Throughout last year, Indian IT companies have struggled as clients held back discretionary spending, preferring cost-oriented deals over growth-oriented ones.
High macro indicators such as potential rate cuts by the U.S. Federal Reserve will not affect sentiment overnight and may take a few quarters to reflect in demand, HCLTech's CEO C. Vijayakumar said in a post-earnings call.
The company had also cut its revenue forecast for fiscal year 2024 - which analysts have described as a "washout" for Indian IT companies - to 5% to 5.5%, from 5% to 6% a year ago.
The results came a day after the top executive at market leader Tata Consultancy Services (TCS.NS) said it was hard to predict a recovery in demand for IT services in the next two quarters.
HCLTech's total contract value for new deals during the quarter fell nearly 18%, to $1.93 billion from a year earlier.
Still, the conversion of a few older deals into revenue helped some IT majors, including TCS and HCLTech, in the third quarter.
HCLTech's third-quarter net profit rose 6.2%, to 43.50 billion rupees ($524.80 million) from a year earlier, surpassing analysts' average estimate of 41.51 billion rupees, per LSEG data.
Revenue rose 6.5% to 284.46 billion rupees, beating Street estimates of 281.26 billion rupees.
The Noida-based company benefited from a $2.1-billion technology deal with U.S. telecom company Verizon (VZ.N) that started generating revenue in November.
"The business pipeline shows healthy signs and though there are some setbacks, we are optimistic for the growth of Indian IT vendors," said Biswajit Maity, senior principal analyst at Gartner.
