HCLTech reported a 9.7% year-on-year decline in net profit for the first quarter of FY26, posting ₹3,843 crore compared to ₹4,257 crore in Q1 FY25. The dip comes despite the company’s aggressive focus on generative AI (GenAI) as a central growth strategy.
CEO C Vijayakumar attributed the profit drop to lower employee utilisation and continued investments in GenAI capabilities, while underlining that the company’s AI offerings are “resonating well” with clients.
During the quarter, HCLTech closed nine GenAI deals, slightly down from 12 in the previous quarter, and added clients across all revenue segments. Total new bookings reached $1.8 billion, although some large deals have been deferred to Q2. Vijayakumar noted:
“Historically, our Q1 has been a soft quarter,”
“We expect stronger deal closures in the coming quarters.”
The company revised its FY26 revenue growth guidance to 3–5%, slightly lower than earlier projections, signaling a cautious yet steady outlook amid evolving client priorities.
As part of its AI-first strategy, HCLTech disclosed that it now has 127,000 employees trained in AI, including 12,000 active GenAI practitioners. Notably, it became the first Indian IT services firm to partner directly with OpenAI, strengthening its portfolio of agentic AI solutions through collaborations with Google Cloud, UiPath, and NVIDIA.
Kalyan Kumar, Chief Product Officer at HCLSoftware, emphasized the company’s pivot toward “service-as-a-software” models, suggesting a future of more intelligent, modular AI services that blend consulting, platforms, and automation.
In contrast, industry peer TCS posted a muted 1.3% YoY growth with no reported GenAI deal wins this quarter. COO Aarthi Subramanian acknowledged a shift in client expectations:
“Clients are now demanding ROI-driven AI deployments,” she said.
The quarter’s results reflect a growing disconnect between GenAI narratives and short-term financial performance across the sector. While AI dominates boardroom conversations, turning hype into revenue remains a key challenge.
Nonetheless, with expanding capabilities, a deep talent pool, and key partnerships, HCLTech appears well-positioned to convert its AI ambitions into enterprise-scale impact in the coming quarters.
