AI to bring a ‘painful transition’, says HCLTech CEO

As artificial intelligence (AI) raises new doubts about the future of information technology services, C. Vijayakumar, CEO of HCL Technologies Ltd, said the industry is indeed at its biggest turning point ever and is facing a painful, people-driven transition. But he pushed back against fears of widespread disruption, arguing that the initiatives would take time to be adopted and would not be as “dramatic” as made out.

“I think I would say this: this transition is different… it’s going to be painful because it really involves people,” Vijayakumar said during a fireside chat at the Nasscom Technology and Leadership Forum 2026 in Mumbai on Tuesday.

The CEO’s comments come as concerns about the importance of IT services have sent the company’s shares down more than 17% since the beginning of the year. On the other hand, the sector’s Nifty IT index has fallen by more than 20% during this period.

The company’s shares fell 6.1% on Tuesday amid new concerns from shareholders about its IT services. Much of this comes after AI specialist Anthropic’s latest blog post on February 23 suggested that AI could modernize the software that manages automated teller machines (ATMs) operated by banks. Shares of the country’s largest IT services companies fell by 2-7%, with HCL the worst hit among the top four.

Vijayakumar, one of Indian IT’s longest-serving CEOs, dismissed these concerns. “Technology is definitely becoming much more powerful, but what gets overlooked is how to actually deploy it in an organization,” he said. “There’s a big gap today between how fast technology is evolving and how it’s being used in business. I think that’s where the challenges are going to be,” Vijayakumar said in a media interaction after the fireside chat.

“This will take time; it’s not as dramatic as it’s been portrayed as being what the technology can achieve,” said Vijayakumar, who will complete a decade as the company’s CEO in October 2026.

The CEO also sought to calm the nerves of millions of engineering graduates seeking jobs in India’s top technology services companies, adding that core software engineering jobs will always be in demand.

“I think the demand for specialized skills is going to increase significantly, whether it’s data, cloud, security, AI… all of those specialized skills are going to be in much higher demand,” he said. “I also think fundamental software engineering concepts will be very, very relevant,” added Vijayakumar.

The company closed last year with $13.84 billion in revenue, up 4.3%. This makes it the fastest-growing IT services company among the country’s five largest companies over the past two years. Management expects the company to outperform its peers for the third consecutive year as companies further increase spending on non-essential technologies.

In terms of revenue, HCLTech ranks third among India’s IT service providers after Tata Consultancy Services and Infosys. Wipro and Tech Mahindra follow. TCS, Infosys, Wipro and Tech Mahindra reported annual revenues of $30.18 billion, $19.28 billion, $10.51 billion and $6.26 billion respectively. Revenues of TCS and Infosys grew by 3.8% and 3.8%, while Wipro and Tech Mahindra recorded a decline of 2.7% and 0.2%, respectively.

HCLTech also became the first of the five major IT firms to share details on revenue from GenAI when it released the figures in October last year. It reported approximately $246 million in revenue from advanced projects, including agency AI, AI factories, and physical AI, for the July-December 2025 period.

Vijayakumar’s views are similar to those of company chairman Roshni Nadar-Malhotra three days ago. The industry has embraced technological cycles in the past, he said, and “this isn’t the first time we’ve been here.”

“The industry has adapted to many technological cycles over the decades. For us, AI will be a force multiplier. This is a good thing because companies will always need software services. AI is like Lego blocks and you won’t understand it until someone tells you what to do,” Nadar-Malhotra said at a media roundtable held on the sidelines of the group’s first semiconductor project inauguration in Jewar, Uttar Pradesh.

Chips on board

Vijayakumar said that semiconductor companies and technology hardware manufacturers will benefit most from the artificial intelligence wave. “I think the value is disproportionate in terms of semiconductor companies. There’s tremendous value being captured by technology OEMs and semiconductor companies. The reason for that is that it’s driven by a constraint that really exists, and I don’t think more competitive players are going to emerge, whether it’s semiconductors or technology…” he said.

HCLTech is venturing into its hardware roots as HCL Group’s flagship parent HCL Corp plans to supply chips for a quarter of displays in India over the next two years, unlike its major rival TCS, which wants to build and maintain data centres.

Founded by billionaire Shiv Nadar, HCL Group has built its semiconductor facility under India Chip Pvt Ltd, a private joint venture with Taiwan-based global contract manufacturer Foxconn. will operate with. HCL Corp holds a 60% stake in the joint venture, while Foxconn holds the remaining 40%.

Although the semiconductor wing operates independently of HCLTech, the company is not new to chips. HCLTech was previously involved in the engineering, research and development of semiconductor chips.