HCL Technologies

July 16 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH AND GUARDIAN SIGN NEW EXPANDED PARTNERSHIP FOR AI-POWERED MODERNIZATION ACROSS TECHNOLOGY AND OPERATIONS

Source text: ID:nCNWYzZ3Na

Further company coverage: HCLT.NS

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** Shares of Indian IT services firm HCLTech HCLT.NS fall as much as 3.2% to 1201.1 rupees; last down 1.3%

** Stock top drag on IT index .NIFTYIT which is up 0.1%

** Co on Monday maintained FY27 annual revenue guidance and beat Q1 results estimates

** Decision to maintain guidance implies a few challenges in existing business, says Nuvama ("hold", PT 1300 rupees)

** JP Morgan ("underweight") says the unchanged outlook reflected continued weakness in discretionary technology spending, pressure in telecom and manufacturing accounts, and the delayed contribution from a recently announced $1.14 billion mega deal

** YTD, stock down 26.3% vs IT index's 23.3% drop

(Reporting by Abhirami G in Bengaluru)

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HCLTech announced on July 13 that its board has approved an investment of up to ₹3,500 crore to establish AI data centers in India, marking the company's entry into the full-stack AI market. The investment will be routed through new wholly-owned subsidiaries and is intended to scale up to 50MW of capacity. The company said the move complements its existing AI data center design, DevOps, and cloud operations capabilities, creating an integrated end-to-end play. CEO C Vijayakumar stated that the convergence of AI demand, supply constraints, and digital sovereignty presents a compelling opportunity for HCLTech to emerge as a full-stack AI technology solutions provider. The first subsidiary for this purpose is yet to be incorporated, with an initial subscription of ₹15 lakh. HCLTech's consolidated revenues for the twelve months ending June 2026 stood at $14.8 billion.

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July 13 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH - APPROVED THE RECONSTITUTION OF THE NOMINATION AND REMUNERATION COMMITTEE AND STAKEHOLDERS’ RELATIONSHIP COMMITTEE

Source text: [ID:]

Further company coverage: HCLT.NS

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Updates with closing levels

By Mridula Kumar

July 10 (Reuters) - India's Tata Consultancy Services TCS.NS rose as much as 4.1% on Friday after better-than-expected quarterly revenue on strong banking demand and rising AI revenue, though analysts said the broader sector recovery was likely to remain gradual.

Shares of the country's top software services exporter trimmed some gains to close about 1% higher at 2,069 rupees, helping lift the benchmark Nifty 50 .NSEI 1.02% higher.

The IT index .NIFTYIT gained about 1.96% during the session.

Analysts said investors were looking at positive growth expectations for TCS in the coming quarters, led by AI revenue, with multiple brokerages also citing strong growth in banking, financial services and insurance, high-tech and regional markets.

"The company expects AI adoption growth and transformation to pick up, and they expect better numbers," said Piyush Pandey, lead IT Analyst at Centrum Broking.

Annualized AI revenue crossed $2.6 billion, driven by faster deployments across industries, rising from $2.3 billion in the previous quarter, TCS said.

Quarterly sales rose 14% to 722.75 billion rupees ($7.58 billion), while CEO K Krithivasan signalled a second-quarter recovery in manufacturing and life sciences demand.

SUBDUED QUARTER, GRADUAL RECOVERY

While the results offered investors early signs that growth may be stabilizing in India's $315 billion IT sector, analysts said a broader recovery was likely to remain gradual as demand concerns remained after expectations of another subdued quarter.

Flattish international revenue and a 3% year-on-year fall in headcount suggested continued sluggishness, according to Citi, while Nomura analysts said macro uncertainty still weighed on the near-term outlook.

Brokerages had flagged a low growth rate for the company in fiscal 2027 due to AI-led deflation.

The earliest the net AI impact will turn accretive for the sector and company is mid- to end-fiscal 2028, HSBC said post the results, adding that TCS' quarterly earnings offered limited grounds for pessimistic investors to reassess their stance.

Rivals Infosys INFY.NS, HCLTech HCLT.NS and Wipro WIPR.NS are expected to report their quarterly earnings later in the month.

