For most of 2025, Indian IT companies endlessly pitched AI across verticals, while investors waited for AI contributions to show up in revenue. In Q3 FY26, both TCS and HCLTech reported strong AI momentum.
TCS crowned its quarterly figures with $1.8 billion in annualised AI revenue, up 17.3% quarter-on-quarter in constant currency terms. HCLTech, in contrast, reported $146 million in ‘Advanced AI’ revenue for the quarter, up nearly 20% sequentially.
At first glance, TCS seems to be far ahead. However, India’s largest IT services company counts almost all of its AI-infused services, including AI embedded inside cloud, data, application, and industry projects.
Meanwhile, HCLTech has only included agentic AI, robotics, physical AI, AI factories, and large-scale data centres and product-led work as part of its ‘Advanced AI’ revenue.
The Q3 numbers show how quickly AI is now reshaping revenue, deal pipelines, and even hiring across Indian IT.
TCS Turns AI Talk Into $1.8 Bn Contribution
TCS reported Q3 revenue of ₹67,087 crore, up 2% sequentially or 0.8% in constant currency. Profit after tax, however, fell 14% year-on-year to ₹10,657 crore on account of restructuring expenses, implementation of new labour codes, and legal liabilities.
The big story was AI. TCS said its annualised AI services revenue reached $1.8 billion, up from $1.5 billion in the previous quarter, translating into billable work.
TCS chief executive K Krithivasan made it clear that AI is no longer an add-on but the core of the company’s strategy. “We remain steadfast in our ambition to become the world’s largest AI-led technology services company,” he said during the earnings call, adding that the ballooning AI revenue is a signal that TCS offers its clients AI across the entire stack.
TCS is pushing AI across almost every layer of enterprise IT. From cloud platforms and data engineering to industry-specific agents and autonomous service delivery, AI is being embedded into ongoing projects rather than sold as a separate line item.
That approach is helping TCS defend and expand large transformation deals at a time when many enterprises are cutting back on discretionary tech spend.
Its total contract value for the quarter was $9.3 billion, among the strongest in recent quarters. That suggests large enterprises are now moving from AI experiments to scaled deployments, and TCS is capturing a meaningful share of that spend.
Behind the scenes, TCS is also building long-term AI capacity through data centres and sovereign cloud projects. These investments may not drive revenue immediately, but they position the company as a full-stack AI services and infrastructure provider over the next decade.
Gartner’s senior principal analyst Biswajit Maity sees this as a structural shift. “TCS’s latest quarterly performance not only reflects robust revenue growth but also marks a strong shift towards embedding AI at the core of its business strategy. The surge in AI-driven services demonstrates how TCS is helping clients move beyond experimentation to real-world AI adoption,” he told AIM.
That shift is also changing the workforce. TCS ended the quarter with 582,163 employees, down by 11,151 sequentially. At the same time, more than 217,000 associates—or 37% of the workforce—are now equipped with advanced AI skills. The company is using fewer people but with far more specialised skills.
HCLTech’s Advanced AI Engine Kicks In
HCLTech’s Q3 numbers tell a different story. The company reported revenue of ₹33,872 crore, up 6% sequentially and 13.3% year-on-year. In dollar terms, revenue was $3.79 billion, with 4.2% constant currency growth.
The most striking number was Advanced AI revenue, which jumped to $146 million, up nearly 20% quarter-on-quarter. This figure had crossed $100 million for the first time in the previous quarter.
In one reporting cycle, HCLTech added almost $50 million of high-end AI revenue.
C Vijayakumar, HCLTech’s CEO, has been explicit about what this number represents.
“This is not just AI revenue. This is advanced AI revenue. This does not include AI embedded within our services. This is pure advanced AI services, which is about physical AI, robotics, agentic AI, all the work that we do in AI factory building, large-scale data centre professional services and software products,” he said during the earnings call.
In other words, HCLTech is only counting the most specialised and product-like AI work, while a much larger volume of AI-infused services sits inside its core digital and engineering businesses. Digital services, which include much of this AI work, grew 17.7% year-on-year and now account for 43.2% of services revenue.
HCLTech also posted strong deal momentum, with total contract value of new deal wins rising 43.5% year-on-year to $3 billion. That suggests HCLTech’s AI-heavy automation programmes and services strategy is getting traction from enterprises, small and large. In July last year, HCLTech struck a deal with OpenAI as its strategic services partner to drive enterprise AI transformation.
Gartner’s Principal Analyst Shubham Rathore said this momentum fits a broader market shift.
“What we’re seeing is that large tech firms and hyperscalers are already experiencing substantial increases in AI-related revenue, and IT service providers like HCLTech are well-positioned to drive similar growth. Gartner forecasts indicate that AI-driven revenue will become increasingly prominent in future results,” he told AIM.
Two Models, One Direction
The contrast between TCS and HCLTech is not about who is winning on AI. Rather, the difference is in how they monetise it.
TCS is embedding AI across almost every contract and counting that revenue as part of its AI business. That creates a very large headline number and reflects how deeply AI is woven into its delivery model.
HCLTech, meanwhile, is carving out a smaller but more specialised slice, focusing on agentic systems, robotics, AI factories, and productised platforms. While smaller, the figure reflects the high margin, defensible work that enterprises cannot easily replicate.
It would be interesting to see how Infosys paves its AI journey this quarter, as it refused to announce separate AI revenue in the previous quarter.
The post TCS, HCLTech are Counting Their AI Wins Surprisingly Differently appeared first on Analytics India Magazine.
