C Vijayakumar, the Managing Director and CEO of HCLTech, has stated that the IT services industry is experiencing significant disruption and is at a crucial turning point. He emphasizes the importance of not becoming complacent in the face of these changes. Vijayakumar believes that being proactive in adapting to new technologies, particularly emerging trends like AI, and engaging with clients about potential advancements, is critical to success. He cautions that failure to adapt may allow competitors to seize opportunities.
Vijayakumar views the current wave of AI as more profound than previous technological advancements, including the cloud and digital transitions. He compares the impact of AI to that of the internet and electricity, suggesting it represents a long-term, complex shift that the industry must navigate. This transition period will require organizations to drive change management processes both internally and with clients to fully leverage new AI capabilities.
Reflecting on HCLTech’s consistent growth, Vijayakumar notes that while the company’s margins might not be the highest in the industry, their growth rate exceeds the industry average. He argues that achieving higher growth at stable margins provides greater value than focusing solely on increasing margins. This approach allows the company to invest in pertinent areas to ensure ongoing relevance to clients.
When considering the future, Vijayakumar states that the current investment cycle for HCLTech will likely continue for the next three to four years. This period is essential for investing in necessary capabilities and solutions to stay relevant in the industry. He underscores that maintaining relevance amid continuous changes is the primary concern for leadership in the IT sector.
Addressing the total addressable market (TAM) for Indian IT companies, Vijayakumar cites Gartner’s forecast, which predicts growth between 4% and 6% for FY24. Despite some market deflation and specific challenges faced by companies, he remains optimistic about the opportunities available for growth.
Regarding market performance, Vijayakumar explains that while shifts in company portfolios and operational models may temporarily impact results, the underlying growth is showing improvement each quarter. Although predicting a return to double-digit growth for the Indian IT sector is complex, he sees substantial opportunity in adopting new technologies and collaborating with clients to demonstrate potential advancements.