($1 = 95.3150 Indian rupees)

(Reporting by Mridula Kumar in Bengaluru; Writing by Abinaya V; Editing by Mrigank Dhaniwala and Janane Venkatraman)

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July 7 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH - HCLSOFTWARE COMPLETES ACQUISITION OF JASPERSOFT AND INTEGRATES WITH ACTIAN PORTFOLIO

Source text: [ID:]

Further company coverage: HCLT.NS

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By Haripriya Suresh and Bharath Rajeswaran

BENGALURU, July 6 (Reuters) - India's top information technology companies are expected to report another subdued quarter, as AI-driven pricing pressure, weak client spending, and global geopolitical turmoil continue to weigh on growth, nine brokerages said.

The April-to-June quarter is usually a strong one for India's $315 billion IT sector, helped by higher billing days and new project starts, but analysts expect a slow start to the fiscal year that would push back hopes of a recovery.

India's largest IT services company, Tata Consultancy Services TCS.NS, kicks off earnings on Thursday with peers Infosys INFY.NS, HCLTech HCLT.NS and Wipro WIPR.NS reporting later this month.

While India's top six IT firms are expected to report around 14% year-on-year revenue growth in rupee terms with net profit rising 12%-13%, this would largely be due to the impact of sharp rupee depreciation. Stripping out exchange rate effects, the companies are expected to post a mere 2.8% revenue growth in constant-currency terms.

Citi expects a fourth straight year of subdued growth for Indian IT firms, while JPMorgan sees revenue growth staying below 3%-4% for the "foreseeable future".

The IT sector is racing to adapt to changing customer needs as companies across the globe step up the use of AI tools and agents to cut costs and quicken software development cycles.

Software firms have slowed hiring, with TCS Chairman N Chandrasekaran saying the "day is not far" when the company would have an equal number of AI agents and employees.

Indian IT firms are in a "perfect storm," Nomura said in its earnings preview, with Middle East conflict-led uncertainty compounding AI-driven pricing pressure.

Fears that AI would disrupt the IT sector's traditional, labour-intensive business model dragged the Nifty IT index .NIFTYIT down 9.5% in the June quarter even as India's benchmark Nifty 50 .NSEI gained 6.9%.

The IT index has slumped about 28% so far in 2026, making it the worst-performing major sector in India.

The impact of AI-led disruption and weakness in client spending will be broad-based, according to PL Capital, with effects visible in the consumer, hi-tech, and telecom verticals.

"Slower decision-making and elongated sales cycle are leading to delays in revenue conversion and execution," the brokerage said in a note.

Annual revenue forecasts will be a key focus for investors. Brokerages say Infosys and HCLTech could narrow or trim the upper end of their forecasts.

Potentially higher interest rates in the U.S., which makes up about 60% of Indian IT firms' revenue, also loom.

(Reporting by Haripriya Suresh and Bharath Rajeswaran in Bengaluru; Editing by Mrigank Dhaniwala)

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Adds share moves in paragraph 2, background in penultimate bullet

BENGALURU, July 3 (Reuters) - India's HCLTech HCLT.NS has won a $1.14 billion deal with a major European firm, the software services exporter said on Friday.

The announcement pushed HCLTech's shares up by as much as 6.3%, boosting gains on the Nifty IT index, which was up 2.7%.

Here are some details:

• The deal will help HCLTech establish an AI-driven operating model to transform and manage the client's global digital workplace and enterprise networks, the company said.

• The deal will last for five-and-a-half years and is extendable by another five years, it added, without providing further details about the European firm.

• This is entirely new business for the company, HCLTech said, and not from an existing client or a deal renewal.

• This is the largest deal HCLTech has announced since winning a $2.1 billion deal with Verizon in August 2023.

• HCLTech, which will report its results for the first quarter of fiscal 2027 on July 13, has forecast revenue growth of 1%-4% for the year.

(Reporting by Haripriya Suresh in Bengaluru; Editing by Janane Venkatraman and Rashmi Aich)

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June 25 (Reuters) - Magnum Ice Cream Company MICCT.AS:

• HAS ENTERED INTO LONG-TERM PARTNERSHIPS WITH A GROUP OF SIX TECHNOLOGY PROVIDERS

• PLANNED SUNSET OF KEY TRANSITIONAL SERVICES AGREEMENTS (TSAS) WITH UNILEVER

Source text

Further company coverage: MICCT.AS

(Gdansk Newsroom)

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June 24 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH - HCLTECH SELECTED AS STRATEGIC PARTNER BY NESTE

• HCLTECH - HCLTECH PARTNERS WITH NESTE FOR LONG-TERM AI-LED EFFICIENCY TRANSFORMATION

Source text: ID:nBSE749BXM

Further company coverage: HCLT.NS

(([email protected];))

Recasts story with analyst commentary, details and background

BENGALURU, June 19 (Reuters) - India's Nifty IT index .NIFTYIT fell to a three-year low on Friday after bellwether Accenture ACN.N forecast quarterly ​sales below Wall Street view, cut its annual revenue outlook and reported softer bookings in its managed services business.

