IT shares under pressure; Wipro, Mphasis, Coforge down by up to 5%

In the past five days, the BSE IT index has slipped nearly 10 per cent, and it has tanked 26 per cent thus far in calendar year 2025.

Shares of information technology (IT) companies are under pressure with Nifty IT index down over 2 per cent on the National Stock Exchange (NSE) in Wednesday’s intra-day trade on growth concerns.

 

The increased probability of a slowdown/recession in the US, along with uncertainty on US tariffs and its impact on the supply chain, may weigh on client decision-making in the near term and derail any hope of uptick in tech spending (particularly discretionary spending), or growth in calendar year 2025 (CY25), according to analysts.

 

Wipro, Mphasis, Coforge and Tech Mahindra are down between 3 per cent and 5 per cent. Tata Consultancy Services (TCS), HCL Technologies, Infosys, LTIMindtree and Persistent Systems are trading lower in the range of 1 per cent to 2 per cent.

 

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At 09:40 am, the Nifty IT index and the BSE IT index, the top loser among sectoral indices, were down 2.5 per cent, as compared to the 0.65 per cent decline in the Nifty 50 and BSE Sensex. In the past five days, the BSE IT index has slipped nearly 10 per cent, as against the 3 per cent fall in the benchmark index. Thus far in CY25, the IT index has tanked 26 per cent, as compared to the 5.6 per cent decline in the BSE Sensex. 

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According to analysts at Emkay Global Financial Services, IT companies are expected to operate at tighter utilisation levels and hiring uptick is likely to be gradual, depending on recovery in demand through CY25. 

 

There is no material change in the demand environment with the expectation of a muted Q4 as well, as clients continue to restrict discretionary spending. The green shoots in a few pockets of BFSI are expected to sustain, while Communication and Manufacturing (particularly Auto) remain weak. 

 

The guidance and management commentary from global companies also indicate no meaningful change in demand environment as clients continue to prioritise cost-takeout initiatives. The increased probability of slowdown/recession in the US with tariff implementation further impacting growth and discretionary spending poses a risk to recovery in spending, which would lead to revenue uptick in CY25/FY26, the brokerage firm said.

 

Meanwhile, according to reports, Global brokerage firm Jefferies, in its latest note on India's IT sector, warned that growing uncertainty and a potentially worsening business outlook, especially following the recent tariff announcement, could negatively impact IT demand through at least FY26. The brokerage has cut earnings per share (EPS) estimates for Indian IT companies by 2–14 per cent, CNBC TV18 reported.

 

Meanwhile, IT giant TCS will kickstart the fourth quarter earnings season for India Inc. on Thursday, April 10. The Tata group’s IT arm is likely to post muted revenue and profit growth in the fourth quarter of the financial year 2025 (FY25) due to seasonality factors and a slowdown in key projects, according to analysts.