Growth Potential
Seeing higher discretionary spending on AI deals, says HCL Technologies
This story was originally published at 20:59 IST on 13 October 2025
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--HCL Tech: Q2 was strong with broad-based growth, exceptional bookings
--CONTEXT: HCL Tech mgmt's comments at post-earnings virtual press call
--HCL Tech: Q2 deal bookings balanced across service lines, geographies
--HCL Tech: Advanced AI revenue excludes generative AI, agentic AI
--HCL Tech: Seeing some impact in mfg due to slowdown in auto
--HCL Tech: Nearly all Q2 deals include AI element
--HCL Tech: Added 5,196 freshers in Q2, double the number added year ago
--HCL Tech: Overall Q2 demand environment more or less similar to Q1
--HCL Tech: Expect good bookings in coming quarter
--HCL Tech:See good AI trajectory; lot of discretionary spend happening on AI
--HCL Tech: We don't have big acquisition plans
By Shakshi Jain and Anjana Therese Antony
NEW DELHI/MUMBAI – While the overall demand environment remained largely the same sequentially in the September quarter, HCL Technologies Ltd. is seeing higher discretionary spending on artificial intelligence deals, the company management said in a post-earnings virtual press conference Monday. The information technology major crossed the $100 million mark in revenue from advance AI deals during Jul-Sept. The category accounted for 3% of the company's revenue for the quarter.
"I think this is going to be a good trajectory because we see, I mean, in everything that we've categorised as advanced AI, it's really where a lot of customers are spending money...I see a strong growth potential for our advanced AI services. It's still about 3%, but I expect this to grow..," a top company executive said. Nearly all the deals booked in the September quarter have an AI element, the company management said.
HCL Tech clarified that revenue from advanced AI deals excludes contribution from classical AI, data and analytic services, and services delivered using generative AI and agentic AI.
Overall, the management said HCL Tech saw broad-based growth in the September quarter. Deals booked during the quarter, totalling INR 2.57 billion, were "well-balanced" across service lines, geographies, and verticals.
On segmental performance, the management said it was seeing an "all-round momentum," barring the manufacturing segment. "While the broader manufacturing segment is doing fine, there is continued impact due to auto sector slowdown."
The company management said it expects "good bookings" in the coming quarter as well. HCL Tech has, however, kept its constant currency revenue guidance for the ongoing financial year unchanged at 3-5%.
FRESHER HIRING
HCL Tech is on track to achieve its fresher hiring plans for the ongoing financial year, the company management said. Following the March quarter earnings disclosure, the company had said it planned to add 'significantly' higher number of freshers in FY26 compared with the previous financial year. In the September quarter, the company added 5,196 freshers to its overall headcount, which is nearly twice the number added in the year-ago quarter.
Among other developments, the management shared details about plans to change its quarterly variable pay policy to fixed salaries for all employees and roll out salary increments from October. HCL Tech's variable pay policy system has two elements–-one linked to project-level performance metrics which is distributed quarterly and the second is the annual performance bonus.
The company management said HCL Tech has merged the pay linked to project-level performance with fixed pay, so it is now paid as fixed monthly salary. "The quarterly performance-linked variable pay was largely applicable to only the junior level employees and they will be the beneficiary of this policy change. The senior level employees continue to have their annual performance bonuses and that will continue."
On possible acquisitions in the future, the management said,"...we don't have big acquisition plans, but definitely capability additions is something we look at and AI is definitely a priority area."
On Monday, shares of the company ended marginally lower on the National Stock Exchange at INR 1,494.70. HCL Tech detailed its September quarter earnings after market hours. End
US$1 = INR 88.67
Edited by Subhojit Sarkar
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