Shares of Indian IT companies, including TCS TCS.NS, Infosys INFY.NS, and HCLTech HCLT.NS fell 4% to 8% after Accenture flagged deal delays and a $400 million hit to its Middle East business from the Iran conflict.

India's $315 billion IT sector faces concerns that AI could disrupt its labour-intensive model, while geopolitical and economic ​uncertainty weighs on demand as ​clients defer non-essential tech spending.

Analysts see a negative read-through for Indian IT, with Morgan Stanley saying investors had already priced in a weak start to fiscal 2027 but expect an improvement in the September quarter.

"However, with this commentary from Accenture, we think hopes of any meaningful improvement in growth in 2Q could start fading away," the note said.

Indian IT firms have limited direct exposure to the Middle East, said Pritesh Thakkar, equity analyst at PL Capital, but face indirect risks from delay in deal closures, slower project ramp-ups and prolonged decision cycles.

Accenture's forecast follows hawkish U.S. Federal Reserve commentary that has fuelled expectations of a September rate hike. Higher rates could dampen appetite for emerging markets and weigh on overseas spending, a risk for Indian IT firms with significant U.S. exposure.

Mayuresh Joshi, head of equity research at investment advisory firm William O'Neil & Co, told Reuters that the market is looking for growth, which is "clearly missing", even though existing order books support current revenues.

"In terms of what these hyperscalers and platform companies are doing and implementing across enterprise value chains, they'll (Indian IT companies) have to get their act together very fast, both in terms of organic and inorganic."

India's IT stocks have slid about 29% so far this year, making them the worst-performing sector, versus an 8.3% drop in the benchmark Nifty 50 .NSEI.

(Reporting by Haripriya Suresh in Bengaluru; Editing by Sherry Jacob-Phillips)

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June 18 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH - HCLTECH LAUNCHES AI INNOVATION ZONE IN CHENNAI WITH INTEL-POWERED ENTERPRISE SOLUTIONS

Source text: [ID:]

Further company coverage: HCLT.NS

(([email protected];))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Ujjaini Dutta

BENGALURU, June 17 (Reuters Breakingviews) - HCLTech’s HCLT.NS decision to lead a fundraising round for India’s sovereign AI posterchild is both timely and shrewd. The $32 billion IT services firm's 10% stake in Sarvam, valuing the startup at $1.5 billion, is small enough to limit any risk yet showy enough to deflect mounting criticism that the world's back office is underinvesting as AI eats away at its revenue.

To be sure, Sarvam, founded by Vivek Raghavan and Pratyush Kumar, is not a neat fit for its newest big backer. The barely three-year-old startup's large language model is optimised for Indic languages but HCL's client base is largely outside the country, mostly in the United States and Europe: India accounted for just 3% of HCLTech's annual sales in the year to the end of March 2026.

And while the IT industry's decades-long success is often attributed to New Delhi staying out of the way, Sarvam is at the heart of the government's IndiaAI Mission. Through that initiative, the startup has secured financial and compute support, including subsidised access to Nvidia's NVDA.O graphics processing chips.

Of course, taking a stake in India's sovereign AI champion could unlock more domestic deals for the C Vijayakumar-led company with Indian enterprises. And it might also get early access to Sarvam's latest tech, as Microsoft MSFT.O did through its investment in OpenAI, though the company run by Satya Nadella also bagged a huge customer for its Azure cloud business.

The political returns for HCL at least appear more certain. Washington's order for Anthropic to suspend access for non-U.S. residents to its Fable 5 and Mythos 5 models will only deepen the desire of governments around the world to find their own sovereign AI solutions across compute infrastructure, AI models and user-facing AI software. That will require oodles of capital.

