Infosys

Sept 16 (Reuters) - Infosys Limited INFY.NS:

• INFOSYS ANNOUNCES EXPANSION OF INDORE DEVELOPMENT CENTER

Further company coverage: INFY.NS

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** Indian IT stocks .NIFTYIT rise as much as 5.2% vs 0.23% fall in Nifty 50 .NSEI

** Sub-index heads for best day since July 2

** Mirrors gains in global software shares after AI executives - Anthropic CEO Dario Amodei, xAI chief Elon Musk, OpenAI CEO Sam Altman - back calls for slowdown of tech's development in face of risks

** HCLTech HCLT.NS climbs nearly 6% after eight straight sessions of declines, while Infosys INFY.NS and TCS TCS.NS rise about 5% each

** India's IT industry is seen as especially vulnerable to AI because of its reliance on billable hours

** YTD, Nifty IT down 21% vs .NSEI's nearly 10% decline

(Reporting by Urvi Dugar in Bengaluru)

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Sept 3 (Reuters) - Infosys Limited INFY.NS:

• INFOSYS - GUIDEVISION UK, IN-TECH AUTOMOTIVE ENGINEERING BEIJING CO VOLUNTARILY LIQUIDATED

Source text: ID:nNSE1vjG0T

Further company coverage: INFY.NS

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By Sai Ishwarbharath B, Abhirami G and Haripriya Suresh

BENGALURU, August 21 (Reuters) - Artificial intelligence promised to disrupt India's IT industry and it is delivering.

Outsourcing giants like Tata Consultancy Services TCS.NS, Infosys INFY.NS, Wipro WIPR.NS, HCLTech HCLT.NS and Cognizant CTSH.O are rejigging business models, increasingly tying fees to performance outcomes instead of hours worked, as clients demand steep price cuts and more productivity.

Industry executives also say they are losing some work entirely as customers use AI to shift tasks in-house, while all the uncertainty that the new technology has brought is resulting in shorter contracts.

And where once the big IT companies won contracts because they could point to their huge employee base, that has become less and less of an advantage as AI automates more and more tasks — levelling the playing field for smaller rivals which have jumped at opportunities to snatch business.

"It's a desperate market for the service providers. The odds are very much in favour of clients," said Jimit Arora, CEO of research and advisory firm Everest Group.

Software companies globally have been battered by worries that AI will render key parts of their business obsolete, but India's IT industry — worth $315 billion in annual revenue — is the most obvious victim with its traditional reliance on billable hours.

The Nifty IT index .NIFTYIT has tumbled by a fifth this year, with its 10 constituents losing a combined $73 billion in market value.

CONTRACTS SHIFT TO MEASURABLE OUTCOMES

These days, pricing for contracts is more likely to be dictated by performance outcomes.

TCS Chief Executive K Krithivasan told Reuters that about 80% of the company's contracts within its finance, human resources and other business services segment are now based on outcome performance measures.

That number represents a doubling since AI went mainstream in late 2023, said a person with knowledge of the matter, who was not authorised to speak to media and declined to be identified. TCS did not respond to a request for comment.

Other examples in the industry include an AI and automation deal Cognizant CTSH.O struck with Daimler Truck DTGGe.DE in February. It stipulated AI-related cost savings would be split between the vendor and the client, according to people familiar with the terms.

"With AI, the fundamentals are shifting," Cognizant said in a statement to Reuters, though it declined to comment on specific contracts. "Clients now expect more value and measurable outcomes, and we are re-forging our model for that reality."

Daimler Truck did not respond to a request for comment.

A separate multiyear cloud management deal forged in June 2025 was structured so HCLTech will not be paid by German utility E.ON EONGn.DE for the first year, with payments from the second year tied to efficiency gains and specific business outcomes, according to two people familiar with the agreement.

E.ON declined to comment, while HCLTech did not respond to a request for comment.

CLIENTS WANT MORE BANG FOR THEIR BUCK

As AI drives productivity gains, clients have become increasingly vocal about getting more for less.

Persistent Systems PERS.NS CEO Sandeep Kalra told Reuters that the IT provider's clients were demanding the same work for 25% to 30% less while expecting faster delivery and higher productivity.

