‘Linear growth is over’: HCLTech CEO C. Vijayakumar on AI, revenue decoupling, and the future of IT

India’s third-largest IT services company, HCLTech, celebrated 25 years of listing on Indian stock exchanges in January this year. In an exclusive conversation with Fortune India’s Rukmini Rao, the company’s CEO and MD, C. Vijayakumar (CVK), shared his own journey at the company, his views on where the IT industry is headed, and what FY26 holds amidst increasing global macro uncertainties. Edited interview excerpts below:

Fortune India: Having been listed now for two and a half decades, could you share your thoughts around the changes that you have seen within the company in these years?

CVK: Maybe I will talk about things which are common and what has changed. HCLTech always had an entrepreneurial DNA, and that’s what has driven us so far. If you look at the tech industry in India, of the five big businesses, three of them have been pioneered by HCLTech like remote infrastructure management, the engineering services and the software products. We have also significantly reinvented ourselves with digital services over the past 10 years, so we have been able to deliver strong growth, deliver very good total shareholder returns. I think all of this really goes to two very important DNA aspects – one is, of course, entrepreneurship and really the people focus. HCLTech always empowered people to take on responsibilities even before they were ready, and people really stepped up to make it happen. So, the people environment and entrepreneurship are two very important aspects of our DNA which have not changed, and will never change, because that is really inherent to us.

Fortune India: You have been with the company since the 90s, personally what has been the journey for you, did you ever think that you would become the CEO of the company one day?

CVK: It’s the same journey. HCLTech’s journey being an entrepreneurial culture, doing something which I’ve never done before. So a lot of such opportunities came my way and that’s really reflective of the culture in the community. I did not think I would become a CEO and I didn’t have an aspiration like that. I always thought I should do the very best of everything that was given. In fact, my first day at HCL was at the National Stock Exchange. I was part of the programme – the network team, which built the NSE. In fact, 25 years of celebration was nostalgic because I went back to National Stock Exchange again. I think the journey has been very, very exciting, and many different roles, and that’s what can kept me going, and that’s what keeps a lot of leaders in the company going.

Fortune India: Given the given the kind of dynamic geopolitical uncertainties that we’re seeing, is the quantum of the headwind any greater than what the industry perhaps had factored in for?

CVK: Definitely there are headwinds. If you really break it down to what is the business confidence to do business with global service providers like us, that continues to go up, because we are solving some very important challenges for our clients – be it technology, modernisation, managing technology, building new solutions. We are really integral to a lot of big businesses success. So to that extent, I think whether geopolitics or not, I think the underlying value that we create for our clients is holding as a good standard.

Fortune India: So then amidst these uncertainties, what do you see as two or three things that the Industry needs to watch out for in FY26?

CVK: I think it’s really about how to leverage AI to really create newer business models. It’s not about tweaking the existing business a little bit, (that definitely we need to do lot of that). But can we look at completely new areas of how we can create growth? Like India has been a big services capital agreement, but instead of services, can be good with being a research capital of the world? Can we focus the talent that we have and the human potential that is getting unlocked because of AI and other solutions and repurpose the talent to create new value to create new growth trajectory? And that’s really what we should be doing.

Fortune India: With agentic AI going mainstream, what do you see is the short-term impact and how do you see its evolution in the IT business?

CVK: I think agentic AI is a very promising solution, and we are already seeing a lot of deployment of agentic in business process, IT ops, even in software development to some extent agentic workflows help. So the fundamental shift that I see is the industry, it will change from being very linear growth in the number of people and the growth of revenue. It would shift to a little bit nonlinearity and the non-linearity will only increase as the time passes.

Fortune India: What in your sense, is going to be a differentiator between services companies with AI/ Gen AI offerings, and is industry closer to where we are looking at decoupling of the headcount and revenues?

CVK: Yes, it is already happening, and this is definitely going to happen. The 30 years of linear growth in head count and revenue is definitely not going to be there any longer. We are already seeing decoupling of revenue growth ahead and headcount growth. There is more IP, more solutions, more outcome based, more platform-based services, which are becoming more relevant than just the important people-based services.

Fortune India: If Gen AI/AI infusion is seeing greater infusion in deals, is this additional revenue for you? Do you except increased deal sizes?

CVK: I think the way to look at Gen AI and all of these new technologies, I don’t know if there is any value in calling out the specific revenue, because everything that we do needs to get infused with AI, Gen AI capabilities. So if you had, let’s say, a book of business of $13 billion, the best way to measure is what percentage of your revenue is really modernised to leverage the Gen AI capabilities. I think that would be a better measure than just saying I’m getting so much revenue from Gen AI, because it is not an isolated thing. You have data, cloud, security where more investments and more work has to be done to leverage the full potential of generative AI. I think that’s why I don’t think it makes sense to call it out and try to drive that number rather, see how are you reinventing the whole business.

Fortune India: Also, the partnership with the chipmakers and hyper scalers that we are seeing in the industry, what do you as the end game of this and the difference that it will make?

CVK: If you look at the entire AI landscape, there are four layers. One is the semiconductor layer, the AI infrastructure, the foundation models, and then AI application. So, for somebody like us HCLTech, we play in all the four layers. We work with almost all the large semiconductor companies in helping them design new chips. In AI infrastructure, given our strong pedigree infrastructure, whether it is on the hyperscale stack or on a private AI stack, we have good solutions available. On the foundational models every client’s information needs certain changes, certain tweaks in the foundation model, building Small language models which are very domain specific, creating solution that is very industry specific. So that is our presence in the foundation model layer. And then, in every application there is an opportunity to reimagine with AI. So that is another big opportunity for us to focus and that is what our digital business is doing. The underlying theme, our biggest differentiation is engineering- How do you really engineer this opportunity from semiconductor, infrastructure, foundation models to AI infused applications and our engineering DNA is the core to this.