Nifty IT index slips 4%; Infosys, TCS, Coforge tank up to 5%; here's why

Till Tuesday in October 2026, the Nifty IT index outperformed the market and rallied 12%, compared to 0.05% decline in the Nifty 50.

Information technology (IT) shares price movement

 

Shares of information technology (IT) companies were under pressure with the Nifty IT index falling 4 per cent to 30,928.10 on the National Stock Exchange (NSE) in Wednesday’s intraday deals due to profit booking after Infosys saw four downgrades following a weaker annual sales outlook. Meanwhile, the US markets ended higher on Tuesday, as optimism around artificial intelligence related stocks supported sentiments.

 

At 11:07 AM, the Nifty IT index was top loser among sectoral indices, down 3.4 per cent at 31,110.45, as compared to 0.62 per cent decline in Nifty 50.

 

Infosys, Mphasis and Coforge were down in the range of 5-6 per cent, while Tech Mahindra, Tata Consultancy Services (TCS), HCL Technologies, Persistent Systems and LTM slipped between 3-4 per cent.

 

 

Meanwhile, thus far in October 2026, the Nifty IT index outperformed the market and rallied 12 per cent till Tuesday. In comparison, Nifty 50 was down 0.05 per cent during the same period. 

 

Why did Infosys stock slip 5%?

 

Share price of Infosys slipped 5 per cent to ₹1,103.40 on the NSE in Wednesday’s intraday trade. Till Tuesday, the stock rallied 17 per cent in the month of October. It hit a 52-week low of ₹980.40 on September 29, 2026.

 

According to a Bloomberg report, Infosys was downgraded by at least four analysts in a single day after India’s second-largest software exporter cut its annual sales forecast, deepening concerns over disruption from artificial intelligence.

 

Axis Capital., Arihant Capital Markets, and IIFL Capital Services were among the brokerages that lowered their ratings on Monday, data compiled by Bloomberg showed. Three others reduced their recommendations over the weekend, pushing its consensus rating to 3.7 out of 5, the lowest since January 2024, the report stated.

 

Infosys’s management cut the FY27 revenue growth guidance to 1–2 per cent constant currency (CC) (-0.7 - 0.3 per cent YoY CC on an organic basis considering 1.7 per cent inorganic contribution) versus 1.5–3.5 per cent earlier, reflecting weaker-than-expected H1 performance and a more cautious outlook for the rest of the year, according to analysts at ICICI Securities.

 

Pricing increases remained lower-than-anticipated amid heightened competition, while softer volumes and selective discretionary spending, particularly in Retail and Hi-Tech, weighed on growth. Previously identified headwinds from offshoring and client-specific manufacturing weakness remain relevant, with assumptions broadly unchanged (expected to reduce full-year growth by 1.8–2 per cent), the brokerage firm said.

 

With revenue growth remaining subdued and competitive pricing pressure persisting, stable margins provide some earnings support but are unlikely, on their own, to drive a meaningful acceleration in earnings growth. Analysts at ICICI Securities bake in earnings before interest and tax (EBIT) margins of 20.6 per cent / 20.7 per cent in FY27E / FY28E.

 

The lower-end revenue growth guidance assumes further macro deterioration, while the upper end factors in an improvement in the environment. Management noted that H2 would face seasonal headwinds from furloughs and fewer working days, with Financial Services and EURS expected to grow above the company average. Looking ahead, management expressed confidence in FY28, supported by strong AI growth, the signed net-new mega deal and a healthy pipeline containing additional mega deals. Deal-to-revenue conversion was broadly stable, while parts of the existing portfolio had already absorbed AI productivity benefits, analysts at JM Financial Institutional Securities said in Q2 result update. 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.