But on the plus side, AI is helping Persistent win larger deals than it would have previously.

"The demarcation of a scale player only by revenue is not necessarily a big thing today," he said.

IT executives and analysts alike say competition from mid-sized firms has become brutally fierce.

Many customers now want rapid development of pilot programmes and smaller firms are winning mandates by deploying senior leaders quickly and offering flexible pricing, says Phil Fersht, CEO and chief analyst at HFS Research.

"Many Tier 2 firms have been more agile and hungry in this phase," he said.

Both Persistent and Coforge COFO.NS, another mid-sized IT services provider, have seen revenue in dollar terms grow by double digits for at least eight quarters in a row. In April-June, revenue for Persistent surged 16%, while Coforge's sales jumped by a third.

In contrast, TCS, Infosys, Wipro and HCLTech had subdued growth of 1% to 3%.

IRRATIONAL EXUBERANCE?

As pressure from clients grows, some firms are making rash decisions, says Tech Mahindra TEML.NS CEO Mohit Joshi.

Some rivals are factoring in productivity gains of 70% to 80% over five to seven years and guaranteeing prices despite rising chip costs, Joshi told an analysts' call last month, adding that his company had chosen not to take such risks.

"Clearly, there is a ton of competition out there, and our competition at times is doing irrational things," he said.

Infosys last month also told analysts it had walked away from contracts that were no longer economically viable.

TCS's Krithivasan said that so far the company has been able to offset AI-related downward pressure on revenue with new work.

"But how fast and how much more we are able to go ahead of the (revenue) deflation will determine the growth going forward," he added.

TCS is also boosting its numbers of engineers who embed with clients to accelerate AI adoption and is hunting for AI acquisitions.

It is thus far the only Indian IT services provider to have announced mass layoffs in the AI era, implementing cuts of more than 12,000 last year. But companies have flagged that their traditional role as huge hirers of new recruits may be winding down.

The country's IT giants will no longer need large ranks of entry-level engineers, according to former Infosys CFO V. Balakrishnan.

"The pyramid model is gone. With coding agents, we no longer need basic coding," he said.

(Reporting by Sai Ishwarbharath B, Abhirami G and Haripriya Suresh in Bengaluru; Editing by Dhanya Skariachan and Edwina Gibbs)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Updates to add graphic.

By Ujjaini Dutta

BENGALURU, Aug 14 (Reuters Breakingviews) - India's $315 billion IT industry was once easy for investors to read: work was largely billed on human effort, so headcount was a straightforward indicator of revenue growth and earnings potential. That correlation is fraying as AI tools made by Anthropic, OpenAI and others mean IT companies can serve clients with fewer people and increase revenue without hiring. New measures are needed to differentiate between firms adapting fast enough and those who can't keep up.

Traditional contracts paid IT companies for hours worked and engineers deployed. That model is fading fast, especially at smaller and more agile firms. Yet the distinction is not reflected in share prices. Investors have indiscriminately dumped shares in giants led by $90 billion Tata Consultancy Services TCS.NS , Infosys INFY.NS and Wipro WIPR.NS, alongside stakes in smaller providers like Blackstone-backed BX.N Mphasis MBFL.NS. The benchmark Nifty IT index .NIFTYIT is down 17% this year.

Some companies are starting to report "AI revenue". Venu Lambu, the boss of $15 billion LTM LTIM.NS, reckons it will become the industry's defining metric but that seems unlikely. At Tata Consultancy, this newly adopted measure is poorly explained and, worse, lumpy. A more nuanced approach is probably required.

From March next year, $5 billion Mphasis,will report “key operating metrics” such as annual recurring revenue and platform attach rate. This suggests it sees a growing share of future revenue from selling software-like services. The firm already generates less than half of its topline from the traditional "Time and Materials" billable hours model. Similarly, $8.5 billion Coforge is building up a portfolio of AI-related software products and tools including 8 AI platforms, 22 AI assets and over 100 reusable AI agents, per its latest post-earnings call.

AI is not only making engineers more productive; it is also encouraging IT firms to package their expertise into reusable software platforms as clients increasing value speed of deployment. So instead of building a custom customer-service application from scratch, an outsourcer could deploy a pre-built AI platform across dozens of clients and charge subscription fees.. Attach rate would show how often clients purchase additional products or services after adopting a platform, offering a clue about future revenue growth.

