Nifty IT index rallies to 5-month high, Infosys gains 3%; here's why

Since October 2025, IT index has rallied 17 per cent, as compared to 6 per cent rise in the Nifty 50.

Information technology (IT) shares price today

 

Shares of information technology (IT) were in demand, with the Nifty IT index gaining over 1 per cent, hitting an over five month high at 39,275 on the National Stock Exchange (NSE) in Monday’s intra-day trade. The IT index now trades at its highest level since July 2, 2025.

 

At 09:19 AM; Nifty IT index, the top gainer among sectoral indices, was up 1.2 per cent, as compared to 0.5 per cent rise in the Nifty 50. 

 

Since October 2025, the IT index has rallied 17 per cent, as compared to 6 per cent rise in the Nifty 50. However, thus far in the calendar year 2025 (CY25), the index has underperformed the market by falling 9.4 per cent. In comparison, the Nifty 50 has rallied 10 per cent during the same period.

 

 

Among individual stocks, Infosys has surged 3 per cent to ₹1,693.20 on the NSE in intra-day trade. The stock bounced back 30 per cent from its 52-week low of ₹1,307 touched on April 7, 2025. Tata Consultancy Services (TCS), Coforge, Wipro, Persistent Systems, LTIMindtree, HCL Technologies and Tech Mahindra were up 1 per cent each in intra-day trade.

 

Why Infosys rallied 3 per cent on Monday?

 

Infosys said a US court has granted final approval to a proposed settlement of class action lawsuits involving its subsidiary Infosys McCamish Systems LLC and certain customers, under which McCamish will pay $17.5 million into a settlement fund. Subject to no appeal within 30 days, the settlement will become effective and fully resolve all allegations without any admission of liability.

 

In a separate exchange filing, Infosys on Saturday, December 20, said that volatility in its American Depositary Receipt (ADR) price on the NYSE on December 19, 2025 triggered two volatility trading pauses, but clarified that there were no material events warranting disclosure under SEBI regulations.

 

What’s driving IT stocks outperformance in recent past?

 

As per media reports, India’s IT hiring rebounded in 2025, rising 16 per cent year-on-year (YoY) to 1.8 million roles, driven largely by the rapid expansion of global capability centres (GCCs), which now account for 27 per cent of demand, according to Quess Corp. Hiring is increasingly focused on AI, cloud, cybersecurity and data skills, while IT services hiring remains selective. For 2026, IT hiring is expected to grow 12–15 per cent, led by GCCs.

 

Meanwhile, despite a 15 per cent earnings contribution to Nifty 50 profit after tax, the IT sector weightage at 10 per cent is at decadal low, indicating that multiple compression is largely complete, according to analysts at ICICI Securities.

 

The Trump administration has taken a U-turn with the US policy stance turned supportive, in the form of expanded exemptions for H1B visa related issuance/extensions. Post the US AI hardware frenzy, hyperscalers’ capex intensity is normalising as hardware productivity is flattening. Services demand is set to re-accelerate, the brokerage firm said.

 

Meanwhile, Accenture’s Q1FY26 performance was driven by AI-led IT services, with demand increasingly shifting from pilots to large, end-to-end transformation programs. The ongoing investments in AI talent, ecosystem partnerships and data-centre–linked capabilities (acquisitions like DLB, Soben in the high growth data center consulting market) further strengthen its medium-term growth and margin profile. Read-through for Indian IT remains neutral-to-mildly positive, indicating steady demand for large, AI-led transformation deals, while near-term outcomes will hinge on deal ramp-ups, execution strength and pricing discipline rather than a broad-based demand rebound, the brokerage firm said.

 

Analysts at ICICI Securities maintain BUY rating on TCS with a target price of ₹3,800 as the brokerage firm rolls over to FY28E; valuing it at 23x on FY28E EPS.

 

Analysts believe, TCS has a clear & scaled AI strategy among Indian IT peers, backed by scale, talent depth & strong financial discipline, positioning it well for AI-led growth with industry leading margins and returns. It expect dollar revenue to grow at a compound annual growth rate (CAGR) of 4 per cent over FY25-FY28E and have baked in EBIT margins of 24.8 per cent/ 25.3 per cent/25.5 per cent in FY26E/FY27E/FY28E vs. 24.3 per cent in FY25. INR depreciation vs US dollar (6 per cent in 6 months) partially supports margin tailwinds.  =============================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.