How HCLTech defied the gravity of India’s four-year IT slump
As the broader IT sector grapples with the post-pandemic hangover and the growing threat of automation, Noida-based HCLTech has posted a return of 29% since the beginning of 2022. This performance is in stark contrast to the rest of the sector’s heavyweights, where billions of dollars of market value have evaporated as growth visibility diminishes.
Data compiled by Bloomberg It shows HCLTech shares increased by 28.86% between January 1, 2022 and January 16, 2026. The remaining members of the Big Five also fell during the same period: Tata Consultancy Services Ltd (TCS) fell 14.2%, Infosys Ltd fell 11% and Tech Mahindra Ltd fell 6.7%, while Wipro Ltd fared the worst, falling more than 25%.
This disparity highlights the changing hierarchy in India’s $283 billion IT services export machine. HCLTech, the nation’s third-largest software services provider, has outperformed its peers in two of the last four years. It closed FY25 with $13.84 billion in revenue, up 4.3% annually, following 5.4% growth in 2024.
“We have delivered the highest growth among large companies in the last three years and will probably deliver the highest growth for the fourth year in a row,” HCLTech Chief Executive Officer (CEO) C. Vijayakumar said in an interview last week. “While growth is in the mid-single digits, it is certainly much higher than some of our peer group.” The company is guiding full-year growth of 4% to 4.5% in constant currency terms for the current financial year, maintaining stable operating margins despite a “constrained” global spending environment.
A critical factor in HCLTech’s resilience was its proactive stance on Generative AI. In October, it became the first of the Big Five to disclose specific revenue from AI, reporting over $246 million from advanced projects including “agent AI,” “AI factories” and physical AI.
“We have been much more proactive about the impact of AI and recognized that it will be a deflation in some services,” said Vijayakumar. “We’re focused on what we can do to solve this problem… which of course pleases our investors.”
Analysts at Motilal Oswal described HCLTech’s business as “all-weather”, noting the company’s ability to outperform in an environment of macroeconomic uncertainty and high interest rates in key markets such as the US and Europe.
For the rest of the industry, the last four years have been a period of zero to negative returns. The euphoria of the pandemic period, when the push towards digitalization fueled double-digit growth, has given way to concerns about slowing deal pipelines and possible tariff-related disruptions in Western markets.
“Investors sold IT stocks because there was no growth visibility and AI-driven uncertainty,” said Amit Chandra, vice president, HDFC Securities. he said. “People didn’t know what the impact would be.”
The struggle is most evident in Wipro. The Bengaluru-based firm has finished two of the last four years with a decline in revenues and is facing a potential third. However, Wipro posted a 1:1 premium in October 2024. Management, of course, expects fourth-quarter revenue to be in the range of $2.64 billion to $2.69 billion.
The performance gap also reflects a tale of two management styles. Vijayakumar, who took over in 2016, provides a sense of continuity that eludes his rivals. In comparison, Wipro has seen three CEOs in the same period, with current chairman Srinivas Pallia taking over in April 2024.
“The weak outlook and cautious demand commentary (from Wipro) contrasts with the optimism in large-cap peers’ commentary on AI-led discretionary demand growth,” ICICI Securities analysts said in a January 17 report.
HCL Tech’s peers have relied heavily on dividends, buybacks and bonuses to maintain investor interest. In the last four years, TCS, Infosys, HCLTech, Wipro and Tech Mahindra are back ₹1.5 trillion, ₹69,000 crore, ₹51,000 crore, ₹30,000 crore and ₹16,000 crore respectively to shareholders.
Market watchers are now betting on a sector-wide recovery starting this year. Analysts at Axis Capital suggest that calendar year 2026 could mark a definitive turnaround, ending a string of disappointments. “The combination of growth recovery and currency headwinds should support margins and earnings growth,” Axis Capital analysts Manik Taneja and Rohit Thorat wrote. They expect “Tier 1 technologies” to finally catch up with the “speed of change” excitement that has so far only benefited HCLTech. But for now, HCLTech remains the only player to successfully translate this promise into share price growth.
“India’s IT services sector is positioned for a growth recovery to begin in 2026 after a weak performance phase from 2022 to 2025. The upcoming revival is expected to be fueled by AI services emerging as a key growth engine, as reflected in the growing traction of AI-led deals,” HDFC Securities analysts Amit Chandra, Vinesh Vala and Maitreyee Vaishampayan said in a 2020 note. December 8, 2025.