HCL's rivals such as Wipro WIPR.NS and Infosys INFY.NS are attempting to counter AI deflation on their revenues in other ways. Tata Consultancy Services TCS.NS, for example, is investing in a data centre. Backing Sarvam is, for now, less expensive and probably more politically savvy. They may be tempted to pile in too.

Follow Ujjaini Dutta on LinkedIn and X.

CONTEXT NEWS

HCLTech will acquire a 10.5% stake in Sarvam AI for ‌14.27 billion rupees ($150.7 million) in cash, the Indian IT services company said in a stock exchange filing on June 15. HCL co-led the fundraising round with Bessemer Venture Partners. It also included existing investors Khosla Ventures and Peak XV Partners.

The investment will allow the Indian IT services company to develop specific language models and AI solutions for its global client base and accelerate the development of sovereign AI solutions for governments and regulated industries, HCLTech said.

Sarvam was valued at $1.5 billion in the round, which raised $234 million in its first close out of a targeted $300 million. The AI startup is backed by India's government AI Mission.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on DUTTA/[email protected]))

June 15 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH - TO INVEST 14.27 BILLION RUPEES IN SARVAM AI

• HCLTECH - ACQUISITION EXPECTED TO COMPLETE WITHIN 2 WEEKS OF SIGNING

• HCLTECH - HCLTECH TO BUY 10.46% STAKE IN SARVAM AI

Source text: ID:nNSEbVpydy

Further company coverage: HCLT.NS

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June 9 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH - LAUNCHES CYBERSECURITY FUSION CENTER IN MISSISSAUGA, ONTARIO

Source text: ID:nBSE4LvvH6

Further company coverage: HCLT.NS

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June 8 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH - HCLTECH LAUNCHES AI INNOVATION ZONE WITH GOOGLE CLOUD

Source text: ID:nBSE6tK6LD

Further company coverage: HCLT.NS

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May 25 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH - ANNOUNCES EXPANDED COLLABORATION WITH PEGASYSTEMS TO ACCELERATE ENTERPRISE MODERNIZATION

• HCLTECH - COLLABORATION ENABLES TRANSFORMATION OF LEGACY SYSTEMS INTO AI-POWERED APPLICATIONS

Source text: ID:nBSE6rD8Jv

Further company coverage: HCLT.NS

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May 14 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH COLLABORATES WITH RED HAT

• COLLABORATES WITH RED HAT TO DELIVER ENTERPRISE-GRADE AI INFRASTRUCTURE SOLUTIONS

Further company coverage: HCLT.NS

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Adds details on sector paragraph 2 onwards

May 12 (Reuters) - India's IT shares fell to a three-year low on Tuesday as investor jitters around the threat posed by artificial intelligence to flagship IT firms flared up again, after OpenAI announced a new AI venture.

The Nifty IT index .NIFTYIT fell 3.6% to its lowest since May 2023, with Tata Consultancy Services TCS.NS, Infosys INFY.NS, HCL Technologies HCLT.NS and Wipro WIPR.NS falling between 2.5% and 4%.

Analysts at HSBC said in a Tuesday note that India's top-tier IT firms largely failed to meet street expectations for earnings in March quarter as well as in their outlooks for the new financial year, adding that strong spending globally on AI could be "crowding out" demand for traditional IT services.

HSBC's warning comes a day after OpenAI said it is launching a new company backed by more than $4 billion, embedding engineers into organizations to identify where AI can make the most impact. It's the latest challenge to Indian IT firms' business model from a major AI company targeting enterprise clients.

Indian IT stocks are unlikely to attract positive investor interest unless global AI activity, cloud capex growth and cloud revenue momentum slow, HSBC said.

Indian IT companies derive a significant share of their revenue from North America and are considered sensitive to U.S. economic uncertainty and corporate technology spending trends.

The industry has been under pressure for much of 2026, starting with a February rout after the roll-out of Anthropic's Claude Code and on fears rapid advances in generative AI would disrupt demand for traditional IT and professional services.

India's IT stocks have slid 25.4% so far this year, making them India's worst-performing sector, compared with a 9.7% drop in the benchmark Nifty 50 .NSEI.

March quarter results have done little to soothe investor worries. Dollar revenue at industry bellwether Tata Consultancy Services TCS.NS shrank 0.5% year-on-year to $30 billion for the year ended March - the first decline since the company's 2004 IPO.

