AI is Destroying IT Jobs. So Why Are HCLTech's Promoters Buying Big?

Let's first understand what AI is doing to enterprise tech budget that gets allocated to IT companies. Here is what I gathered from the recent earnings call of a leading IT service firm...

40% of the existing opportunity that focuses on areas like app development support, or traditional infra operations and customer support, is getting actively disrupted.

Think of this as old economy of IT services that is getting automated away. In a few years, it's likely to come down to 25% of enterprise spend.

For 55% of the opportunity , AI is less of a destroyer and more of an enabler. Businesses in cloud, cybersecurity, data, analytics, and digital platforms can use AI to deliver faster and better outcomes for clients.

This part is expected to grow in double digits, gradually increasing its relative importance in enterprise spending.

The remaining 5% focuses on core infra for AI era AI factories, advanced AI engineering, custom silicon, and next-generation AI platforms. Expected to grow at 30% CAGR, it's likely to become 20% of the market in 5 years.

So while there is a part that is at risk, new pools of revenue are emerging as well with AI integration.

Do note that not all of the slowdown in the numbers and softness in guidance of traditional IT companies is on account of AI. With the ongoing West Asia situation, global clients are revisiting their tech budgets. This is a temporary, and not a structural issue in my view.

And then there is a specific event in a leading IT company that gives me hope, and that led me to ponder over emergence of value in IT companies.

I am referring to HCL Tech. To be sure, at 4%, the contribution of AI to its revenues is quite low.

However, the management in its recent concall stated they aim to grow AI native services in the 25-30% range. That shift and intent matters.

If you look at recent deal win announcements and business collaborations, they are unmistakably AI focused.

• HCL Tech expands Cornerstone partnership with MetLife Stadium, New York Jets, and New York Giants as an official AI partner
• HCL Tech collaborates with Red Hat to deliver enterprise-grade AI infrastructure solutions
• HCL Tech positioned as a leader in Everest Group's Application Transformation Services for AI Enablement PEAK Matrix^® Assessment 2025

But it's not these announcements that make it a compelling proposition.

It's where the HCL Tech's promoters are putting in their money.

You see, the promoters in HCL Tech have been consistently purchasing the stock from the open market since February 2026. Over Rs 2 bn worth of shares have been bought by the promoter group at an average price of Rs 1,309 per share, and in the price range of Rs 1,134 to Rs 1,454.

For the first time since March 2023, the promoter stake has gone up from 60.82% to 60.86% in March 2026. With buying spree in the recent months, it's likely to be higher for the June quarter.

It's often at the times of fear that a real opportunity emerges in investing.

The management actions suggest that HCL Tech could be at that point. The stock is down 32% in less than 4 months. At current price, it offers a dividend yield of 4.5%. On top of it, it's trading at a price closer to the range in which management has bought the stock from the open market.

Now, management buying alone does not guarantee anything. It does not eliminate the risks around AI disruption.

But it does raise an important possibility: what if the market is underestimating HCL Tech and its ability to adapt and participate in the next wave of enterprise technology spending?

History shows that extreme investor pessimism often lays the foundation of strong returns.

Perhaps Indian IT is entering that phase now. And perhaps the obituaries being written for companies like HCL Tech are a little premature, maybe even preposterous.

What do you think?

Warm regards,


Richa Agarwal
Editor and Research Analyst, Hidden Treasure
Quantum Information Services Private Limited (Research Analyst)