IT shares in focus; Infosys, TCS, Coforge rise up to 3%; Buy, sell, hold?

However, thus far in the calendar year 2025, Nifty IT index has underperformed the market by falling 18 per cent, as against 5.5 per cent rally in Nifty 50.

Information technology (IT) companies share price today

 

Shares of information technology (IT) companies were in focus with the Nifty IT index surging over 2 per cent, outperforming the market, on the National Stock Exchange (NSE) in Wednesday’s intra-day trade on value buying.

 

Infosys, Coforge and Mphasis rallied 3 per cent each, while Tata Consultancy Services (TCS), Persistent Systems, LTIMindtree, Wipro, Tech Mahindra and Oracle Financial Services Software gained 2 per cent each.

 

At 12:37 PM; the Nifty IT index was the top gainer among sectoral indices, up 2.3 per cent, as compared to 0.3 per cent rise in the Nifty 50.

 

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However, thus far in the calendar year 2025, the Nifty IT index has underperformed the market by falling 18 per cent, as against 5.5 per cent rally in the benchmark index.  Track Stock Market LIVE Updates 

Brokerages view on IT services sector

 

In the April to June 2025 quarter (Q1FY26), the Indian IT services sector faced a mixed demand environment, with macro uncertainty, geopolitical risks, and delayed client decision-making keeping Tier-1 player’s revenue growth tepid at -3.3 per cent to 2.6 per cent quarter-on-quarter (QoQ) on constant currency terms. 

 

Four of the five large players posted QoQ revenue declines, and three saw year-on-year (YoY) drop while midcaps like Persistent and Coforge continued to outperform Tier-1 peers. On the margins front, companies managed to maintain stable margins despite weak demand, aided by efficiency gains, wage deferrals, and strong cost controls, though guidance remains cautious.

 

Deal total contract values (TCVs) stayed strong, dominated by cost optimisation and vendor consolidation deals, while discretionary spend continued to remain muted. Notably, attrition rates saw a slight QoQ uptick after several quarters of moderation, suggesting some churn in a still competitive talent market, ICICI Securities said.

 

Moderating inflation expectations, easing labour market situations (including IT Ops /Helpdesk/Software development jobs) and possibly the expectations that companies will absorb tariff-linked cost escalation and improved odds of Fed-rate cuts in September. This could possibly be a catalyst for mean reversal in IT Services’ valuation, analysts at JM Financial Institutional Securities said in the IT services sector update.

 

Besides, rising probability of Fed rate cut (likely limited effect of tariff on inflation) implies that market expects companies to absorb most of the tariff increase. That could further squeeze IT Services spend, in the brokerages' view. These pressures, in turn, are driving higher vendor consolidation opportunities – a positive – and margin pressures – a negative. That said, benign valuations and subdued expectations mean these concerns are likely priced in. Fed rate cut could therefore trigger a minor bounce back, analysts said. Stocks with valuation buffers are better placed.

 

The Indian IT sector is poised for modest growth in FY26, driven by stabilisation in key markets like the US and Europe, alongside increasing demands for AI, cloud, and digital transformation services. Despite near-term challenges such as macroeconomic uncertainty, discretionary spending delays, and geopolitical volatility, the sector is expected to benefit from a robust deal pipeline and a shift toward cost optimization and technology modernisation initiatives, according to analysts at Mirae Asset Sharekhan.