Industry peers have flagged challenges of meeting targets with limited visibility on demand: HCL Tech's CEO C Vijayakumar said in the company's post-earnings investor call it took "25%-30% more effort to convert and get to the same number" in terms of total contract value.

The broader Indian market remained under pressure on Tuesday, with the rupee sliding to a record low on elevated crude oil prices with talks to end the U.S.-Israeli war with Iran finding no success.

(Reporting by Chandini Monnappa, Surbhi Misra and Pranav Kashyap in Bengaluru; Editing by Ronojoy Mazumdar)

(([email protected] | X: https://twitter.com/SurbhiMisra_ |;))

May 5 (Reuters) - CrowdStrike Holdings Inc CRWD.O:

• CROWDSTRIKE EXPANDS PROJECT QUILTWORKS, THE CYBERSECURITY COALITION FOR SECURING FRONTIER AI RISK

• CROWDSTRIKE - ARMADIN, COGNIZANT, HCLTECH, INFOSYS, KPMG, NTT DATA, TCS, WIPRO JOIN QUILTWORKS COALITION

• CROWDSTRIKE - INTEGRATES ANTHROPIC OPUS 4.7 AI INTO FALCON PLATFORM

Source text: ID:nBw1WDjhXa

Further company coverage: CRWD.O

(([email protected];))

April 30 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH- EXPANDS PARTNERSHIP WITH METLIFE STADIUM, NEW YORK JETS AND NEW YORK GIANTS AS AN OFFICIAL AI PARTNER

Source text: ID:nnAZN4STRI3

Further company coverage: HCLT.NS

(([email protected];))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Ujjaini Dutta

BENGALURU, April 24 (Reuters Breakingviews) - "AI deflation" is the new popular shorthand for an uncomfortable truth: getting paid less for doing the same amount of work. Coding tools such as those made by Anthropic's Claude are eroding pricing power of India's top IT services companies far faster than expected. For the $315 billion industry, it heralds a reset toward outcomes rather than hours-based billing.

HCL Technologies HCLT.NS on Tuesday cut its revenue guidance in constant currency terms to 1%-4% for the year to March 2027, after missing its 4%-4.5% target. Its shares fell 11% the next day, wiping out $4.5 billion in market value. The plummeting growth is a far cry from the expectation that firms would unlock more work in the short-term as clients modernise legacy code and clean up data for AI infrastructure, even if it comes at a lower cost.

Indeed, deal wins and toplines show little sign of that support. U.S. dollar revenue at the $97 billion industry leader Tata Consultancy Services TCS.NS shrank 0.5% year-on-year to $30 billion for the year ended March 2026 - its first decline since the company's initial public offering in 2004. Wipro's WIPR.NS annual IT services segment revenue contracted 0.3% as well.

It is getting harder to secure contracts too: HCLTech CEO C Vijayakumar admitted in the company's post-earnings investor call that the total contract value of deals in the quarter ended March remained largely flat but it took "25%-30% more effort to convert and get to the same number." There is also margin compression: HCLTech's net profit margin stood at 12.8% in the year to March, compared to 14.9% in the previous year.

So what happens when the models keep improving and more services fall under generative AI capabilities? Anthropic's latest model, Mythos, is deemed so powerful at finding software vulnerabilities that the company is, for now, holding back releasing it to the wider public.

It points to a heavy remodelling how Indian IT functions. Charging by hour is a dead end. One option is to guarantee outcomes and agree remuneration by way of a share of revenue or cost-savings achieved by a client. Some firms, including HCLTech, already do a little bit of this but the risks are harder to manage. Revenue and earnings could become much more volatile.

Shares of Tata Consultancy -- one of India's most important white-collar employers -- are down nearly 21% since Anthropic's coding tools were released in early 2025. The country's IT sector has lived through many technology transitions, but debugging its model in the AI era may prove harder than usual.

Follow Ujjaini Dutta on LinkedIn and X.

CONTEXT NEWS

Shares of HCLTech fell nearly 11% on April 22 after the Indian IT services firm on the prior day slashed its full year revenue guidance to 1%-4% year-on-year growth in constant currency terms for the year to March 2027, down from 4%-4.5% guided for the previous financial year.

"The business environment remains highly fluid, ​making it difficult to form a definitive view of how the ​next 12 ⁠months will unfold," said CEO C Vijayakumar in a post-earnings call.

