HCLTech Stands Alone in India's Struggling IT Landscape
India's information technology sector has faced a tough four-year stretch, but one company has managed to defy the downward trend. HCL Technologies Ltd, based in Noida, has emerged as the sole bright spot among the country's top five IT stocks. While its peers struggled with stagnant or negative returns, HCLTech delivered an impressive 28.86% gain in share value between January 2022 and January 2026.
A Stark Contrast in Performance
The numbers tell a compelling story of divergence within India's $283 billion IT services export industry. During the same period when HCLTech shares climbed nearly 29%, other major players experienced significant declines. Tata Consultancy Services fell 14.2%, Infosys dropped 11%, and Tech Mahindra slipped 6.7%. Wipro performed the worst, plummeting more than 25% in value.
This performance gap highlights a shifting competitive landscape in Indian technology services. HCLTech, the nation's third-largest software services provider, has consistently outgrown its peers in recent years. The company closed fiscal year 2025 with $13.84 billion in revenue, representing 4.3% annual growth following a 5.4% expansion in 2024.
Leadership Stability and AI Focus Drive Success
Chief Executive Officer C. Vijayakumar explained the company's consistent performance in a recent interview. "Among the large-cap companies, we have delivered the highest growth in the last three years, and in the fourth year running, we would probably deliver the highest growth," he stated. "Even though the growth is mid-single digit, it is definitely much higher than some of our peer group."
The company maintains guidance for 4% to 4.5% growth in constant currency terms for the current fiscal year. This comes despite what Vijayakumar describes as a "constrained" global spending environment that has challenged the entire industry.
Proactive Approach to Artificial Intelligence
A critical factor in HCLTech's resilience has been its early and proactive stance on Generative AI. In October, the company became the first among India's Big Five IT firms to report specific revenue from artificial intelligence projects. The company disclosed over $246 million in revenue from advanced AI initiatives including "agentic AI," "AI factories," and physical AI implementations.
"We have been much more proactive about the impact of AI and acknowledging that it will be a deflation in some services," Vijayakumar noted. "We focused on what we can do to address it... which, of course, our investors are happy with."
Management Continuity Makes a Difference
The performance gap between HCLTech and its competitors also reflects contrasting management approaches. Vijayakumar, who took leadership in 2016, has provided consistent direction that has eluded some rivals. In comparison, Wipro has seen three different CEOs during the same period, with current head Srinivas Pallia taking over just in April 2024.
Analysts at Motilal Oswal have described HCLTech's business model as "all-weather," noting its ability to outperform despite macroeconomic uncertainty and high interest rates in key markets like the United States and Europe.
Industry-Wide Challenges Persist
For most of India's IT sector, the last four years have delivered zero to negative returns. The pandemic-era euphoria, when rapid digitization fueled double-digit growth, has given way to anxiety over slowing deal pipelines and potential tariff disruptions in Western markets.
Amit Chandra, vice-president at HDFC Securities, explained the investor sentiment shift. "Investors sold IT shares because there was no growth visibility and AI-led uncertainty," he said. "People did not know what the impact would be."
The struggle is particularly visible at Wipro, which has ended two of the last four years with declining revenue and faces a potential third consecutive year of contraction. The company did issue a 1:1 bonus in October 2024, but management expects fourth quarter revenue to range between $2.64 billion and $2.69 billion.
Shareholder Returns and Future Outlook
To maintain investor interest, HCLTech's peers have leaned heavily on dividends, buybacks, and bonuses. Over the last four years, the five major IT firms have returned substantial amounts to shareholders:
- Tata Consultancy Services: ₹1.5 trillion
- Infosys: ₹69,000 crore
- HCLTech: ₹51,000 crore
- Wipro: ₹30,000 crore
- Tech Mahindra: ₹16,000 crore
Market observers now anticipate a sector-wide recovery beginning this year. Analysts at Axis Capital suggest that calendar year 2026 could mark a definitive turning point, ending the recent streak of disappointments. "A combination of growth pickup and currency tailwinds should support margins and earnings upgrades," wrote Axis Capital analysts Manik Taneja and Rohit Thorat.
They expect "Tier-1 techs" to finally catch up to the "rate of change" excitement that has so far benefited only HCLTech. However, for now, HCLTech remains the only major player that has successfully translated its strategic promises into tangible share price gains.
HDFC Securities analysts offered a cautiously optimistic view in a December 2025 note. "The Indian IT services sector is positioned for a growth recovery starting in 2026, following a phase of muted performance from 2022 to 2025," they wrote. "The upcoming revival is expected to be underpinned by AI services, which are emerging as the key growth engine, as reflected in the increasing traction of AI-led deal wins."
As the industry looks toward recovery, HCLTech's performance over the last four years serves as both an exception and a potential blueprint for navigating challenging market conditions through strategic foresight and consistent execution.
