HCL Technologies, a leading IT services firm, kicked off FY26 on a high note, unveiling an impressive Q1 financial performance. The company reported a revenue of ₹30,349 crore, marking an 8.2% year-on-year increase. However, the operating margin was slightly affected, standing at 16.3%, due to increased investments in Generative Artificial Intelligence (GenAI) and lower utilization.
The company’s management team emphasized that the robust performance was largely driven by the growing client demand for AI capabilities, particularly in the software and IT development services. This article explores HCLTech’s successful Q1FY26, the strategic investments that have fuelled its growth, and the company’s future plans.
Surge in Demand for AI-driven Services
HCLTech’s digital business reported several large-scale deals, primarily attributed to the client AI proposition and platform capabilities. Key offerings such as AI Force, AI Foundry, and AI Labs have played a pivotal role in meeting the escalating demands of clients.
In June, HCLTech took a significant step towards bolstering its AI proposition by announcing a multi-year partnership with OpenAI. The collaboration aims to integrate OpenAI’s models into HCLTech’s AI platforms and services to support the use of GenAI in enterprise settings, further enhancing their service portfolio.
Embracing Agentic AI for Operational Efficiency
HCLTech’s strategy extends beyond GenAI. The spokesperson highlighted the company’s increasing focus on agentic AI for improving operational efficiency and application modernisation programs. As a part of this strategy, the company is investing in an AI-driven data lifecycle management platform.
Restructuring for the AI Era
Besides its focus on AI, HCLTech’s management also discussed an ongoing restructuring program. This includes optimizing underutilized facilities, especially those outside India, and managing talent resources more effectively. The team plans to execute the restructuring program throughout the fiscal year, thus providing structural agility to address market demand in the AI era.
Vijayakumar, a key figure in HCLTech, said, ‘We plan to execute a restructuring program on both the people and non-people side during the rest of the fiscal year. Doing this will provide structural agility to address market demand in the AI era.’
Conclusion
The surge in demand for AI capabilities in the IT sector is undeniable, and HCLTech is strategically positioned to capitalize on this trend. Its remarkable Q1FY26 performance, backed by strategic investments in GenAI and agentic AI, is a testament to its forward-thinking approach. As HCLTech continues to adapt and restructure for the AI era, it holds promise for an exciting journey in the ensuing fiscal year. Stay tuned for more updates on HCLTech’s transformation journey in the AI-driven world.
Originally published on https://www.techcircle.in/2025/07/14/ai-proposition-platform-capabilities-drive-client-demand-for-hcltech-in-q1fy26