This shift to a "services-as-software" model is imminent, says Sanjeev Narsipur, Managing Director and Lead of Digital, AI and Technology Services at Alvarez & Marsal. And as this line blurs globally, AI developers OpenAI and Anthropic are also moving into enterprise services. Whatever the way forward, after decades of falling back on old metrics, IT firms need to find new ways to demonstrate their worth.

Follow Ujjaini Dutta on LinkedIn and X.

CONTEXT NEWS

Blackstone-backed Mphasis sees a shift toward "recurring, platform-attached revenue” the company said on July 24 in a post-earnings call. In May, the company said it would start reporting “key operating metrics” such as annual revenue runrate, platform attach rate and net retention rate for the year ending March 2028.

(Editing by Una Galani; Production by Aditya Srivastav)

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Aug 4 (Reuters) - Infosys Ltd INFY.NS:

• INFOSYS - HDFC BANK DEPLOYS FINACLE WEALTH MANAGEMENT SOLUTION FOR DIGITAL TRANSFORMATION

• INFOSYS - DEPLOYMENT OF FINACLE WEALTH MANAGEMENT FOR HDFC BANK’S DIGITAL TRANSFORMATION

Source text: ID:nBSE6SJHv2

Further company coverage: INFY.NS

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July 26 - Infosys Ltd INFY.NS:

• INFOSYS - FRENCH LABOUR BODY SLAPS €175,000 FINE FOR VIOLATION IN WORK-TIME RECORDING SYSTEM

• INFOSYS - FINE TO HAVE NO MATERIAL IMPACT ON FINANCIALS, OPERATIONS

Further company coverage: INFY.NS

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** India's Nifty 50 .NSEI and Sensex .BSESN lose about 0.8% each on Friday, taking their weekly losses to 2.6% and 3%, on course for their worst in four months, on a spike in oil prices to $100 a barrel on escalating Middle East tensions

** IT heavyweight Infosys INFY.NS drops 2.8% after it misses quarterly revenue view, narrows its fiscal year 2027 revenue growth forecast to 1.5%-3% from 1.5%-3.5%, triggering price target cuts from at least 20 brokerages

** Airlines operator Interglobe Aviation INGL.NS dips 2% after posting a June quarter loss and forecasting flat capacity growth for the ongoing September quarter

** All 16 major sectors decline; the broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 fall 0.8% and 0.6%

** Among stocks, HDFC Bank HDBK.NS falls 0.8%, taking its weekly loss to 10% after Q1 net interest margin declines sequentially; Reuters' report of a delay in reappointment recommendation of the lender's CEO also weighs on sentiment

** HDBK set for worst week since Jan 2024

** Brokerage Motilal Oswal Financial Services MOFS.NS slips 8.3% after soft quarterly earnings

** Eternal ETEA.NS and Swiggy SWIG.NS fall after report of Flipkart's food-delivery foray

(Reporting by Bharath Rajeswaran in Bengaluru)

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Infosys Ltd on Wednesday appointed Ashiss Kumar Dash as its next chief executive, succeeding Salil Parekh who will step down on March 31, 2027 after nine years at the helm. Dash, a three-decade veteran of the company and currently global head of a business portfolio spanning twelve industry verticals, will serve as CEO designate until March 31, 2027, before taking over as managing director and CEO for a five-year term from April 1, 2027, subject to shareholder approval. The board also approved the company's first-quarter financial results, reporting a 2.4% year-on-year constant-currency revenue growth and an operating margin of 21.1%, while revising its full-year revenue growth guidance to 1.5–3.0% from 1.5–3.5% earlier. Large deal wins in the quarter came in at $3.6 billion with 61% net new business, and AI-related services rose to 8.2% of revenue.

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Infosys appointed Ashiss Kumar Dash as Chief Executive Officer Designate, effective July 23, 2026, with the intention to elevate him to Managing Director and CEO on April 1, 2027. Dash, currently global head of a multi-industry portfolio, has spent over thirty years at the company in senior roles spanning delivery, operations, and customer business. The appointment follows a recommendation from the Nomination and Remuneration Committee and will be for a five-year term, subject to shareholder approval. Dash will succeed Salil Parekh, who has led Infosys since 2018 and is credited with steering the company through a digital transformation and doubling revenue to over $20 billion.

