addition, will operate on a co-location model, serving hyperscalers, deep-tech firms, government agencies and Indian enterprises.
“We believe there is a significant unmet demand for AI-ready data capacity in India, and this will create a strong annuity revenue stream,” Krithivasan said. In contrast, HCLTech’s strategy revolves around scaling AI capabilities without heavy capital expenditure. Its approach rests on four pillars: transforming existing services even at the cost of disrupting legacy revenue, developing proprietary intellectual property, expanding into AI-led services such as engineering and advisory, and deepening technology partnerships across the AI stack.
“HCLTech is proactively transforming services with a long-term view and the confidence to evolve, even if it means disrupting part of the existing revenue base,” analysts from Emkay noted. The company’s AI Force platform — now deployed across 47 client accounts — automates software design and testing, improving developer productivity by up to 40%.
Meanwhile, its AI Factory proposition, built in collaboration with partners such as Nvidia and Dell, aims to deliver modular AI infrastructure for clients without owning physical assets. HCLTech generated $100 million (around Rs 835 crore) in advanced AI revenue during the September quarter, roughly 3% of total revenue, marking one of the first clear disclosures of AI monetisation by an Indian IT services firm.
Nuvama Research analysts described this early traction as “a key differentiator,” adding that “AI investments are now yielding results as the company moves from the pilot to the monetisation phase.” Sequentially, HCLTech’s performance reflected solid execution. Revenue rose 5.2% quarter-on-quarter to Rs 31,942 crore, while net profit climbed 10% to Rs 4,236 crore, buoyed by broad-based services growth and operating efficiency gains. The company added around 3,500 employees during the quarter, maintaining productivity-led growth while scaling AI delivery.
Its total contract value stood at $2.6 billion (about Rs 21,700 crore), up 42% sequentially, even without mega deals.For the second half, the company management retained full-year revenue growth guidance of 3-5%, while increasing the lower end of the services revenue guidance at 4-5%, signalling confidence in the demand pipeline.
Margins, however, are expected to ease as annual wage hikes and ongoing restructuring weigh on profitability. “The lower margin profile shall leave HCLTech with almost zero EPS (earnings per share) growth in FY26,” analysts from Nuvama said, though they added that cash generation remains strong.Analysts expect the coming quarters to bring both opportunities and challenges. Faster AI adoption, healthy deal conversions and steady traction in BFSI and healthcare could provide momentum, even as wage hikes, a subdued software segment, and cautious US spending pose possible headwinds.