Nifty IT index hits 8-month high; LTTS zooms 15% on Wednesday; here's why

Thus far in October, the Nifty IT index has rallied 16% as TCS, Tech Mahindra, Wipro, Infosys and Mphasis surged in the range of 18-23% amid Q2 earnings cheer.

Nifty IT index movement

 

Shares of information technology (IT) companies continued their upward movement on Wednesday, with the Nifty IT hitting a 8-month high at 32,314.35, gaining 2 per cent on the National Stock Exchange (NSE). The IT index has extended the rally on the back of strong September quarter (Q2FY27) earnings by major tech firms. 

 

Nifty IT index quoted at its highest level since February 20, 2026. The index has recovered 26 per cent from its 52-week low of 25,699.10 touched on July 1, 2026. Thus far in the month of October, the IT index rallied 16 per cent as a sell-off in global artificial intelligence (AI) stocks pushed investors to IT services companies. The index hit a 52-week high of 40,301.40 on February 3, 2026. According to analysts at ICICI Securities, the Indian market lagged its global counterparts due to AI-driven momentum. However, the recent sell-off in global AI-driven stocks, fuelled by concerns about Fed interest rate hikes and financing of AI investments, could serve as a supportive tailwind for the growth-oriented Indian market, potentially attracting FII’s in the near future.

 

 

Among individual stocks from the Nifty IT index, Tata Consultancy Services (TCS) surged 23 per cent so far in October. Tech Mahindra and Wipro soared 19 per cent each, while Infosys and Mphasis rallied 18 per cent each. HCL Technologies and Coforge were up 15 per cent and 12 per cent, respectively.

 

L&T Technology Services (LTTS), Tata Exlsi, Zensar Technologies and Hexaware Technologies from the non-IT index stocks rallied in the range of 19-28 per cent, thus far in the month of October. 

 

At 09:30 AM on Wednesday, the Nifty IT index was top gainer among sectoral indices, up 2 per cent, as compared to 0.86 per cent rise in the Nifty 50.

 

What’s driving the 15% surge in LTTS stock price?

 

Share price of LTTS surged 15 per cent to ₹4,143 on the NSE amid heavy volume after the company reported a net profit of ₹548.2 crore in the second quarter of financial year 2027 (Q2FY27), up 66.8 per cent year-on-year (YoY). The profit included a one-time gain of ₹165 crore. Excluding the one-time gain, profit was up 16.5 per cent.

 

Engineering, Research & Development services player reported 12.1 per cent YoY growth in revenue at ₹3,040 crore, compared to ₹2,713 crore reported in the corresponding quarter last year. Earnings before interest and tax (EBIT) margin stood at 16.3 per cent, up 60 bps quarter-on-quarter (QoQ)/220 bps YoY with margin expansion across all segments.

 

LTTS’s large deal total contract value (TCV) stood at over $200 million in Q2, with AI-related deals accounting for over 50 per cent of the total. Wins included one $75 million deal, an over $30 million deal, a $25 million deal, and six deals worth over $10 million.

 

LTTS’ growth was led by sustainability, supported by the execution of large deals won over the past six quarters, with management expecting another year of double-digit growth in the segment, ICICI Securities said in a note.

 

Mobility sustained its momentum, driven by North American automotive, aerospace, rail and Trucks & Off-Highway, although European automotive remained muted; management expects a recovery in European auto over the next 9–12 months. Tech remained weak YoY due to the scheduled ramp-down of a MedTech programme and a delayed follow-on phase, partly offset by growth in Tech Infrastructure and Semcon. Management expects Tech to remain muted in Q3, with growth recovery from Q4 onwards. 

 

Engineering Intelligence (EI) traction is improving, with annualised EI-led revenue at $120 million, supported by the EIOne platform, AI ecosystem partnerships and growing data centre engineering opportunities. With order bookings rising and the deal pipeline up over 25 per cent YoY, management expects H2FY27 to outperform H1FY27 on both sequential and YoY growth measures. It expects to sustain EBIT margins around the mid-16 per cent level despite Q3 wage hikes, whose estimated impact is 50–80 bps, and reiterated its medium-term aspiration of 13–15 per cent revenue compound annual growth rate (CAGR) with 16–17 per cent EBIT margins over the next five years, the brokerage firm said.

 

LTTS delivered a strong Q2FY27; with 2.7 per cent QoQ constant currency (CC) revenue growth and 60 bps QoQ EBIT margin expansion to 16.3 per cent, achieving its mid-16 per cent margin aspiration two quarters early. Sustainability remained the key growth driver, expanding 4.9 per cent QoQ and 13.4 per cent YoY, contributing 38 per cent revenue, driven by large-deal ramp-ups across data centres, energy transition, robotics and AI-led automation. Mobility also sustained growth, while Tech remained muted, with a large AI-led telecom engagement starting to ramp-up, analysts at Choice Institutional Equities said in the Q2 result update.

 

Large-deal TCV stood at $203 million, with >50 per cent AI-led, providing better H2 revenue visibility. The management expects stronger H2FY27 revenue growth, driven by large-deal ramp-ups, a healthy pipeline and improving regional opportunities, with H2 performance expected to surpass H1.  Sustainability remains the structural growth driver, with Mobility upside from Aerospace, Rail and North America Auto. European Auto recovery is expected next year, supported by large deals, while Tech may remain soft in Q3 following the scheduled Medtech program ramp-down, with the next phase expected in H2, Choice Institutional Equities added. Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.