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Infosys on Wednesday appointed Ashiss Kumar Dash as chief executive officer designate, lining up a three-decade company veteran to succeed Salil Parekh when his second term ends in March 2027. The board intends to name Dash as managing director and CEO from April 1, 2027, subject to shareholder approval. Dash currently heads a portfolio spanning multiple industry verticals and the sustainability practice. He joined Infosys more than 30 years ago and has held senior roles in client-facing business, delivery, and global operations. The Bengaluru-based company also reported a 14% year-on-year rise in June-quarter consolidated net profit to ₹7,769 crore on revenue of ₹48,211 crore. Constant-currency revenue grew 2.4%, and the management revised its full-year revenue growth forecast to 1.5–3.0%.

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July 13 (Reuters) - Infosys Ltd INFY.NS:

• MICHAEL NELSON GIBBS RETIRES AS INDEPENDENT DIRECTOR EFFECTIVE JULY 12, 2026

Source text: ID:nBSEbQ5GQZ

Further company coverage: INFY.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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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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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, July 3 (Reuters Breakingviews) - Markets aren't trusting IT outsourcers to get anything right. Shares in India's $7.5 billion Persistent Systems PERS.NS plunged after CEO Sandeep Kalra agreed to pay a 140% premium for its buyout of Germany's Nagarro NA9n.DE. But the $1.45 bln deal helps the buyer meet long-standing strategic goals at knockdown valuation.

After dropping 11% after the acquisition was announced on Saturday, Persistent's stock pared losses but remains 5% below its undisturbed price. The visceral negative reaction channels widespread industry uncertainty about whether acquisitions are a good answer to the AI revenue deflation threat facing the industry since Anthropic and peers launched coding tools.

Indian IT companies are loaded with cash but rarely strike deals, and very few transactions are regarded as successful. Even without a premium, Persistent's returns from its purchase are unlikely to cover the Indian software industry's 10% cost of capital per data from the NYU Stern School of Business, according to Breakingviews calculations.

Yet the acquisition is transformative. It will boost Persistent's presence in Europe, more than doubling the continent's share in its top line to 22%, and give it an entry into the Middle East, Turkey and Japan. As well as reducing its reliance on North America where the Trump administration is making it harder to secure visas for skilled workers that the IT industry needs, the deal will also add capabilities in serving industrial and consumer enterprises as well as governments, where Persistent has limited presence.

The sudden global investor aversion to software stocks handed Persistent an opening to meet these strategic goals at relatively attractive valuations. Nagarro's stock has fallen 46% since the beginning of 2026, twice as much as Persistent over the same period. It is paying 19 times Visible Alpha's estimates of the target's 2026 earnings, less than its own 29 times.

Given investors are anyway in the mood to punish IT companies and pushing back against attempts by others like $44 billion Infosys INFY.NS to boost buybacks, the downside of making a bold acquisition is limited.

Follow Shritama Bose on LinkedIn and X.

CONTEXT NEWS

Persistent Systems on June 27 said it would launch an offer for all outstanding shares in Munich-headquartered Nagarro Group, valuing it at $1.45 billion including debt. The offer of 81 euros ($92.12) per share represents a 140% premium to the last traded price before the deal was announced.

(Editing by Una Galani; Production by Aditya Srivastav)

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

Adds BAT

June 29 (Reuters) - Concerns are deepening among investors and economists that AI adoption will upend established industries, with job losses already emerging in sectors most exposed to automation.

Goldman Sachs economists said in February that AI was responsible for 5,000 to 10,000 monthly net job losses last year in the most exposed U.S. industries.

A survey by global outplacement firm Challenger, Gray & Christmas linked AI to 7% of total U.S. planned layoffs announced in January.

Below is a table of AI-linked global layoffs announced since October 2025 from biggest to smallest. Entries with no specified number are placed at the bottom.

