AI, GenAI, digital deals drive HCLTech revenue in Q3 FY25

HCL Technologies (HCLTech), India's third-largest IT services firm, reported a 5% rise in revenue from operations to ₹29,890 crore for Q3 FY25, up from ₹28,446 crore in Q3 FY24. Net profit increased by 5.5% to ₹4,591 crore for the quarter that ended December 31, 2024, reflecting strong financial performance amid macroeconomic challenges, led by digital and Artificial Intelligence (AI) transformation deals.

“HCLTech is well positioned as AI-led transformation creates new growth opportunities,” said Chairperson Roshni Nadar Malhotra when announcing the Q3 results. In addition to existing digital transformation projects, the company secured several AI and GenAI-led deals across sectors such as banking, financial services and insurance (BFSI), healthcare, manufacturing, telecom, logistics, and retail, among others.

The company gained momentum from government contracts, including a notable digital transformation deal with the Tasman District Council in New Zealand, integrating GenAI and automation to streamline customer processes. HCLTech also announced plans to establish a new AI/Cloud Native Lab in Singapore, set to open in 2025, alongside launching an innovation lab for SAP Business AI in Germany and partnering with Google Cloud for AI-based cybersecurity solutions.

The Noida-based company declared an interim dividend of ₹18 per equity share, including a special dividend of ₹6 to celebrate 25 years of public listing. For the full FY25, HCLTech raised its revenue growth guidance in constant currency by 100 basis points to 4.5-5%, while maintaining its EBIT margin guidance at 18-19%.

C. Vijayakumar, CEO & Managing Director, said, “HCLTech achieved solid growth with a 3.8% QoQ increase in constant currency and an EBIT of 19.5%. This growth reflects broad-based performance as clients reaffirm confidence in our Digital and AI services.” He highlighted healthy new deal bookings of $2.1 billion during the quarter, emphasising a transformative future driven by AI.

Shaji Nair, Research Analyst at Mirae Asset Sharekhan, noted healthy deal win momentum, with a new Deal TCV of $2,095 million — down 6% QoQ but up 9% YoY. He pointed out that while the performance is encouraging, monitoring discretionary spending will be crucial. The Q3 results and revised guidance suggest that HCLTech is positioned for industry-leading growth among Tier 1 IT companies in FY25.

Biswajit Maity, Senior Principal Analyst at Gartner, also observed that strong deal wins and a solid business pipeline have fuelled HCLTech's steady growth, bolstered by expertise in digital transformation. The company’s focus on both SMEs and large enterprises has diversified its revenue streams.

Looking ahead, 2025 holds promising opportunities, particularly in North America, followed by Europe and other regions. Key growth drivers include a projected 10-12% rise in IT spending in India, global IT growth of 6-8%, and Generative AI (GenAI) projects moving into production. To maintain its upward trajectory, HCLTech must enhance service delivery and innovation, aligned with evolving customer needs while focusing on GenAI, said Mait.

On January 9, India’s largest IT services firm Tata Consultancy Services (TCS) announced its Q3 FY25 results, reporting a 6% increase in consolidated revenue to ₹63,973 crore, up from ₹60,583 crore in Q3 FY24. CEO K. Krithivasan highlighted a recovery in the BFSI and consumer business sectors, alongside signs of increased discretionary spending.

HCL Technologies saw a slight rise in attrition to 13.2% for Q3, up from 12.8% last year, adding 2,134 employees, bringing its total to 220,755. In contrast, TCS reported a decline of 5,370 employees, reversing two-quarters of growth, with a total workforce of 607,354. The decline was linked to geopolitical uncertainties and currency volatility, the company said.