Infosys, TCS to HCL Tech: AI slowdown calls send Nifty IT pack 5% higher

Indian IT stocks have been one of the biggest casualties of AI boom, having lost 21 per cent on a year-to-date basis.

IT stocks: Shares of beaten-down Indian technology services companies faced a significant uptick in Tuesday's trading session as calls to slow the pace of artificial intelligence development are seen as benefiting them. 

 

The Nifty IT pack rallied 5.06 per cent to the day's high of 30,386 as all index constituents gained. LTIMindtree emerged as the top performer following a 6.7 per cent rise. Index heavyweights such as Infosys, Tata Consultancy Services, HCL Technologies and Wipro also added 6-4 per cent.

 

Tech Mahindra rose 6 per cent while Persistent, Mphasis, Coforge and Oracle Financial Services Solutions (OFSS) were also trading with sharp gains.  

 

 

The market may also be reading the development only one way: slower progress at the AI frontier eases the obsolescence overhang for traditional services, but it can just as easily delay the AI transformation budgets the sector is currently chasing, since the same force that reduces disruption risk also slows the monetization opportunity, he concurred. 

 

"For this to become a durable re-rating, the sector needs visible recovery in client budgets, sustained margin expansion and consistent deal conversion over the next two to three quarters."

 

Among specific stocks, Bolinjkar said that within the broader IT and digital engineering universe, large-cap anchors such as TCS and Infosys offer a balanced risk-reward profile through resilient order books and meaningful AI revenue contributions. Outside the services pack, specialized ER&D plays like Tata Technologies are showing genuine traction, while in the mid-sized companies, he likes Persistent Systems for its organic execution and record deal intake, while Coforge offers strong order-book visibility. 

 

Disclaimer: Views and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.