TCS, HCLTech, Infosys: IT stocks gain up to 4% in trade; Nifty IT rises 3%

Information Technology (IT) stocks bounced back in Wednesday's trade, tracking rally in global tech stocks, after investors shrugged off artificial intelligence (AI)- related fears. Nifty IT index rose 3 per cent to the day’s high at 30,999.75. All 10 stocks on the index were trading positively at 11:07 AM. 

Individually, HCLTech shares were up 3.57 per cent; Infosys, Tech Mahindra, TCS, and Wipro were trading over 2 per cent higher. Similarly, LTIMindtree, Coforge, Oracle Financial Services Software, Mphasis, and Persistent Systems surged over 1 per cent.  

VK Vijayakumar, chief investment strategist, Geojit Investments, believes the negative factor of sustained selling in IT stocks may be over, and there is a possibility of some rebound in the segment. 

 

“News of Anthropic’s Claude chatbot building partnerships in software and services with IT firms indicates that there will be collaboration opportunities for Indian IT firms. If the weakness in IT stocks subsides and the segment recovers, the tailwind of foreign institutional investor (FII) buying can lift the markets,” said Vijayakumar. 

Reports suggested that Anthropic unveiled 10 new ways for business customers to use its AI plugins, reviving enthusiasm that AI would boost business profitability across certain sectors.  READ | IRFC share price hits 2-year low as government 4% stake sale via OFS begins 

In the calendar year 2026, so far, Nifty IT has fallen 19.28 per cent, compared to Nifty50’s decline of over 2 per cent. 

After the recent correction, a key concern among investors is whether Indian IT valuations could converge with global IT peers, according to JM Financial Institutional Securities. Currently, global players such as Accenture, Cognizant, and Capgemini trade at about 14x/11x/8x one-year forward earnings per share (EPS), compared with 17x for TCS and Infosys. 

The note highlighted several factors behind the valuation gap. Indian IT firms have historically benefited from strong domestic fund flows, which are largely absent for global IT services companies. Post-pandemic, domestic inflows have strengthened, widening the valuation premium. Additionally, foreign investors have broader global investment options, while domestic investors have had relatively limited large-cap growth alternatives outside IT. 

The depreciation of the rupee also supports Indian IT margins in the near term, a benefit global peers do not enjoy, although some of these gains are passed on to clients over time.  READ | PSBs, power stocks lift BSE PSU index by 11% in 1 month, near record high 

Overall, the brokerage believes valuations remain elevated in the near term and are closely linked to growth visibility. A sector re-rating is unlikely until concerns around long-term growth ease. In this environment, it remains selective, favouring companies with stronger operational visibility. 

“We remain selective and prefer: 1) Infosys among the top 6 companies; 2) Mphasis among midtiers; and 3) Sagility among BPO names,” JM Financial said.   Disclaimer: Views and outlook shared belong to the respective brokerage/analyst and are not endorsed by Business Standard. Reader discretion is advised.