HGS Charts AI and Broadband Growth Path

• Sales Outlook: Hinduja Global Solutions expects continued revenue growth in FY26, driven by a strategic pivot towards high-margin digital and AI-enabled services. The broadband division, CelerityX, is targeted to achieve double-digit revenue contribution by the end of FY26.
• Margin Outlook: The company prioritizes margin expansion, leveraging its AI-enabled Agent X platform for operational efficiencies (e.g., 30% cost reductions). This shift to digital services is expected to enhance overall revenue quality and profitability.

Hinduja Global Solutions (HGS) is strategically repositioning itself for sustainable future growth, with a clear focus on artificial intelligence (AI) and expanding its broadband operations. This transformation aims to enhance margins and revenue quality, building on its Q1 FY26 performance. The company’s forward-looking commentary highlights a deliberate shift toward AI-enabled solutions and robust expansion in India's burgeoning broadband market.

AI-Powered Operational Transformation

Hinduja Global Solutions is strategically transforming into an "Intelligent Experiences company," with AI-enabled BPM services as its core. This shift prioritizes margin expansion, leveraging platforms like HGS Agent X. The Americas order pipeline, over 55% digital services, indicates future demand. Management stated:

"We expect revenues from this segment to decline gradually as digital and AI-enabled operations contribute more. This shift will enable us to optimize our workforce and enhance margins through increased efficiency and automation."

Agent X is delivering, with users seeing approximately 40% training optimization, 25% productivity improvements, and 30% cost reductions. HGS expects significant ROI from global deployment and workforce reskilling for an AI-driven future.

Broadband: Fueling Future Growth

Beyond AI, HGS identifies broadband as a critical growth engine via its NXTDIGITAL media businesses. India's wired and wireless home internet market is seen as a "sunrise sector," projected to reach $16.5 billion in five years. The Hinduja Group plans to extend fiber-based broadband to 6 lakh villages in three years.

HGS's CelerityX broadband division showed rapid Q1 FY26 growth, delivering over 1,000 links in 45 days. The company targets CelerityX to reach "well into double digits" of total revenue by FY26 end. This expansion, focusing on higher ARPU markets, is expected to offset digital television challenges, improving overall revenue quality.

HGS’s Q1 FY26 earnings call outlines a clear strategic vision focused on AI-driven transformation and significant expansion in the broadband sector. The company's commitment to prioritizing margin expansion, investing in digital capabilities, and targeting high-growth broadband markets positions it for sustainable profitability and continued growth in the coming quarters. This dual-pronged approach aims to enhance revenue quality and stakeholder value.