Wipro on April 16 reported IT services segment revenue of $10.5 billion, down 0.3% year-on-year. The company announced a record share buyback of up to 150 billion rupees ($1.61 billion) and said it expects June‑quarter revenue to range from a 2% sequential decline to flat growth.

Tata Consultancy Services on April 9 reported its U.S. dollar revenue fell 0.5% year-on-year to $30 billion for the year ended March 31. In constant currency terms, revenue fell 2.4%.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on DUTTA/[email protected]))

April 22 (Reuters) - HCLTech HCLT.NS fell 8% in early trade on Wednesday after it forecast fiscal 2027 revenue growth below analysts' expectations and reported a fourth-quarter earnings miss, citing restrained spending by clients of India's $315 billion IT industry.

Shares were set to fall the most since January 2025 and it was the top loser on the Nifty IT .NIFTYIT sub index.

(Reporting by Urvi Dugar in Bengaluru; Editing by Ronojoy Mazumdar)

(([email protected]; +91 9558725583;))

April 21 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH CEO: SAW REDUCTION IN DISCRETIONARY SPENDING IN TELECOM

• HCLTECH CEO: AI INTEGRAL TO NEARLY ALL DEAL CONVERSATIONS

• HCLTECH CEO: BIZ ENVIRONMENT HIGHLY FLUID, DIFFICULT TO FORM VIEW FOR NEXT 12 MONTHS

• HCLTECH CEO: SEEING 2ND ORDER EFFECT DUE TO RISING ENERGY PRICES, SUPPLY CHAIN DISRUPTIONS WEIGHING ON EUROPE GRWTH OUTLOOK

• HCLTECH CEO: NORTH AMERICA RELATIVELY RESILIENT, NO BROADBASED MACROECONOMIC CHALLENGES AT THIS STAGE

• HCLTECH CEO: UPPER END OF REVENUE FORECAST ASSUMES DISCRETIONARY SPEND IMPROVEMENT, STRONG BOOKINGS IN Q1, Q2

• HCLTECH CEO: 2 CLIENT-SPECIFIC ISSUES DUE TO CLIENT'S OWN BIZ REASONS, LEADING TO SIGNIFICANT RAMPDOWNS

• HCLTECH CEO: 2 CLIENTS-SPECIFIC CHALLENGES IN AMERICAS TO CREATE 50 BPS HEADWIND TO GROWTH IN FISCAL 2027

• HCLTECH CEO: INTEND TO REINVEST CURRENCY DEPRECIATION BENEFITS INTO STRENGTHENING AI CAPABILITIES, SALES ENGINE

• HCLTECH CEO: LOWER END OF REVENUE FORECAST ASSUMES SIMILAR SOFT DISCRETIONARY SPENDING, ASSUMES 2 SPECIFIC CLIENT REDUCTIONS MAY GET WORSE

• HCLTECH CEO: WIDE REVENUE FORECAST BAND DUE TO VOLATILITY IN MARKET

Further company coverage: HCLT.NS

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Recasts throughout; adds CEO, COO and analyst comments

By Haripriya Suresh and Sai Ishwarbharath B

BENGALURU, April 9 (Reuters) - Tata Consultancy Services TCS.NS reported better-than-expected quarterly results on Thursday and said that new artificial intelligence models and tools in the market did not hurt demand for its offerings.

The comments from India's top software-services exporter offered some relief to the $315 billion sector, which has been grappling with investor concerns that AI could disrupt its traditional, labour-intensive business model.

"FY26 was a pivotal year for enterprise AI adoption across industries. For the first time since the advent of generative AI in late 2022, the shift from experimentation to scaled AI deployment showed a marked improvement," TCS Chief Operating Officer Aarthi Subramanian said.

TCS, which also provides AI services to its clients, said its annualised AI revenue crossed $2.3 billion in the fourth quarter, driven by accelerated deployments across industries, up from $1.8 billion in the third quarter.

Some analysts were, however, not impressed with the number. "It is pretty minuscule," said Anshul Jethi, analyst at LKP Securities, comparing it to the size at which TCS is currently operating right now and its future AI plans. Others said TCS still had ground to cover on the AI front.

"TCS is not behind, but it is not yet leading. The next 12 to 24 months will depend on whether it can move from AI capability to AI-led business models that scale beyond pilots and into core client operations," said Phil Fersht, CEO of IT advisory firm HFS Research.

