Coforge, Infosys, TCS: Why are IT stocks rising in trade today? Explained

IT stocks today: The rise in IT stocks comes amid a decline in Indian Rupee against the US dollar

IT stocks today: Information Technology (IT) shares were rising in trade on Monday, June 16, 2025. The Nifty IT index hit an intraday high of 39,258, rising 2 per cent.

 

Among individual stocks, Persistent Systems share price and Mphasis share price was ruling 2.6 per cent higher each, followed by Coforge (up 2.5 per cent), Oracle Financial Services Software (up 2.4 per cent), Tech M (2 per cent), Infosys (1.6 per cent), and TCS (1.5 per cent) at 2:40 PM. In the broader universe, Dynacons Systems, Newgen Tech, KPIT Tech, Sonata Software, and Cigniti Tech rose up to 8 per cent.    Follow Stock Market Updates today LIVE 

Nifty IT index in 2025

So far in calendar year 2025, the Nifty IT index has slipped nearly 10 per cent on the NSE as against the benchmark Nifty50's growth of around 5.5 per cent.

 

 

Why are IT stocks rising in trade today?

The rise in IT stocks comes amid a decline in Indian Rupee against the US dollar. A decline in Indian Rupee is beneficial for IT stocks as it boosts related companies' revenues in dollar terms.

 

Notably, the domestic currency started 10 paise weaker against the US dollar on Monday, at 86.18 per US dollar, versus Friday's close of 86.08/$.

 

Further, thus far in June 2025, Rupee has declined around 1.7 per cent against the greenback, trading as the worst performing Asian currency.

FPI &  geopolitics

 

Foreign portfolio investors (FPIs) have been selling Indian equities and buying dollars, which has pushed up Dollar prices. FIIs/FPIs were net sellers of Indian stocks on Friday, June 13, as they dumped equities worth ₹1,263.52 crore. They also sold India stocks on June 12 and June 11, worth ₹3,831.42 crore and ₹446.3 crore, respectively. So far in June 2025, foreign investors have net sold Indian stocks worth ₹4,812.4 crore.

 

Besides, the recent surge in oil prices amid Israel-Iran tensions has pumped up Dollar demand by oil-drilling and refining companies, boosting the greenback's price.

 

Going ahead, investors will watch out for the US Federal Reserve's interest rate decision on Wednesday, June 18, where they expect the central bank to hold the rates steady amid a stable jobs market.

 

Nonfarm payrolls in the US rose 139,000 in May 2025, above the Dow Jones estimate for 125,000 and a bit below the downwardly revised 147,000 that the US economy added in April. A strength in the US economy bodes well for IT stocks, as the US is a key market for Indian IT companies.

 

IT sector: Q4 results

According to analysts at Nuvama Institutional Equities, Q4FY25 revenue growth was modest, but in-line with expectations. Quality Tier-2 companies outperformed largecap peers, with Coforge and Persistent Systems delivering double-digit year-on-year (Y-o-Y) revenue growth. Margins, too, were broadly in-line with estimates with companies expanding margins Q-o-Q and Y-o-Y with a few exceptions.

 

The highlight of the quarter, the brokerage said, was the strong deal bookings, which were solid with almost all companies reporting Y-o-Y growth (ex-TCS, Infosys, Cyient).

 

IT sector outlook in India 2025

 

Meanwhile, in the ongoing quarter (Q1FY26), IT companies reported a slowdown in deal wins in April 2025, which remained largely flat in May 2025, amid the looming tariff-related uncertainty. Analysts believe the ongoing global macroeconomic uncertainty will keep deal momentum slow in the coming months.

 

"The three-month rolling sum of deal signings, a strong one-quarter lead indicator of deal total contract value (TCV), declined further in May 2025. Europe deal signings saw some recovery from a decline in April. North America saw a sharp decline. Among verticals, BFSI led with strong deal signings, while those in Manufacturing were steady M-o-M. TCS and Infosys (4 each) led the deal wins in May 2025, followed by Wipro (2)," said those at BNP Paribas.

 

According to channel checks by Kotak Institutional Equities, the deal activity in the IT sector is tilted toward cost takeout. This is being achieved through vendor consolidation and outsourcing. Many vendor consolidation deals announced by companies are not net new for the IT industry. Companies that are aggressive, have good client engagement and can structure deals smartly are gaining wallet share. Select large and mid-tier companies are gaining share as opposed to the usual narrative of large companies consolidating out smaller ones.

 

In some cases, deals involve upfront cash payments or other incentives offered to clients to win deals. The use of balance sheet to win deals, while not common, is increasing. These deals may not be margin-dilutive, although they can be NPV-dilutive, the brokerage said.

 

"Profitability pressures are high, resulting from pricing decline in competitive deals and lack of leverage of growth. Companies are managing margins by fine-tuning costs, aligning compensation with business dynamics, and close control on all discretionary costs. Rupee depreciation will be critical to meet margin aspirations of companies, assuming companies don't aggressively cut variable compensation," KIE said in a recent report.

 

The brokerage believes FY2026 will mark another year of low single-digit growth for the incumbents, not encouraging, especially with potential deflationary GenAI risks for the sector. Risk-reward in IT services, it said, is balanced. The brokerage picks Tech Mahindra. Hexaware, Infosys, Coforge and Indegene as its key picks.