Nifty IT index rallies 6% in 2 days; Infosys soars 7% on buyback plan

The Nifty IT Index has underperformed the broader markets in the last 3 months and 6 months, owing to macro uncertainties

Shares of information technology (IT) companies are trading higher for the second straight day, with the Nifty IT index surging 3 per cent in Wednesday’s intra-day trade. In the past two trading days, the IT index has rallied 6 per cent after Infosys announced a share buyback plan.

 

At 12:01 PM, the Nifty IT index, the top gainer among sectoral indices, was up 2.6 per cent, as compared to a 0.43 per cent rise in the Nifty 50.

 

Oracle Financial Services Software, Zensar Technologies, Cigniti Technologies, Persistent Systems, Tata Exlsi, Coforge, Cyient, Intellect Design Arena and Mpahsis have rallied between 5 per cent and 10 per cent in intra-day trade today. Infosys, Tata Consultancy Services, HCL Technologies, Wipro, LTIMindtree, Tech Mahindra and L&T Technology Services (LTTS) were up in the range of 2 per cent to 4 per cent.  CATCH STOCK MARKET LIVE UPDATES 

 

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The Nifty IT Index has underperformed the broader markets in the last 3 months/6 months, owing to cautious spending behaviour by clients amid elevated macro uncertainties. However, the Nifty IT Index has partially recovered in the last month, outperforming the broader markets, driven by the hope of interest rate cuts by the US Federal Reserve and a weak rupee.

 

Among the individual stocks, Infosys was up 2 per cent in an intraday deal today, and rallied 7 per cent in the past two trading days.  

Infosys share buyback

The board of Infosys will meet on September 11 to consider a proposal for the buyback of fully paid-up equity shares. If approved, this will be the first buyback of shares since 2022, when the company had okayed a proposal of ₹9,300 crore with a minimum buyback price of ₹1,850 per share.

 

The stock price of Infosys hit a 52-week low of ₹1,307 on April 7, 2025, and had corrected 35 per cent from its 52-week high level of ₹2,006 touched on December 13, 2024. Currently, Infosys is trading 23 per cent below its 52-week high price.

 

While the quantum and pricing of buyback is unknown, it normally supports the price during the buyback period, ICICI Securities said in a note. The brokerage firm said it would also monitor growth ahead as Infosys had earlier said it expects revenue growth of 1-3 per cent in constant currency terms for FY26, revised up from 0-3 per cent earlier, with operating margin guidance at 20–22 per cent. 

IT Sector outlook

Meanwhile, the IT-Software/Software services segment saw a decline of 6.0 per cent Y-o-Y and 15.6 per cent M-o-M in hiring, indicating continued weakness in IT index momentum, with a Y-o-Y decline in 6 of the last 8 months.

 

IT players are expected to run operations tightly and maintain higher utilisation amid the soft demand environment, with hiring recovering gradually driven by a rebound in tech spending, easing macro risks, and renewed discretionary tech spending in CY25, analysts at Emkay Global Financial Services said in the IT sector report.

 

IT players continue to face headwinds from macro uncertainties, delayed decision-making, increased project scrutiny, and persistent weakness in discretionary budgets, which would weigh on revenue growth. However, deal intake is likely to be steady, supported by cost optimisation, legacy modernisation, vendor consolidation, and growing AI investments, the brokerage firm said.

 

According to analysts, the demand environment has been largely stable in the past couple of months. FY26 started on a subdued note, as clients remain cautious about tech spending, particularly discretionary spends, and growth is unlikely to see any material acceleration in Q2. Elevated macro and geopolitical uncertainty dampen the outlook for IT spending and could delay a broad-based recovery in client spending.