It is the first major Indian IT company to report fourth-quarter results. Rivals Infosys INFY.NS, Wipro WIPR.NS and HCLTech HCLT.NS are set to report later this month.

TCS reported a 9.7% rise in sales to 706.98 billion rupees ($7.63 billion), and a 12.2% jump in net profit to 137.18 billion rupees ($1.48 billion) in the quarter.

Analysts had expected sales of 694.94 billion rupees and a net profit of 136.46 billion rupees, according to data compiled by LSEG.

"Every revenue band saw a healthy addition this quarter after a gap of about two years. This speaks to the early signs of stability and growth returning to our mid-size and large accounts," TCS CEO K Krithivasan said.

Revenue from North America, which accounts for nearly half of TCS's revenue, grew 2.5% in the fourth quarter.

The company's quarterly order book stood at $12 billion, compared with $9.3 billion in the third quarter and $12.2 billion a year earlier.

($1 = 92.6575 Indian rupees)

(Reporting by Haripriya Suresh and Sai Ishwarbharath B in Bengaluru; Editing by Nivedita Bhattacharjee, Dhanya Skariachan and Shinjini Ganguli)

(([email protected]))

By Haripriya Suresh and Bharath Rajeswaran

BENGALURU, April 6 (Reuters) - Top Indian information technology firms are set to report another lacklustre quarter, with revenue and profit seen rising around 10% year-on-year largely on a weaker rupee rather than underlying growth, seven brokerages said.

Uncertainties due to wars, weak discretionary spending and concerns around artificial intelligence will keep weighing on client budgets, making the revenue forecast for the next fiscal year a key focus for investors, they added.

Tata Consultancy Services TCS.NS, Infosys INFY.NS, HCLTech HCLT.NS and other software services exporters are due to report fourth quarter results starting April 9.

"We expect limited deal win surprises, patchy ex-BFSI growth and slow start to (the first half of 2027) on macro/gen AI uncertainty," Ambit Capital analysts said in a preview note.

The Indian rupee fell 4% against the U.S. dollar during the March quarter, and slid to record low levels.

Software services companies typically benefit as they bill in foreign currencies while incurring most costs in rupees, inflating profits when dollar revenues are converted.

The $315 billion sector, employing about 5.9 million people, last reported double-digit revenue growth in the March 2023 quarter. Since then, demand has softened as clients cut discretionary spending, deal cycles lengthened, and spending shifted towards cost optimisation and AI-led projects.

Infosys and HCLTech are likely to provide annual revenue forecasts of a rise between 2%-4% and 4%-6% respectively for the fiscal year 2027, the brokerages said.

Revenue for the top six firms -- TCS, Infosys, HCLTech, Wipro WIPR.NS, Tech Mahindra TEML.NS, and LTM LTIM.NS -- is expected to grow about 10.9% year-on-year in the March quarter, with net profit rising 10.3%.

On a constant currency basis, or stripping out exchange-rate effects, the top four IT firms are more likely to see revenue rise only 1.8% for the year, Ambit said.

Analysts at Yes Securities said performance was likely to be uneven, with relative resilience in banking and financial services, while retail, healthcare, and hi-tech segments could face pressure due to higher exposure to discretionary spending.

"Our recent interactions suggest that overall client budgets have not increased materially and discretionary spending remains at bay," analysts at Jefferies said in a preview note.

However, even a modest revenue forecast could support stock prices, HSBC analysts said, noting valuations currently reflect only low-single-digit growth.

While the fears around the impact due to AI are "difficult to validate or falsify, the burden of proof now sits with IT companies. Re-rating, thus, depends on proof of surviving and thriving," said analysts at Motilal Oswal.

Shares of IT companies .NIFTYIT are down 20% so far this year, on investor worries that advanced AI tools launched by Anthropic and Palantir could disrupt IT's traditional business models and cannibalise business. The Nifty 50 .NSEI is down 13%.

(Reporting by Haripriya Suresh and Bharath Rajeswaran in Bengaluru; Editing by Nivedita Bhattacharjee)

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March 31 (Reuters) - HCL Technologies Ltd HCLT.NS:

• HCLTECH - HCLTECH AND CROWDSTRIKE EXPAND STRATEGIC PARTNERSHIP WITH LAUNCH OF CTEM SERVICES

Source text: ID:nBSE2lKwLH

Further company coverage: HCLT.NS

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