(Reporting by Romolo Tosiani and Philippe Leroy Beaulieu in Gdansk, Additional reporting by Anshuman Tripathy; Editing by Matt Scuffham, Milla Nissi-Prussak, Jonathan Ananda, Devika Syamnath and Shilpi Majumdar)

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** IT services firm Infosys' U.S.-listed shares INFY.N rise 2.1% to $10.8

** Wells Fargo initiates coverage with "equal weight" rating; sets PT at $11, implying a 4.1% upside to the stock's last close

** Brokerage says INFY is "not immune from AI transition" and awaits further proof that the company is a net beneficiary of the technology

** Notes "overall demand backdrop remains complex given geopolitical uncertainty" and while INFY's large deal bookings trends are healthy, "smaller more discretionary projects remain muted"

** Avg. rating of 14 analysts is "hold;" their median PT is $14.50, according to LSEG data

** Stock has fallen 39.4% so far this year

(Reporting by Anzar Mehraj in Bengaluru)

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June 24 (Reuters) - Infosys Ltd INFY.NS:

• INFOSYS COLLABORATES WITH SENTARA TO UNLOCK AI VALUE AND SCALE ENTERPRISE AI ADOPTION IN HEALTHCARE SERVICES

Source text: ID:nCNWBlGzha

Further company coverage: INFY.NS

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June 23 (Reuters) - Infosys Ltd INFY.NS:

• INFOSYS ANNOUNCES EXPANDED COLLABORATION WITH GLOBALFOUNDRIES TO ACCELERATE AI-DRIVEN TRANSFORMATION OF IT OPERATIONS

Source text: ID:nCNW7F8Dha

Further company coverage: INFY.NS

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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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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 16 (Reuters) - Infosys Ltd INFY.NS:

• INFOSYS - COLLABORATES WITH VALMET FOR IT OPERATIONS WITH AI ACCELERATED TRANSFORMATION

Source text: ID:nnAZN4T2KHZ

Further company coverage: INFY.NS

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By Praveen Paramasivam

June 15 (Reuters) - Hyderabad-based Electronics Mart India ELEO.NS is looking to diversify away from the technology hub as concerns grow that potential AI-triggered job losses could hurt consumer spending, a top executive said.

The retailer gets about 60% of its revenue from Hyderabad, which hosts offices of global companies such as JPMorgan Chase JPM.N and Eli Lilly LLY.N, and Indian IT majors Wipro WIPR.NS and Infosys INFY.NS.

Around a fifth of its stores in Hyderabad are located in neighbourhoods where the majority of the residents are software employees.

The retailer, which sells products from brands including Sony and OnePlus, has over 220 stores across six states, mostly in the southern states of Andhra Pradesh and Telangana, and entered the National Capital Region in 2022.

By comparison, billionaire Mukesh Ambani's Reliance Digital has more than 695 outlets and Tata Group's Croma about 540 stores. Privately held Vijay Sales operates more than 170 stores, according to their websites.

Electronics Mart plans to invest about 1.2 billion rupees ($12.69 million) to open 20 stores in the current financial year, including up to seven in Kolkata, where it currently has no presence, while deepening its presence in and around New Delhi.

"If there is any disturbance in the IT industry, definitely there is going to be an impact on our business," CFO Premchand Devarakonda told Reuters.

Growing AI adoption has raised concerns about job losses in the technology sector, a key driver of consumption in cities such as Hyderabad and Bengaluru.

"We need not really worry immediately," Devarakonda said, adding the expansion was aimed at "de-risking" the retailer's dependence on any one sector.

Electronics Mart plans to add 20 to 25 stores annually over the next five years, with a focus on northern markets where fragmented retail offers scope for growth.

For the current year, the company expects revenue to rise about 15%, in line with LSEG estimates, helped in part by strong demand for air conditioners in a hotter summer.

($1 = 94.5950 Indian rupees)

(Reporting by Praveen Paramasivam in Chennai; Editing by Dhanya Skariachan and Nivedita Bhattacharjee)

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June 11 (Reuters) - Infosys Ltd INFY.NS:

• INFOSYS COLLABORATES WITH CMMI INSTITUTE TO SHAPE ENTERPRISE AI MATURITY FRAMEWORK; ACHIEVES MILESTONE RECOGNITION

Source text: ID:nPn5nfh39a

Further company coverage: INFY.NS

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