HCL Technologies Ltd posted quarterly results that topped analyst forecasts, with growth in artificial intelligence revenue helping to offset a broader slowdown in conventional technology services that left the company's September-quarter expansion at its weakest pace in three years.

Quarterly revenue at the IT services provider, ranked third in India by size, reached $3.72 billion, reflecting a 2% gain over the preceding three-month period and a 2.2% increase against the same stretch a year earlier, even as client spending across the sector remained subdued. A Bloomberg survey drawing on projections from 34 analysts had placed HCL Tech's anticipated quarterly revenue at $3.68 billion.

Telecom and media firms drove just over half of all new revenue growth, even though that sector accounts for roughly a tenth of the overall business portfolio. The Noida-headquartered firm had laid out its infrastructure ambitions last July, announcing plans to invest $365 million in constructing and operating data centres with capacity reaching 50MW.

The company had also secured a 10% ownership position in Sarvam AI, valued at roughly $150 million, in the month prior — a transaction that placed it among IT services firms as the first in India to take an equity stake in an artificial intelligence company. Those strategic investments are positioned to absorb the drag on its legacy IT business while opening a path toward revenue tied to artificial intelligence, within a year when overall growth is forecast to remain subdued.

Fresh order intake at HCL Tech reached $3.3 billion across the quarter, lifting the combined total for the opening two periods of the financial year to $5.67 billion — a figure that company executives described as the highest first-half tally the firm had recorded. Executives flagged a cautious outlook on the demand environment, with one noting that order activity picked up toward the close of the quarter.

Speaking at a post-earnings press conference, chief executive C Vijayakumar noted that client demand is currently gravitating toward artificial intelligence, data, and operating model transformation in areas where the business case for innovation, efficiency, and resilience holds up, adding that the company has built propositions capable of addressing those needs.

Tata Consultancy Services Ltd offered a broadly similar picture, noting that client appetite for discretionary spending had come under pressure while overall demand conditions held steady. Revenue at TCS came in at $7.64 billion for the most recent quarter, a 0.2% gain over the period before it.

Having initially guided investors toward a range of 1–4% for FY27, HCL Tech has since narrowed and lifted its outlook, placing constant-currency revenue growth somewhere between 2.5% and 4%. Executives pointed to ongoing pricing pressure tied to AI adoption, while noting that the full extent of that pressure — both what has already taken hold and what may still materialise — remains difficult to quantify.

One source noted that the economy appears to be entering the opening stages of a deflationary period. Vijayakumar noted that deflation had not materialised through the opening stages of the period in question. Accenture, a consultancy operating at the top of the global IT services market, has taken the position that deflationary pressures have become foreseeable.

HCLTech posted a 28% quarter-on-quarter rise in AI-related revenue to $219 million, alongside a net profit of $538 million — a 10.25% increase over the same period. An analyst note observed that income from the company's five largest clients had steadied following two consecutive quarters of contraction, pointing to an easing of budget constraints among its top-tier accounts.

Broader momentum across the wider client base would need to take hold before any meaningful lift in organic growth becomes achievable, a research analyst at Mirae Asset Sharekhan noted, adding that incremental contributions from large accounts appear to be plateauing rather than picking back up.

For the opening half of its fiscal year, HCL Tech posted total revenue of $7.37 billion, a figure that came in 1.1% above what the company recorded across the same stretch twelve months earlier. An operating margin forecast in the 17.5–18.5% band, first put forward in April, remained unchanged. Operating margins at the firm reached 18.2% by the close of last quarter, a gain of 130 basis points over the three months prior.

Management projected that data centre spending would start generating returns in the latter part of FY28, while a separate disclosure pointed to contracts won through Sarvam AI, with a portion of that work directed at public-sector clients. A net gain of 6,450 workers brought the organisation's total headcount to 230,339 by the close of the first half of the fiscal year.